UDeCOTT racks up $7.7B debt, made $50M payout just before May 24 election

A report on the Sunday Guardian states that the paper has seen documents showing that the State-owned UDeCOTT has debt amounting to $7.7 billion, which would have to be met by the new government.

The paper says the debt continued to build even after Calder Hart resigned as executive chairman. "The billion-dollar debt reflects the company’s loan portfolio for private sector financing at the end of February of this year," the report states.

However it quotes Minister of Planning Mary King as saying she has no knowledge of the huge debt. “You are telling me stuff I have never heard of...I have never seen any accounts dated February 28, I will appreciate if you can forward your documents to me,” she told the paper.

The Guardian says it has seen official UDeCOTT documents showing that the company secured loans that were guaranteed by the government. It says UDeCOTT borrowed from several financial institutions between 2008 and 2009 to fund several Government projects and for the payment of contractors.

It says, "in some instances the former government failed to upkeep the agreement with the lending facilities accruing millions of dollars in interest. In fact, financial documents showed that on June 4, 2008 UDeCOTT took a government-guaranteed loan from First Citizens Bank (FCB) for the sum of $320 million.

The loan, as stated, was listed to cover various projects an agreed to be repaid in December 2009 by Government".

The paper said UDeCOTT failed to meet the repayment deadline and had to pay $30 million interest to FCB.

The paper says its investigations further revealed that audited statements for 2007 have not yet been signed off "as there have been concerns raised by a reputable accounting firm, while the 2008/2009 accounts are now being hurriedly prepared to be audited".

In addition, the paper says prior to the May 24 general election, the Manning Government made "hefty payouts" to big contractors, including one cheque for $5 million on the morning of the election.

It quotes an unnamed source as saying the payouts were made possible "via a $100 million loan granted by First Citizens Bank ten days before election. Payments amounting to $50.6 million was paid out to six large contractors weeks before the election—with the largest payment to one contractor being $18.6 million".

The paper says while all this was happening, UDeCOTT was telling small contractors it didn't have the money to pay them.

Read the full report in the SUNDAY GUARDIAN