The Tribune

• Payment provider defends contract awards

• Blasts attacks as ‘reckless, laden with ulterior motives’

• Says talented Bahamians will question ‘coming home’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian digital payments provider yesterday hit back at mounting attacks on its business by asserting that all contracts were won “above board”, it’s chairman adding: “I have absolutely nothing to hide”.

Nicholas Rees branded the politically-led assault on Kanoo as “inaccurate, reckless and laden with ulterior motives”, and warned they threatened to undermine not just the company but national “world first” initiatives such as the launch of the Central Bank’s Sand Dollar digital currency (see other article on HERE). 

Confirming that Kanoo has also won the bid to provide the “multi-signature digital wallets” to all government departments and agencies, so that they can use the Sand Dollar for payment transactions, Mr Rees said the past two weeks have made him question whether “it was really worth” coming home “if this is how the country is going to treat me and my co-founders”.

Suggesting this highlights why talented Bahamians choose to remain abroad and not come home, he added that Kanoo was another victim of the so-called ‘black crab’ syndrome where “too often in this country we tear down people who are making inroads”.

Kanoo was embroiled in a political firestorm after it became caught-up in the Progressive Liberal Party’s (PLP) attack on The Bahamas’ health travel visa system. The digital provider facilitates the visa payments on the Ministry of Tourism’s behalf, and questions surrounding the fees it was earning and why the money was not being deposited in the Government’s consolidated fund quickly surfaced.

The allegations then expanded to political favouritism and nepotism amid claims that Dr Nigel Lewis, the FNM’s national campaign co-ordinator for the upcoming general election, was a Kanoo director and that the company had won multiple other government contracts.

Mr Rees, though, produced Kanoo’s annual returns filed with the Registrar General’s Department to show that Dr Lewis is not a director. He holds less than a 1 percent equity stake in the company, the Kanoo chairman added, which was given as a reward for putting himself and his fellow Bahamian entrepreneurs in touch with their Atlanta-based technology partner some five years ago.

Describing the company as “politically agnostic”, with Dr Lewis’ political connections “irrelevant” to Kanoo and its business, Mr Rees said it seemed like he and his fellow investors have “made a lot of enemies since we launched”.

Besides Sand Dollar and the health travel visa, Kanoo has also won the contracts to facilitate the electronic processing of child support and other court-ordered payments, plus food assistance payments on behalf of the Ministry of Social Services and Urban Development.

However, further controversy arose when it was revealed that the Bahamas Agriculture and Marine Science Institute (BAMSI) had engaged Kanoo to facilitate the payment of tuition and registration fees by Family Island-based students. Mr Rees’ father, Olvin, is BAMSI’s deputy chair, and sources subsequently informed this newspaper he is close to the Prime Minister.

However, Mr Rees slammed social media claims of favouritism and nepotism as wholly incorrect as he disclosed that Kanoo has hired attorneys “to look into the false assertions and innuendos made” with a view to taking potential legal action against its accusers. “How many other friends does the Prime Minister have?” he asked.

He revealed that BAMSI reached out to Kanoo and other digital payment providers during the COVID-19 pandemic, and “there was no contract awarded. They signed up to our merchant services platform in the same manner as all of our merchants. It’s [BAMSI] one of our smallest clients”.

While declining to provide figures, Mr Rees said Kanoo was earning a two-figure monthly sum from the BAMSI arrangement. BAMSI declined to comment when contacted by Tribune Business, but sources confirmed that it had sought “three to four quotes” from rival digital payments providers as well as Kanoo before ultimately opting to select the latter.

As for the Supreme Court payments contract, the Kanoo chair said this was awarded only after “an extremely intensive Request for Proposal” where it had to partner with another company to outperform all Bahamian and international digital payment rivals.

And Social Services had initiated a “pilot programme” where Kanoo and its competitors were invited to participate so that their technical capabilities could be “tested and proven”. Mr Rees said “transparent and accountable reporting systems” were also required, and both his company and others were selected to help digitise welfare payments.

Tribune Business has obtained independent verification that many of the contracts awarded to Kanoo were obtained through competitive bidding and tendering processes.  Rivals, speaking on condition of anonymity, confirmed that they, too, participated in the Supreme Court RFP as well as the Social Services vetting. The latter saw Kanoo awarded the food assistance payments, while Cash N’ Go and Omni now handle rental and uniform assistance.

“Every single one has been open, every single one has been above board,” Mr Rees told Tribune Business of Kanoo’s contracts. “I have nothing to hide. I have absolutely nothing to hide. We won hands down, solely related to our technology and our team. We’re a true Bahamian success story as it relates to young entrepreneurship and innovating in technology for The Bahamas. 

“I make no apologies for that. It’s what I do every day. I help Bahamians to build their business and expand their business. We’ve made a lot of enemies apparently since we launched. We’re young, we’re new and and we have disruptive technology. We’ve been getting numerous attacks, not just in public, but attempts attacking our e-mail servers and core infrastructure which started late last year.”

Mr Rees said Kanoo was formed in 2016 when he was put in touch with US entrepreneur Nathan Horne and his business partner, Kenneth Lipscomb, who own Atlanta-based technology provider, Visikard. