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Published On: Thu, Jun 14th, 2018

Court postpones decision about civil inquiry at port companies

Court Room St. Maarten

PHILIPSBURG – The Common Court of Justice postponed on Thursday morning a decision about a civil inquiry at the Harbor Holding Company and its subsidiaries until December 13, but it granted the public prosecutor its request to suspend Mark Mingo immediately as statutory director for the duration of the legal procedures.

The public prosecutor’s office filed a request to order a civil inquiry and to take provisionary measures against the port companies on September 1 of last year. Due to Hurricane Irma, that request got lost and the prosecutor’s office submitted its request again on February 19 of this year.

On July 20, 2017, the prosecutor’s office expressed its concerns about the policy and the course of events within the port companies to its management and its board of supervisory directors. The port reacted with letters dated August 1, 2017 – but the answers were not to the prosecutor’s office satisfaction.

It therefore petitioned the court with a request for permission to investigate the policy and the course of events at the port companies from January 1, 2009 forward and to appoint three investigators.

Furthermore, the prosecutor’s office asked for the suspension of port director Mingo, the appointment of a new director, suspension of all current supervisory directors and the appointment of replacements that meet all statutory quantitative and qualitative requirements.

Other demands in the petition are the appointment of a legal and compliance officer and an ombudsman and the establishment of a non-retaliation policy.

The prosecutor’s office based its request on non-compliance with the Corporate Governance Code, suspected irregularities with the tendering of the causeway project, the so-called Octavio-loan for the purchase of a crane, the $10 million settlement with developer Zebec and the fraud with forged invoices.

The court notes in its decision that the request to conduct a civil inquiry has already had an impact. Director Mingo was put on non-active duty after a suspension of two months, Ton van Kooten and Richard van der Mark were appointed as statutory directors and the supervisory board now consists of the required five members. The port also established a whistleblower-policy.

Given these developments, the prosecutor’s office withdrew demands for provisionary measures related to issues that have now been solved to its satisfaction.

The suspension of port director Mingo is another matter. The prosecutor’s office sticks to its position that he must be suspended and the port has indicated that it has no objections, while Mingo had not expressed objections either.

The court ruled that the port suspended Mingo but that it did not take away his authority to represent the company. “So far, the port seems to have hardly taken any measures nor did it do any research in particular into the matter of the invoices. The court is of the opinion that this requires the suspension of Mingo as a statutory director. His suspension is necessary and the reasons for it are important.”

While the port companies acknowledge that there are reasons to question the policy that was followed under Mingo’s tenure and that an inquiry could contribute to transparency, they still  are of the opinion that such an inquiry should not take place. The port cites concerns about the high costs of the inquiry and about the time the investigators will take away from the statutory directors. They ought to focus fully on recovery after last year’s hurricanes.

The port asked the court – in case it rules in favor of the inquiry-request – to postpone the start with at least half a year. The port also indicated that it is prepared to initiate a baseline-study. Other measures include preparedness to amend the articles of incorporation and to leave the appointment of the compliance officer and the ombudsman in the hands of the supervisory board of directors.

The port furthermore showed willingness to provide the prosecutor’s office with additional information about the causeway project.

Lastly, the port indicated that it is prepared to fire Mingo when the Court in First Instance declares him guilty in the criminal investigation against him.

Considering all this, the court decided to put a decision about the inquiry-request and about the requested appointment of a compliance officer and an ombudsman on hold to give the port companies the opportunity to continue with measures designed to improve the situation and measures to undo or limit the consequences of previously incorrect actions.

The court set the date for further handling of the prosecutor’s office’s request at December 13. Two-and-a-half weeks before that date, on November 27, parties have to inform the court about the measures that have been taken in the meantime and what their position then is about the usefulness and necessity of the civil inquiry.

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