State suing former eTeck board over $30M deal with foreign company

Attorney General Anand Ramlogan told reporters Thursday the State is suing the former Board of the Evolving Tecknologies and Enterprise Development Company, eTecK, which was led by Professor Kenneth Julien.

Ramlogan said a legal opinion he received from a British Queen's Counsel has found that the former eTeck Board failed to perform the required due diligence to avoid the investment in a firm which wound up after it signed an agreement with eTeck.

He said in 2005 eTecK entered into an agreement with a Hong Kong-based firm called Bamboo Networks Ltd for an IT project. The state company's stake in the project was $30 million.

Ramlogan said the State plans to sue four members of the former eTecK board to recover the money.

He revealed that an official at the Ministry of Finance and the Permanent Secretary in the Ministry of Trade at the time advised eTecK not to enter into the agreement with Bamboo Networks without a due diligence of the company's finances, its track record or its legal status.

He said the board was satisfied that Bamboo Networks had strong financial backing through a company called Tiger Technologies Ltd in Japan.

"We have not been able to locate any fund under the name of Tiger Technologies. Whilst Tiger Management was an investment fund of some considerable significance, it was wound up in 2000. That may have ceased to exist in the year 2000," Ramlogan said.

He added that after the deal was signed Bamboo Networks changed its name to Echo Information Systems Ltd without informing eTecK. Ramlogan said that company ceased to exist in 2006.

"US$5 million, where the money gone? A shell company at the end of the day, and US$5 million, $TT30 million, suddenly disappears into a dark hole in the middle of nowhere," Ramlogan said.

"If proper due diligence exercises had been carried out, this loss could have been avoided had the Board of e TecK had been acting prudently, in my view," the AG added.

One member of the board may be exempt from the lawsuit. Ramlogan said  Prakash Saith may escape the legal action if it is determined that he absent from the board meeting that approved the deal with Bamboo Networks.