- NEWSDAY.CO.TT - A la Une - 21/Jul 03:22

Cepep CEO: I was pressured to renew contracts

CEPEP Company Ltd CEO Keith Eddy has sworn that he refused to approve a three-year extension of hundreds of contractor agreements without Cabinet approval because of concerns about a possible $1.4 billion government spending commitment. Eddy, who has led the state-owned company since 2016, said in an affidavit filed in the High Court that he faced “intense pressure” from former Minister of Rural Development and Local Government Faris Al-Rawi and other officials to extend the contracts and add new contractors. He claimed no written proof of Cabinet approval or additional funding was ever provided. Eddy’s affidavit, submitted in defence of Cepep in an ongoing case brought by Eastman Enterprises Ltd, details WhatsApp exchanges with former Cepep chairman Joel Edwards and a ministry official. Eddy said he was urged to renew all contracts and hire 12 additional contractors, assuring him that “we will babysit to ensure that the paperwork you require runs smoothly.” Eddy said he refused without prior Cabinet authorisation. Eddy further said that the Ministry of Finance had previously raised red flags about Cepep’s spending, accusing the company of “unjustified and uncontrolled expenditure” and uncovering “major discrepancies.” He said he would refer the matter to the police Anti-Corruption Bureau, the Director of Public Prosecutions and the Integrity Commission for investigation. Eddy maintains that any claim he authorised contract extensions without Cabinet approval is “false and fabricated,” and that he acted only on assurances from Edwards that Cabinet had approved the measure. “This is the first time I have ever had to deal with a situation where the company was extending all of its contracts with contractors en masse in such a wholesale manner regardless of whether the contract had expired or had substantial periods of time left to run until they expired. “I was, therefore, of the clear opinion that prior cabinet approval was necessary for such a massive transaction more so because the contracts were not simply going to be extended for one year but rather up to a maximum of three years. “I was particularly concerned to ensure that Cabinet approval was granted because of an earlier incident which had occurred in May 2024. My contemporaneous WhatsApp messages with Mr Edwards shows that Cepep was being accused of increasing expenditure without consent, engaging in unjustified and uncontrolled expenditure and the central audit committee in the Ministry of Finance had allegedly discovered and reported on major discrepancies.” Eddy’s affidavit detailed the WhatsApp exchange between himself and Edwards. He said he told the chairman he was not “willing to extend all contracts for a further three years without prior cabinet approval.” Eddy said he told the chairman that “under no circumstances would I be willing to proceed to renew all contracts in the absence of cabinet approval and that I would not be intimidated, pressured or bullied into doing so. “I indicated this to him because I felt as if I was being pressured into extending the contracts without cabinet approval despite my expressed view that this was necessary in the circumstances. “I was of this opinion because Cepep is wholly owned by the government, and it would obviously be unethical (if not illegal) for Cepep to commit the government to expenditure in the vicinity of TT$1.4 billion without any form of prior consultation and approval. “It would obviously be unreasonable for such a transaction to proceed without the government having any knowledge of it because of the implications for the national budget. “It would commit the government to a significant expenditure without any form of prior consultation, approval or knowledge and to my mind that could not be right. “I was prepared to stand my ground on this issue because I am the accounting head for Cepep and as indicated above, serious allegations had been levelled against Cepep by the Ministry of Finance about increasing expenditure without consent and unjustified and uncontrolled expenditure with reported major discrepancies.” Eddy said in the lead up to the general election, he “came under intense pressure from the line Minister Al Rawi and others to add new contractors and to assist certain companies. “When I demanded documentary evidence and proof that approval had been granted by the Ministry of Finance or the cabinet, none was forthcoming. I was, therefore, alerted to the highly suspicious nature of these requests because I did not wish to be anyone’s fall guy.” He claimed in April, he was told to add new contractors into the Cepep programme. “I was extremely concerned about his aggressive and demanding nature because I was being asked to add these contractors without any corresponding increase in funding, far less approval from the Ministry of Finance. “I simply could not in all good conscience add new contractors without the requisite approval from the Ministry of Finance and any form of supplemental funding.” Eddy said in conversations with the chairman, he was told, and believed, cabinet approval was granted. He also denied there was an error with the Board note and also said he was never told to correct the one prepared. He also said, “I would never have allowed such a note which falsely claimed and fraudulently misrepresented that cabinet had granted such approval to go forward and be circulated to Board members and allow them to vote on same. “That would be a most serious dereliction of duty on my part because it is tantamount to misleading and deceiving the Board and perpetrating a fraud on Cepep in circumstances where I was aware that as the executive head, I was under a duty to act in the best interest of the company.” Eddy’s affidavit was filed on July 18, the same day Eastman’s lawsuit came up for hearing before Justice Margaret Mohammed. Mohammed is expected to rule on two injunction applications but has deferred it until she rules on a preliminary issue raised by Cepep on the proper forum to deal with contact disputes. She will rule on August 8. Cepep, represented by Anand Ramlogan, SC, argues that Clause 17 of the contract requires disputes to go through a tiered resolution process before court action. Cepep has claimed that its former board wrongfully extended 336 contracts worth about $400 million until 2029, allegedly based on a false representation that Cabinet had approved the move. Cepep is investigating what it calls “political fraud” and has asked the court to pause proceedings while potential criminal misconduct is probed. In support of Eastman’s claim, Edwards denied Cabinet approval was required and said a board note implying it had been corrected. Edwards said he never told the board that Cabinet approval was secured and ordered the note corrected upon realising the error. He said no copy of the revised note could be located in his records. Eastman claims Cepep wrongfully terminated its contracts, leaving thousands of workers unpaid. The line minister, Barry Padarath, is seeking legal advice as the matter unfolds. On July 8, a lawsuit filed by a company reportedly removed from the Companies Registry was quickly withdrawn. A fresh claim was filed by Eastman Enterprises Ltd, represented by Larry Lalla, SC, St Clair O’Neil and Kareem Marcelle. On June 27, an estimated 360 contractors and 10,400 workers were fired. Their termination letters were signed by Eddy. The post Cepep CEO: I was pressured to renew contracts appeared first on Trinidad and Tobago Newsday.