Richard Lord

Eigh­teen crim­i­nal charges could be brought against for­mer Hin­du Cred­it Union pres­i­dent Har­ry Harnar­ine.That's the find­ing of the Com­mis­sion of En­quiry in­to the col­lapse of the CL Fi­nan­cial Group of Com­pa­nies and the Hin­du Cred­it Union Co-op­er­a­tive So­ci­ety Ltd.Prime Min­is­ter Kam­la Per­sad-Bisses­sar pre­sent­ed the al­most-400-page re­port in Par­lia­ment yes­ter­day. In a state­ment, she said the re­port was to be sent to the Di­rec­tor of Pub­lic Pros­e­cu­tions (DPP) and the act­ing Com­mis­sion­er of Po­lice for in­ves­ti­ga­tion.

The re­port was com­piled by Sir An­tho­ny Cole­man, who was the on­ly com­mis­sion­er. The en­quiry be­gan in No­vem­ber 2010 and the re­port was pre­sent­ed to Pres­i­dent An­tho­ny Car­mona ear­li­er this week. Per­sad-Bisses­sar said the re­port dealt with the HCU, and a sec­ond re­port re­lat­ing to the CL Group of Com­pa­nies was be­ing pre­pared.The PM said the re­port stat­ed: "The con­duct of Mr Har­ry Harnar­ine was such that the DPP should take im­me­di­ate steps to test the sus­tain­abil­i­ty of crim­i­nal pro­ceed­ings against him."

She al­so said she had in­struct­ed At­tor­ney Gen­er­al Anand Ram­lo­gan to pur­sue civ­il ac­tion for the re­cov­ery of monies and dam­ages, in ac­cor­dance with the rec­om­men­da­tions.And she al­so said Fi­nance and the Econ­o­my Min­is­ter Lar­ry Howai would ex­am­ine the rel­e­vant sec­tion of the re­port "which deals with at­tempts to re­form the reg­u­la­tion of cred­it unions so this can in­form the draft­ing of a new law for the prop­er and ef­fec­tive mon­i­tor­ing and su­per­vi­sion of cred­it unions to pre­vent a re­cur­rence of this de­bil­i­tat­ing fi­as­co."

Per­sad-Bisses­sar apol­o­gised to cit­i­zens for the pain and suf­fer­ing, dis­tress and in­con­ve­nience they had been forced to un­der­go as a re­sult of the short­com­ings and fail­ures on the part of so many, in­clud­ing the reg­u­la­to­ry mech­a­nisms of the State. She said she want­ed to as­sure that "those re­spon­si­ble for their hurt and pain will feel the full brunt and weight of the law. The chips will fall where they must. No stone shall re­main un­turned in this quest for so­cial jus­tice on be­half of the peo­ple."

Among the of­fences for which Harnar­ine should be in­ves­ti­gat­ed

�2 Con­spir­ing dur­ing the pe­ri­od from Jan­u­ary 1, 2002 to Ju­ly 23, 2008 with the prin­ci­pal of­fi­cers and mem­bers of the BOD and/or the man­agers of HCU, name­ly Gayn­d­lal Ram­nath, Yad­wanath Lalchan, Jameel Ali and Ravin­dra Bachan ("the co-con­spir­a­tors") to de­fraud mem­bers of HCU and their de­pos­i­tors in HCU by agree­ing dis­hon­est­ly to put at risk the val­ue and re­cov­er­abil­i­ty of the mem­bers' in­vest­ments and/or de­posits by mem­bers and oth­ers as ev­i­denced by some or all of the fol­low­ing con­duct more ful­ly de­scribed in Sec­tion F of the re­port.

�2 The com­mer­cial re­la­tion­ship be­tween Harnar­ine and the co-con­spir­a­tors, which was dom­i­nat­ed by Harnar­ine, sup­port­ed par­tic­u­lar­ly by Ram­nath.

