Published On: Mon, Jun 27th, 2022

How Heyliger delivered a near monopoly to Tropical Shipping (Part 1)

PHILIPSBURG — Accusations leveled against the business practices of Tropical Shipping under the whistleblower provision of the American Securities and Exchange Commission Act of 1934 strongly suggest the existence of a corrupt scheme to establish a stevedoring and transshipment monopoly on St. Maarten. Together with Tropical Shipping, former minister and parliamentarian Theo Heyliger is at the heart of this scandal.

The parties mentioned in the complaint to the SEC include companies like St. Maarten Port Services (SMPS), St. Maarten Terminal Services (STS), Tropical Shipping & Construction Company Limited and the Harbor Group of Companies. The complaint suggests that Heyliger functioned as the spider in an intricate web of companies and questionable business deals.

SMPS was established in 1984 by the late Edward Buncamper. In May 2010 the Gioia Group, acquired SMPS. This is a real estate development company that includes several businesses, led by the Gioia brothers. The other principal stevedoring and shipping company in St. Maarten is STS, incorporated on October 13, 1983. This company is owned and operated by the family of Theo Heyliger. From April 28, 1993 until October 19, 2010, Heyliger was the managing director of STS.

Intermar, a sister company of STS, was incorporated on June 17, 1985. Heyliger was also the director of this company from 1993 until September 30, 2010.

As a minister, and before that as a commissioner for the island territory of St. Maarten, Heyliger had the port in his portfolio as its shareholder representative. In that position, he appointed Mark Mingo as the harbor’s chief executive officer.

Back in 1983, Tropical Shipping entered into an agreement with SMPS about transshipment in St. Maarten. In 2008, the company started negotiations about moving its transshipment hub to the island. That move came at a price. According to the complaint Nichirei Corporation, a company related to Heyliger’s STS, received a building permit for the construction of a warehouse and office building that was to become the future home of Tropical Shipping.

Allegedly, Tropical Shipping paid rental fees in excess of $120,000 to STS, money that was used to finance the construction project.

On December 24, 2008, Tropical Shipping incorporated as a St. Maarten entity. Hardly a month later it informed SMPS that it intended to terminate their 25-year long business relationship within 60 days. While a court ruling obliged Tropical to continue the relationship until April 1, 2010, SMPS continued with legal actions.

At the same time the Gioia Group entered into negotiations with the harbor about the development of the Dutch Village, a mixed-use retail and restaurant concept at the port facility.

All this did not sit well with Heyliger, or so it appears from the complaint. In August 2010, Heyliger informed Gioia Group that Dutch Village and the Tropical Shipping deal had “to work hand in hand.” In other words: if the Gioia Group wanted to build the Dutch village, it would have to settle the litigation against Tropical Shipping.

On September 20, 2010, Zebec, one of Gioia’s businesses, signed a memorandum of understanding with the harbor about the Dutch Village development. This agreement contained no restrictions about the tenant mix or the retail space, but that was about to change. Another Gioia business, EFB Properties, transferred land to the harbor in exchange for a promise to secure approval for the project from the cruise companies. When the harbor missed a deadline for those approvals, Heyliger promised to smooth the way on the condition that Gioia Group settle the Tropical Shipping litigation. “In other words,” the complaint states, “Heyliger held the Dutch Village project hostage until the Gioia Group settled the dispute with Heyliger’s benefactor.”

That worked: On May 8, 2011, SMPS settled its dispute with Tropical Shipping. This allowed Tropical to move its business to STS. SMPS retaliated by lowering its prices, forcing Tropical to do the same. Heyliger messaged the Gioia Group about this, saying that the price war impacted his family business.

This is where things went further south for Gioia Group: the port introduced changes to the agreement about the Dutch Village project by restricting retail space to 10,000 square feet. In August 2011, Heyliger upped the pressure informing Gioia Group that getting approval from Royal Caribbean Cruise Lines was going to be a problem. “In other words, Heyliger used the cruise line approval as a means to extract more concessions for STS,” the complaint states.

With the Dutch Village project now on hold, STS-subsidiary Intermar offered to buy SMPS. Gioia Group was not interested. Heyliger allegedly forced the deal by claiming that the project required that STS becomes the owner of SMPS. In the process, he demanded a greatly reduced price – equal to the appraisal of the SMPS building in Pointe Blanche.

Immediately after STS acquired SMPS, the harbor raised the rates for vessel and stevedoring operations. “Heyliger’s control over the harbor rate schedule was a pre-condition for moving Tropical Shipping’s transshipment hub to St. Maarten,” the complaint states.

The complaint arrives at a brutal though clear conclusion: “Tropical Shipping acted corruptly in dealing with Heyliger and the port by having Heyliger misuse his position as harbor commissioner to exert pressure on SMPS to prematurely end its relationship with Tropical Shipping.”

By paying excessive rent and by helping with the construction of the warehouse and office building at Heyliger’s affiliate business, Tropical Shipping bribed St. Maarten’s vice prime minister. “Tropical Shipping was able to unilaterally terminate its long-term relationship with STS and given a near transshipment monopoly. Heyliger misused his government position by playing the Dutch Village-card. Tropical Shipment made its payments for one purpose only: to secure itself a near monopoly on St. Maarten.”


Related articles:
Part 2 – Theo Heyliger even deeper involved in Port activities
Mark Mingo: “I have done nothing wrong”
Follow the money
Zebec’s attorney reveals Theo Heyliger’s “criminal conspiracy”
Letter Zebec lawyer to ODP et al
Letter Zebec lawyer to SMH Cruise
Civil inquiry: more “rotten apples” at the harbor