(L-R) Then Governor Richard Tauwhare, Michael Misick and Cem Kinay at the Dellis Cay groundbreaking
By Caribbean News Now contributor
PROVIDENCIALES, TCI -- On Friday, Andrew Mitchell QC concluded the second week of his opening statement on behalf of the prosecution in the criminal trial of former Turks and Caicos Islands (TCI) premier Michael Misick and others by outlining how Crown land valued at $75 million was sold for $3 million
First, however, Mitchell continued his summary of a proposed development of Juniper Hole (also known as Juniper Point), an expanse of land in western Middle Caicos containing areas of outstanding natural beauty and historic interest.
“The principle beneficiary of the activities in Juniper Hole is [Michael Misick],” he said on Thursday.
What is clear, Mitchell said, is that the then Executive Council (ExCo) was told that Crown land was to be sold with 50 percent up front, with 50 percent in three years. In reality, what happened behind the scenes is that a scheme was set up with Belongers brought in, apparently unknowingly.
It is clear, Mitchell suggested, that Thomas Chalmers Misick was working with his brother Michael Misick, former speaker of the house Clayton Greene, and former ministers McAllister Hanchell and Floyd Hall to disguise the true nature of the intended transaction from public scrutiny.
Mitchell revealed on Thursday that, on 5 February 2008, 20 shares (ten percent of the total) in the development company Juniper Hole Developments Limited [JHDL] were issued to Irish Eyes Limited, a nominee company of British Caribbean Bank [BCB].
Two days later, on 7 February 2008, BCB lent $12,500,000 to JHDL at an interest rate of 10.9 percent (or the local prime lending rate from time to time). A commitment fee of $1 million was added to the loan and BCB was entitled to 10 percent of the development's profits.
“The land was the security, and the unsuspecting Belongers were the guarantors,” Mitchell said.
The loan could only be used for the acquisition and payment of fees associated with the acquisition of freehold title to the property as follows:
a. Land Acquisition Cost $7.5 million,
b. Stamp duty and registration fees on land acquisition $375,000,
c. Stamp duty and registration fees on loan $50,200,
d. Commitment fee $1 million (to BCB),
e. Bank legal fees $50,000,
f. Funding term deposit, and
g. Working capital $526,000.
On 11 February 2008, $500,000 was paid to Chalmers & Co as a drawn down against the loan, out of which payments were made to Lofton Misick, another of Michael Misick’s brothers; to Michael and Lisa Raye Misick; and Mildred Rivas, the mother of two of Michael Misick’s children.
“That is all we can say about Juniper Hole. There are curiosities around the land, and curiosities around Belongers being named when they didn't know it. There is the price that the land was bought for, which ends up being a windfall for the bank – they loaned $12.5 million and then repossessed the land. What is clear is that [Thomas Chalmers Misick] received $500,000 from the bank, and we can identify payments going out for the benefit of [Michael Misick],” Mitchell said.
He then turned to proposed developments at Dellis Cay and Joe Grants Cay by Cem Kinay, a Turkish national.
According to Mitchell, Kinay appears to have first met Michael Misick on 5 May 2005 and was granted Belongership on 15 November 2006.
He noted that, on 21 July 2005, then deputy attorney general (now attorney general) Rhondalee Braithwaite-Knowles received a call from Michael Misick instructing her to agree to an amended anti-bribery clause in the proposed development agreement.
Discussion took place, and it was agreed that the clause would read: “the payment of fees to a professionally retained person in relation to the agreement should not amount to an event giving rise to a right of termination on the part of the [TCI government] the right to terminate the agreement, pursuant to [the] clause”.
“Why [Michael Misick] should wish to become involved in seeking to exclude or reduce the impact of a bribery clause is difficult to understand, unless he recognised the potential downside of proper application of a robust clause in this regard. [Michael Misick] is an attorney, he is likely to have appreciated the nuances of such a clause,” Mitchell pointed out.
The development agreement was signed on 31 July 2005 and approved by ExCo on 4 August 2005. At the time the agreement was signed, no due diligence reports on Kinay had been received by the TCI government. There was also to be a dredging agreement, which meant that more land would be created, and Kinay’s company would receive dredged material from the North Caicos channel for free.
On 26 October 2006, Cabinet granted, in principle, permission for a resort to be built on Joe Grants Cay. The developer was to be Arturo Malave or a designated company. At a 16 May 2007 Cabinet meeting, a change in developer from Malave was approved.
The purchase price of the land was to be $5 million, but there was some disagreement over how the land was to be valued.
On 30 May 2007 there was a Cabinet Meeting at which then Governor Tauwhare was not present. It was agreed at the meeting that 200 acres of Crown Land on Joe Grants Cay would be offered for sale at a price of $2 million. There doesn't appear to have been a valuation, Mitchell noted.
Tauwhare was not aware of this offer until the transfer of land was drawn to his attention. When the governor raised concerns about the proposed sale of Joe Grants Cay, Michael Misick accused him of blocking the development of the TCI at a time when the government was desperate for money.
On 10 June 2008, Shaaban Hoza, the government valuer, was asked to carry out an urgent valuation of 300 acres of development land on Joe Grants Cay. He valued this land at $75 million. Hoza was told that this figure was too high and was asked to carry out further a valuation, which he did on 13 June 2008. Hoza re-valued the land at $26 million, for agricultural purposes rather than tourism-related, as before.
On 13 June 2008, McAllister Hanchell, on behalf of the TCI government, sought a private valuation from BCQS – an international firm that started off life in the Cayman Islands as Bould Chartered Quantity Surveyors. A valuation of $3.2 million was provided for 200 acres of Joe Grants Cay.
Faced with three options, to accept BCQS at $3.2 million, Hoza at $75 million, or refer the matter to London, the Cabinet, noting that government revenues were very low and therefore there was an urgent need to sell land to raise money, opted to sell for $3.2 million – this being close to the price that Kinay was prepared to pay.
Mitchell then moved to financial transactions between politicians and developers.
He explained that $1.5 million from Kinay that had been moved through the TCI and Switzerland ended up in Chalmer's & Co account.
“The Crown's case is the progression of the funds would appear to suggest that this is an attempt to layer the funds: move them through accounts to disguise the original source,” Mitchell said.
Of this money, on 6 July 2006, $125,000 was paid into Michael and Lisa Ray Misick’s HSBC account in Los Angeles.
“The Crown summarise thus: Kinay is sending money from his account in the TCI to Switzerland, and almost by return it is sent back to the TCI to Chalmers & Co, who then, upon receipt, send part of the money for the benefit of [Michael Misick],” Mitchell said.
Specifically, $102,895 was paid to Mildred Rivas, Michael Misick’s former partner; $100,000 was paid to J&T Banka for the credit of the American Express Centurion Card in the name of Michael Misick.
There was a further deposit to the Chalmers & Co account of $300,000, out of which $200,000 was paid to the private account of Michael Misick and $20,000 to Rivas.
The full text of the tenth day’s opening statement on behalf of the Crown may be found here: http://tci-sit.org/wp-content/uploads/2016/01/SIPT-29th-Jan-2016.pdf