�2 Reck­less­ly pur­su­ing an im­prov­i­dent in­vest­ment pol­i­cy by caus­ing HCU to pur­chase tan­gi­ble as­sets at an over-val­ue, with­out the pri­or ap­proval of the BOD and with­out the pri­or val­u­a­tion of such prop­er­ty by in­de­pen­dent val­uers and with­out ob­tain­ing pri­or ad­e­quate ad­vice on ti­tle, for ex­am­ple caus­ing HCU USA to pur­chase in 2003-4 the Mi­ra­mar Prop­er­ty in Flori­da, the prop­er­ty of Seep­er­sad Harnar­ine in Pem­broke Pines, Flori­da, and the prop­er­ty at Macaya Trace, Flori­da.

�2 Reck­less­ly caus­ing HCU to form and/or ac­quire sub­sidiaries and to man­age them with­out pri­or per­mis­sion from the CCD and with­out ex­er­cis­ing pri­or due dili­gence and with­out any or suf­fi­cient busi­ness plan, which sub­sidiaries were in­ca­pable of pro­duc­ing suf­fi­cient rev­enue to fi­nance their day-to-day op­er­a­tions and which could on­ly sur­vive with loans from HCU and reck­less­ly fail­ing to pro­cure ad­e­quate mon­i­tor­ing of the de­te­ri­o­rat­ing fi­nan­cial con­di­tion of those sub­sidiaries.

�2 Know­ing­ly or reck­less­ly caus­ing HCU to so­lic­it de­posits at a time (2005-2008) when it could not meet its im­me­di­ate li­a­bil­i­ties.

�2 Caus­ing HCU's reck­less and ex­ces­sive ex­pen­di­ture on items which were not in the in­ter­ests of HCU or its mem­bers, specif­i­cal­ly pay­ments for per­son­al pur­pos­es to Harnar­ine (amount­ing, ac­cord­ing to the liq­uida­tor, to $5,994,953) and to HCU's di­rec­tors and man­agers and to re­lat­ed par­ties.

�2 Know­ing­ly or reck­less­ly caus­ing HCU to use mon­ey de­rived from mem­bers' de­posits or oth­er pay­ments to sup­port, by means of loans, the op­er­at­ing ex­pens­es of loss-mak­ing sub­sidiaries.

�2Know­ing­ly or reck­less­ly caus­ing the mis­ap­pro­pri­a­tion of HCU funds de­posit­ed by mem­bers and oth­ers for the per­son­al ben­e­fit of oth­er di­rec­tors and man­agers, in par­tic­u­lar the pur­chase of prop­er­ty lat­er trans­ferred to di­rec­tors and re­lat­ed per­sons.

�2 Reck­less­ly caus­ing HCU to di­min­ish liq­uid­i­ty with­out re­gard to the risk of the re­pay­ment re­quire­ments of de­pos­i­tors and in par­tic­u­lar to so­lic­it funds from mem­bers in or­der to pay mon­eys due from HCU to oth­er mem­bers.

�2 Know­ing­ly or reck­less­ly caus­ing HCU to make loans to non­mem­bers, such as sub­sidiaries in breach of the CS Act 1971 and in breach of HCU's Bye-Laws.

�2 Know­ing­ly or reck­less­ly caus­ing HCU to make loans to mem­bers of the BOD and se­nior man­age­ment in ex­ces­sive amounts and with­out se­cu­ri­ty or the com­ple­tion of the nor­mal­ly re­quired ap­pli­ca­tion forms and even when the bor­row­er was al­ready in de­fault on pre­vi­ous loans in re­spect of re­pay­ment of the prin­ci­pal due or the pay­ment of ac­crued in­ter­est.

�2Know­ing­ly or reck­less­ly caus­ing HCU to fail to ac­quire and main­tain suf­fi­cient liq­uid as­sets to en­able it to meet its li­a­bil­i­ties to its mem­bers.

