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Fired Sportt board kept in the dark

$2m wire transfer to eBeam...
Published: 
Sunday, August 10, 2014

A new report, compiled by the disbanded board of directors at Sport Company of T&T, has revealed startling allegations against its former chief executive officer and his role in the signing of the “loose” $34 million contract with eBeam Interact Ltd. Just one day before being unceremoniously dismissed, the board of directors found evidence that then CEO, John Mollenthiel authorised a $2 million wire transfer to eBeam Interact Ltd. 

The money was transferred from Sportt to eBeam on December 6, 2012, the very day the contract was formalised. The money was sent without board knowledge or approval. None of the attached documents explain whether this money was a portion of the $34 million eventually paid to eBeam or an additional, unaccounted $2 million payment. The Sportt board has retained the services of Senior Counsel Russel Martineau on the matter.

This new information was compiled into a lengthy report by the board on August 6, 2014, and submitted to Finance Minister Larry Howai. It was copied to Prime Minister Kamla Persad-Bissessar, Attorney General Anand Ramlogan, newly appointed Sport Minister Rupert Griffith, Director of Public Prosecutions Roger Gaspard and acting Commissioner of Police Stephen Williams. On Thursday, Cabinet took the decision to remove that board of directors.

The Sportt document shows Mollenthiel campaigning and defending eBeam against red flags raised by the company secretary and Permanent Secretary Ashwin Creed. The board states that by August 2013, Mollenthiel reported to them that “initial assessment tests had been conducted.” “As such, the board believed that the works in the eBeam Interact Ltd contract had begun,” the report stated.

The Sportt report also criticised the Central Audit Unit (CAU) report and sought to clarify some of the details made public after Persad-Bissessar tabled its findings in Parliament on July 24, 2014. The board denied the CAU findings that eBeam was “selected mainly because of the company’s president/CEO Mr Adolphus Daniell’s track record as an educator.” The board instead pointed its finger at Mollenthiel.

“The former CEO (Mr John Mollenthiel) informed the board that the Ministry of Sport (MOS) did the appropriate due diligence in the selection of the eBeam Interact Ltd,” the report states. “Mr Mollenthiel stated that Ashwin Creed advised that the only reason that Sportt was being asked to enter into this contract was that the contract sum was in excess of the financial limit of the PS of the MOS,” the board states.

The board stated that it was only by December 2013, one year after the contract with eBeam was already signed and the second payment became due, that the board saw the contract. “The board expressed concerns that Mr Mollenthiel signed such a contract,” the report said. The board said it sought legal advice and “refused to support payment of the second instalment for approximately four months after Mr Mollenthiel made his initial recommendation for payment.”

This was done, the board said, even though by then Creed had approved the payment of the second $17 million. That second payment, according to the documents, was paid only after the legal direction to do so.

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Board in the dark...Mollenthiel now claims ‘set-up’
Sportt’s board of directors said Mollenthiel’s admissions to the CAU investigators revealed fresh information to them. The board says that Mollenthiel made four admissions to the CAU that they learned for the first time during their joint interview with CAU auditors:
• That he had signed the contract “mainly to avoid delays in the implementation of the numeracy and literacy programme.”
• That he was told that the contract should be “loose.”
• That he regretted signing the contract.
• That he felt he had been “set up.”

“Had the board been so aware, all efforts would have been made to ascertain the person(s) who instructed Mr Mollenthiel that the contract should be ‘loose’ and to ascertain who had set up Mr Mollenthiel and address those matters,” the board noted. However, in several e-mail exchanges between Mollenthiel and the board members of Sportt, Mollenthiel praised eBeam’s ability to deliver. In one e-mail dated December 5, 2012, Mollenthiel justified the sole selection of eBeam for the hefty project.

“Holistically, I am not aware of any other programme like it available locally,” he said in that e-mail to the Sportt chairman. The series of e-mails also reveals that the $17 million payment made to eBeam on December 6, and expected again by September 2013, was not part of the original deal. The original agreement sought that $34 million as part of a two-year contract, with a first-year payment of $18.5 million and a second-year payment of $15.5 million.

The documents do not show when that agreement was altered. The CAU’s interim report, cited by the Sportt board, noted that it found the contract with eBeam to be more favourable to the company than to Sportt. The Sunday Guardian attempted to contact Mollenthiel on two mobile numbers listed on the documents. Mollenthiel did not respond to several calls and texts from the Sunday Guardian.