MovieTowne distances self from allegations of duty-free fraud

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…claims ignorance of breached IDA

Chairman of MovieTowne, Derek Chin

MovieTowne investor, Derek Chin, has distanced his company from suggestions that it had anything to do with what equipment China Harbour Engineering (CHEC) used on its construction; after concerns were raised that the construction company breached a previous Investment Development Agreement (IDA).

In 2014, China Harbour Engineering (CHEC) had signed a US$30 agreement with MovieTowne to construct the entertainment facilities, restaurants and commercial space. At the time, CHEC was already contracted to do the Cheddi Jagan International Airport (CJIA) and extension project.

During a recent tour of his facilities, however, Chin, had spoken out about challenges facing the Turkeyen construction project, while highlighting that interactions with Government had dwindled.

In light of Chin’s complaints about processing delays and red tape, the Guyana Revenue Authority (GRA) came out in a statement distancing itself from the perception that it is behind the delay in MovieTowne’s construction.

According to the tax entity, it has in fact assisted the company in clearing its goods.

“The GRA also advised the principal that equipment currently being utilised in the construction of MovieTowne, was in breach of the terms of another Investment Development Agreement (IDA), since, based on the said IDA, equipment earmarked for use on another major project was being utilised in the construction of MovieTowne,” GRA Commissioner General Godfrey Statia had said.

Statia claimed that instead of terminating the IDA on the basis of the breach, the GRA agreed to allow both projects to continue. He claimed that there was an understanding that the available remedies under the said IDA would be enforced after the projects are completed.

File photo: An aerial view of MovieTowne Guyana which is still under construction

He went on to explain that MovieTowne submitted an IDA application to the Guyana Officer for Investment (Go-Invest). The company, Statia related, was advised in September 2017 by the GRA that only concessions in line with those granted to competitors in the industry would be allowed.

This supports Chin’s subsequent statements to this publication in which he denied receiving preferential treatment. But while the GRA did not say who brought over the equipment or what other project it was supposed to be used for under the other IDA, Giftland’s Chief Executive Officer (CEO) Roy Beepat linked CHEC to the matter in a letter to the media.

Beepat, whose company is considered MovieTowne’s main competitor, questioned whether CHEC used its duty-free concessions acquired for the airport project to also do work on MovieTowne… and whether MovieTowne was complicit in this arrangement.

“GRA has stated that there was a breach of the China Harbour contract and they have misused their concessions and duty-free equipment to supply these to MovieTowne,” Beepat had said in his letter to the media.

“Isn’t this fraud on the Government, if concessions were granted for the Timehri airport then how can the materials and equipment end up at MovieTowne? It is in the public’s interest to have a detailed list of these and what fines are being levied for this transgression. Was MovieTowne aware of this arrangement? A thorough investigation by the CID [Criminal Investigations Department] is required here to determine intent” he questioned further.

Additionally, Beepat noted, “Mr Statia mentions that “equipment“ was used by China Harbour on the MovieTowne project, he does not mention materials, having paid hefty duties and VAT on all my imports not related to the Cinema component, I would be grateful for the proof that cement, steel, escalators, elevators, glass, shop fronts, doors, washroom , electrical, plumbing and all other items which we paid duty for including our generation sets were equally duty-paid by China Harbour and MovieTowne.

“As it appears that China Harbour worked at that time period  with inbuilt duty-free concessions, it would be reasonable to surmise that this would have applied to these other items as well, having shown that they had already done this with “equipment for MovieTowne.”

However, in an interview with this media group MovieTowne investor Chin, described the allegations against his project as unfounded and “pulling at straws”. For one, Chin explained that all steel and aluminium used in the project was certified by the Trinidad-based Caribbean Industrial Research Institute (CARIRI).

Scaffolding, he noted, was brought from Trinidad. Trinidadian sub-contractors, he related, were used for plumbing, electrical work and Information Technology. Chin stressed that other things like glass, escalators, elevators and generators belonged to MovieTowne. According to Chin, he could not be responsible for what equipment a contractor owns and uses on his work site.

“We don’t know their inventory of equipment! They are contracted to do the job. We don’t tell them how to do it or what to use,” Chin said. “CHEC are the contractors and are responsible for equipment.  We brought in scaffolding from Trinidad.  Tools I wouldn’t know.  Cranes were owned by CHEC.”

“Our only concession was duty-free on cinema and kitchen equipment. Nothing on steel, cement, bricks, tiles, paint, etc. We also built the side road and bridge at no cost to the taxpayers of Guyana. It’s a public road. Rest assured we do not get involved in underhand business. You can bank on that. There are still people around who do good things and take pride in their businesses. Our brand and name is very important to us. Anyone can tell you about the MT story and our impeccable reputation and record from Trinidad”  Chin explained.

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