�2 Know­ing­ly or reck­less­ly caus­ing HCU and its sub­sidiaries and the sub­sidiaries of HCU Fi­nan­cial to trade while in­sol­vent.

�2 Know­ing­ly caus­ing HCU to fail to com­ply with its statu­to­ry du­ties to pro­vide ac­cu­rate fi­nan­cial state­ments to the CCD.

�2 Know­ing­ly or reck­less­ly caus­ing in­ac­cu­rate and mis­lead­ing fi­nan­cial state­ments to be is­sued to mem­bers of HCU.

�2 Know­ing­ly or reck­less­ly in­duc­ing mem­bers of HCU to re­tain de­posits in HCU by is­su­ing to them mis­lead­ing let­ters of com­fort and as­sur­ances that HCU was sol­vent.

�2 Know­ing­ly or reck­less­ly caus­ing HCU to ac­quire illiq­uid as­sets with­out re­gard to the risk of the re­pay­ment re­quire­ments of HCU mem­bers and oth­er de­pos­i­tors.

�2Know­ing­ly or reck­less­ly caus­ing HCU to make im­pru­dent loans to sub­sidiaries which were un­law­ful and ir­recov­er­able, those loans hav­ing been made with­out the pri­or con­sent of the CCD to non-mem­bers of the cred­it union.

�2Reck­less­ly caus­ing HCU to di­min­ish its liq­uid­i­ty with­out re­gard to the risk of the re­pay­ment re­quire­ments of de­pos­i­tors by fail­ing to make any or any suf­fi­cient pro­vi­sion for de­faults on un­se­cured loans.

�2 Con­trary to Sec­tion 34 of the Lar­ce­ny Act, caus­ing HCU to ob­tain de­posits from mem­bers and oth­ers by false­ly rep­re­sent­ing that HCU was sol­vent by mis­rep­re­sent­ing in man­age­ment fi­nan­cial state­ments the val­ue of as­sets and oth­er ac­count­ing in­for­ma­tion.

�2 Con­trary to Sec­tion 34(2)(b), caus­ing HCU to cause or in­duce by false pre­tences oth­er per­sons to ac­cept a valu­able se­cu­ri­ty by know­ing­ly or reck­less­ly draw­ing or caus­ing to be drawn cheques in set­tle­ment of de­pos­i­tors' with­draw­al claims.

�2 Con­trary to Sec­tion 3, caus­ing HCU to trans­fer prop­er­ty (ve­hi­cle PBN 2827) to Harnar­ine's wife.

�2Con­trary to Sec­tion 3, caus­ing HCU to make pay­ments to Harnar­ine in 2003, 2004 and 2005 in re­sponse to his claims for for­eign trav­el ex­pens­es not es­tab­lished by vouch­ers or oth­er con­tem­po­rary or oth­er ev­i­dence to have been in­curred for the pur­pos­es of HCU.

�2 There were al­so facts which would have jus­ti­fied fur­ther in­ves­ti­ga­tion by the DPP in­to the pos­si­bil­i­ty of the com­mis­sion of nu­mer­ous sum­ma­ry of­fences had it not been for the fact that such of­fences are now all time-barred.

�2 Caus­ing HCU to be in breach of Reg­u­la­tion 14 by its fail­ure to ob­tain pri­or con­sent of the CCD for in­creas­es in its max­i­mum li­a­bil­i­ty.

�2 Caus­ing HCU to ob­struct in­spec­tion by the CCD as ex­plained in the ev­i­dence of Mr Ma­haraj.

�2 Caus­ing HCU to fail to pro­vide time­ly fi­nan­cial state­ments to the CCD.

�2 Caus­ing HCU to make in­vest­ments in and from sub­sidiary com­pa­nies with­out the pri­or ap­proval of the CCD.

�2Caus­ing HCU to make loans to non-mem­bers with­out the pri­or ap­proval of the CCD.

�2 Caus­ing HCU to make ul­tra-vires pay­ments of fees and stipends to di­rec­tors.