Ex-director tells of zero interest loans

Former Hindu Credit Union (HCU) director Gainlal Ramnath received four interest-free loans while he served as secretary to the board, on which he still owes payments. This was revealed while Ramnath was being cross-examined at the Clico/HCU Commission of Inquiry yesterday. He is one of only two directors who are to appear before the commission. Ramnath applied for one of the loans, $175,000, for a medical emergency related to his daughter, he said. This loan, at zero per cent interest, eventually went to Chandradeo Harnarine, the brother of former HCU president, Harry Harnarine. Chandradeo had collapsed because of illness, Ramnath explained to attorney, Deborah Peake, who is representing liquidator, Dave Rampersad in the inquiry. Ramnath, she said, borrowed a total of $800,000 and, to date, owes the HCU $191,668. At the same time, his total shares in the credit union do not exceed $59,525.

 

Peake asked Ramnath if he has been delinquent in paying his monthly instalments of $4,470 and he replied yes. Asked how the HCU could take members’ money and lend it to directors at zero per cent interest, Ramnath said directors qualified for interest-free loans for medical purposes only. He agreed that any loan granted that was not for medical purposes would have been contrary to the HCU’s policy. One of the loans he applied for was for the construction of a house on land owned by the HCU, Peake disclosed. In 2002, the HCU, with members’ money, bought nine lots of land at Macaya Park and in 2004, Ramnath borrowed $225,000 from the credit union and bought three lots. Ramnath said the HCU bought the land for the express purpose of resale to executive managers and board members. Further, Ramnath received a stipend as a board director of $7,000 monthly, which Peake said resembled a salary. She said he received this “salary” from which no PAYE, NIS or other taxes were deducted. Quoting from an audit, she said over $1 million was paid in fees to directors and senior staff with no tax deductions.