Justice Carol Gobin who is hearing the winding-up application for the EFCL. FILE PHOTO –
THERE are at least 15 contractors on record as objecting to the winding-up of the Education Facilities Company Ltd (EFCL).
The 15 formally indicated their objections on Monday at the first virtual hearing of the EFCL’s petition to the court for permission to go ahead with the winding-up since the company says it has no income, has ceased to carry on the business of project management, is insolvent and cannot meet current debts from cash or other assets.
It has been advanced that it would be in the public’s interest for EFCL to be wound up as it is unable to repay its debts – estimated at $889,561,246 – to contractors for work done.
It also has a wage bill of $2.2 million for its 41 employees.
The EFCL’s winding-up petition was filed in the High Court in February.
The company has also admitted to having only $4,508 in an RBC Royal Bank account and $46,000 worth of assets in the form of office furniture and fixtures.
“Its continued operation should not be permitted to continue,” the EFCL’s acting CEO Gayatri Badri Maharaj said in the petition.
At Monday’s hearing, some 24 contractors put in appearances either through their attorneys or by themselves.
While 15 objected, the remainder said they were not opposing the winding-up petition.
Among those companies objecting to the petition are Prudecon, Quopcon, Yorke Structures; Benchmark Construction, Fitness Centre. Companies such as Motilal Ramhit and Sons and Super Industrial Services (SIS) are not opposing the petition.
Justice Carol Gobin, who is hearing the petition, has given the 15 objectors, as well as anyone else who wants to do the same, permission to file affidavits by May 31.
The rules of court give objectors seven days in which to put forward their case, but the judge extended the time after attorneys for at least five contracting firms said they needed more time to peruse the EFCL’s 300-plus page petition.
Attorney Devesh Maharaj said the reason his clients – two contractors – are opposing it was that they have not been able to get their money. His clients have separate matters before the court where stays have been applied for by EFCL’s attorneys. Maharaj has objected to any stay being granted to prevent his clients’ debt-enforcement matters from progressing.
Also among those objecting to the seven days was attorney Prakash Ramadhar, who said it was not merely an issue of the winding-up of the EFCL.
“This is a state company. It is not a regular company,” he said, as he referred to the complexity of the law. “I cannot understand the frenzy to wind up. The implications (of it) are severe.”
However, Senior Counsel Deborah Peake said the issues being raised went outside the Companies Act.
“They are objecting to the grounds (set out in the petition), so they must be clear on what they are objecting to… We are only dealing with the filing of evidence (at this stage), and not law.”
The judge also gave directions for EFCL to respond to the objections by June 15 and adjourned the matter to another virtual hearing on July 4, when she will give further directions for filing submissions.
Attorney for SIS Dinesh Rambally referred to a pre-action protocol letter the company sent to the Attorney General in March, threatening legal action against the State for the $1.2 million the company is owed and for which the company received judgment and tried to levy on the EFCL in 2019.
The EFCL’s petition outlined the company’s debt woes, saying between February 21, 2019, and October 22, 2021, EFCL received 33 demands for payment from contractors. These totalled $46,737,205.09. EFCL has not paid. These sums are in addition to the $800 million owed to contractors.
The company also has 79 unsatisfied judgments/awards, some of which date back to December 2016. The total amount owed on these judgments/awards, up to February 25, was $321,376,009.75.
It also said some $112 million ordered to be paid to contractors was not reflected in invoices in EFCL’s possession.
It is also currently defending 30 claims in which $119 million is being demanded.