Accounting ‘expert’ testifies at LifeSport trial

AN accounting expert came under scrutiny for his report on the financial statements of the Sport Company of TT (SporTT) on the third day of the trial against its former CEO and 13 ex-board members.

The cases arises out of the failed LifeSport programme and a $34 million contract to eBeam Interact Ltd.

Dwayne Rodriguez-Seijas, an assurance partner with PriceWaterhouseCoopers, testified at the trial before Justice Ricky Rahim on September 12. Rodriguez-Seijas was deemed an expert witness and had been asked to “read and interpret” SporTT’s financial statements from September 2007-2015.

He admitted that based on his review, SporTT was not a “for-profit company.”

He also said for the entire period under consideration, it never declared a loss or made a profit.

Rodriguez-Seijas had been asked to prepare a report based on five questions relating to SporTT financial statements.

He was asked to say whether the audited statements noted SporTT suffered no loss in respect of any of its activities during the review period and if not, why not.

He was also asked if the company had any financial exposure as a result of the transactions complained of in its lawsuit against the ex-directors; whether the alleged liabilities relating to loans shown in SporTT’s financial statements were a fiction and did not meet the recognition criteria for financial liabilities; and whether two $17 million payments were reflected in the financial statements, and if not, was there any reason why they would not be reflected there.

On September 12, attorneys Anil Maharaj and Jagdeo Singh questioned him for four ex-directors.

In response to questions, Rodriguez-Seijas agreed SporTT relied on a mix of funding from projects and government grants. He said the statements reflected some loans, but a significant contribution of government funding.

“My understanding is that expenses born by the company are funded by direct financing or government grants.”

Asked if SporTT had a “free slate” to use the money it received as it wanted, Rodriguez-Seijas said there were conditions attached to government-funded projects, although from looking at the statements he could not say what the conditions would have been. He said if the government was the guarantor (of a loan facility), then it would set the conditions.

Questioned about the two $17 million payments under the LifeSport programme, he said the financial statements had little information specific to those two payments and he did not do an independent exercise to identify the source.

“I did review the financial information provided to me and the content of the various witness statements.”

He said there were notes on the borrowing for the LifeSport programme.

“I did review the source documents included in the witness statements shared with me. I do not know if the money was paid out of a loan or general subvention to the company.”

Rodriguez-Seijas also admitted he did not have access to all supporting documents or interviews with the company’s management and that his scope of work could have changed if he had got supporting source documents, but maintained, “I was asked to review financial statements and witness statements. Further information could have led me to a further conclusion.”

Rodriguez-Seijas also said since SporTT was named as the borrower of a loan, the company would have been legally obligated to repay that loan.

“Although I have not seen the loan documents…I only know what was noted in the financial statements.”

He was also questioned about two loans from First Citizens Bank which were repaid in 2014.

SporTT’s lawsuit refers to loans between eBeam and SporTT which, it has alleged, never had board approval.

It alleged that eBeam did not provide the services for the programme, which aimed to transition unemployed young men to responsible adulthood by providing sport training, occupational skills training and job placement.

It also claimed that ex-CEO John Mollenthiel and former board members should be held liable for entering into the contract.

The trial continues on September 13, when some of the ex-directors are expected to give evidence.

Representing SporTT are Colin Kangaloo, SC, John Lee and Stephanie Moe.

The ex-directors are represented by Fyard Hosein, SC, Rishi Dass, SC, Anthony Vieira, Neil Bisnath, Karina Singh, Roger Kawalsingh, Nicole de Verteuil-Milne, Kamini Persaud-Maraj, Richard Jagai, Sasha Sukram and Dharmendra Punwasee.

About the case:

SporTT’s claim of negligence and breach of fiduciary duty is against its former CEO John Mollenthiel and ex-directors Sebastian Paddington, Chlea Lamsee-Ebanks, Reynold Bala, Morris Blanc, Nisa Dass, Anly Gopeesingh, Sabrenah Khayyam, Cheemattee Martin, Matthew Quamina, Annan Ramnansingh, Kent Samlal, Harnarine Seeram Singh and Milton Siboo.

The post Accounting ‘expert’ testifies at LifeSport trial appeared first on Trinidad and Tobago Newsday.