Rhon­da Krys­tal Ram­bal­ly

There didn't ap­pear to be any great deal of con­cern by the Hin­du Cred­it Union (HCU) board over "a prob­lem brew­ing" in 2004, four years be­fore its col­lapse. Ed­win Glas­gow, QC, lead coun­sel to the Com­mis­sion of In­quiry in­to HCU, yes­ter­day asked for­mer sec­re­tary to the board Gain­lal Ram­nath why the board was asked to ap­prove $26.3 mil­lion to sub­sidiaries to­wards the end of 2004.

Glas­gow said: "Yet again we see, I think, all the sub­sidiaries get­ting very sub­stan­tial loans, which in my arith­metic, if right, to­tal an­oth­er $26.3 mil­lion. "The ques­tion I have to ask you is, what on earth were the di­rec­tors and you do­ing, go­ing along with lend­ing yet more mon­ey to these sub­sidiaries, at a time when you must have known, if the state­ments are right, that the mem­bers were ask­ing for their mon­ey back and some of them weren't be­ing able to get it?"

Ram­nath's re­sponse to Glas­gow's ques­tion about lend­ing mon­ey to the sub­sidiaries was that it was a re­quest to fi­nance a bud­get an­tic­i­pat­ing ex­pen­di­ture. Ram­nath said he felt it was an oblig­a­tion to fi­nance the sub­sidiaries and there was noth­ing he could do. The loan was for fi­nanc­ing a gym and a swim­ming pool at one of the HCU's fa­cil­i­ties, ac­cord­ing to Glas­gow.

How­ev­er, Ram­nath said when the prop­er­ty was bought, the pool was al­ready there. He said the prop­er­ty was sup­posed to be an ed­u­ca­tion­al fa­cil­i­ty. Glas­gow ques­tioned whether all the di­rec­tors, in­clud­ing Ram­nath, were aware that the HCU "was un­der pres­sure from the mem­bers to get their mon­ey back by Oc­to­ber 2004."

Ram­nath said in 2004, there were call-backs from mem­bers, and ad­mit­ted there was "a fi­nan­cial run." Glas­gow said at that time cheques were be­ing bounced and that close to $600,000 of mem­bers' mon­ey was spent to buy a house be­long­ing to Har­ry Harnar­ine's broth­er. Ram­nath said: "I would not com­ment on what I don't know."

An­oth­er is­sue raised was that of un­law­ful mort­gages, which Glas­gow said the au­di­tor point­ed out in a 24-page let­ter. "It was one of the very many things that the au­di­tor brought to your at­ten­tion in his fa­mous 24-page let­ter of com­plaint," he said. He said mort­gages was one of the "ex­pressed" things. He said the com­pa­ny had ap­proved over $4.5 mil­lion in ze­ro-per cent loans.

Glas­gow said sev­er­al mort­gage loans were grant­ed with­out the Com­mis­sion­er of Co-op­er­a­tives' con­sent. When asked if he knew the com­pa­ny was grant­i­ng mort­gages, Ram­nath said he was aware and that they were re­ferred to the com­mis­sion­er for ap­proval. Glas­gow said he did not be­lieve the au­di­tor's let­ter of com­plaint was tak­en se­ri­ous­ly at all.