Former Hindu Credit Union (HCU) president Harry Harnarine and three of his close relatives have lost their bid to have an injunction, barring them control of a hardware in Arima, discharged.
Delivering a decision on Wednesday, High Court Judge Robin Mohammed refused to discharge the injunction, which was granted to businessmen Elvis Lum Young and Navindra Ramnanan against Harnarine, his daughter Krystal Ramjattan and his two sons Hari and Amrit, last year.
“Taking a wide lens approach to the instant matter, I am of the opinion that the least irremediable prejudice to one party or the other would be to continue to deny the defendants any control of the hardware business until the trial of the claims against them,” Justice Mohammed said.
In the lawsuit, Lum Young and Ramnanan are claiming that they were invited to invest in a new hardware with a similar name to the Harnarines’ Authentic Building General Hardware, in order to benefit from its existing reputation.
They invested a little over $2.5 million and incorporated a business by the name Authentic Building General Hardware 2021 Limited, to which the new hardware was allegedly supposed to be transferred eventually.
They claim that money they invested was allegedly used to pay some of the debts of the Harnarines’ hardware and to pay for the lease on the new location in Arima.
In the lawsuit, the investors are alleging that Harnarine and his family charged all the expenditure from their hardware to the new venture and siphoned all of its revenue.
They also claimed that they commingled funds and stocks to avoid tracing and took all the premium clients.
They are claiming that the actions were in breach of their fiduciary duties as directors of the new venture and constituted fraud and the misappropriation of corporate funds.
They contend that Harnarine was not officially included in the legal documents but served as a consultant due to issues with the collapse of the HCU and bankruptcy proceedings against him.
Through the substantive lawsuit, Lum Young and Ramnanan are seeking declarations that the new business was held in trust for them and the company they established.
Under the terms of the interim injunction, granted last year, the Harnarines were barred from accessing the hardware’s location at O’Meara Road in Arima and from interfering with its assets until the determination of Lum Young and Ramnanan’s substantive injunction application.
After the injunction was granted, Lum Young and Ramnanan applied for further interim orders against the Harnarines, who they claimed continued to harass them by allegedly attempting to stymie audits being conducted.
The business partners also sought permission to reopen the hardware, as they claimed that they could not continue to pay rent and expenses without any revenue.
The Harnarines filed their own application seeking to discharge the injunction, in which they denied all the allegations against them and accused the business partners of seeking to deny them their share of the business through the lawsuit.
In deciding on the applications, Justice Mohammed ruled that the Harnarines failed to adduce evidence to support their claims that there would be no dissipation of assets if the injunction was lifted.
“The claimants have brought significant documentary evidence to support their claim for an injunction. The defendants have not. Instead, the Defendants have made a series of assertions without any support for same,” Justice Mohammed said.
Justice Mohammed did allow the business partners to reopen the hardware but ordered them to keep documentary records of all financial transactions and inventory.
“The claimants shall not be allowed to sell the substantial assets that are in dispute but would be entitled to sell that which constitutes ordinary sales from the hardware business,” he said, as he ordered them to provide monthly reports to the Harnarines.
The business partners were represented by Justin Phelps and Gary Hannays.