Local News

“Resident status’’ promised to investors raises legal question

St. George’s, February 23, 2012 – Prime Minister Tillman Thomas, who dismissed Environment Minister Joseph Gilbert last month on the grounds that the “action was taken in the public interest and in order to preserve the integrity of the government of Grenada and to maintain the highest standards of Cabinet decision-making’’, may be confronting another situation that requires action on his part.

Documents circulating in St. George’s show a senior Ministry of Finance official assuring the chairman of a Chinese financial company of Grenada government acceptance of a proposal to grant “resident status’’ to investors in return for investing up to US$50 million in Grenada.

However, Grenada has no law providing for payment for “resident status.’’ Journalists investigating the matter also uncovered no evidence that it was ever discussed and agreed to by cabinet.

The documents include letters written by Christopher DeRiggs, Director of Private Sector Development in the Ministry of Finance, to the Chairman of the board of Touchstone Capital Partners Enterprise of China.

Last May, a 19-member Touchstone delegation visited Grenada and met with top government and private sector officials.

The visitors signed a number of memoranda of understandings and promised to plough US$200 million into the local economy.

Among the potential investors were said to be presidents and chairs of various companies whose finances are managed by Touchstone Capital Partners.

Touchstone, in following up with DeRiggs after the Grenada visit, requested a response on whether certain investors “will be granted the right to seek resident status in Grenada on condition that each successfully passes Grenada’s due diligence requirements and channels through Touchstone Capital’s pre-approved projects, an investment in Grenada of a minimum amount of $300,000 for 5 years.’’ Touchstone said it was “proposing up to $50m USD of investments under this program.’’

DeRiggs answered in a letter dated September 12, 2011. The letter was copied to Finance Minister Nazim Burke; Permanent Secretary in the Ministry of Finance, Timothy Antoine; and Grenada’s Trade Counsellor at its Embassy in Beijing, Richard Nixon.

“In light of the foregoing,’’ DeRiggs said in the letter, “the Government of Grenada hereby accepts your proposal as captured in this letter, subject, of course to the clear understanding that the applicants shall pay all applicable fees associated with their application.’’

DeRiggs, the point man in liaising with Touchstone on the fee-paying “resident status’’ arrangement he claims government had accepted, was also a lead player in another enterprise that was not discussed in cabinet and which ended prematurely in 2010.

He was part of a local team that had met representatives of SeWang One World, with whom a memorandum of understanding (MOU) was signed proposing investment of more than US$2 billion in Grenada.

Shortly after the signing of the MOU became public, news broke that Chinese authorities had arrested three people associated with SeWang One World on suspicion of fraud.

“These arrests have raised concerns about the wisdom of government’s decision to engage this company in the first place and the manner in which they were engaged,’’ Finance Minister Burke told reporters at a September 2010 news conference in St. George’s.

Burke expressed “regret’’ that Prime Minister Thomas had signed the MOU in May 2010 with Yeja Park, who was described as President and CEO of SeWang One World Company Ltd.

“I do not believe,’’ he said, “that prime ministers … should sign on to an MOU of that nature with a private company. It’s not necessary to bring the prime minister into that scenario.’’

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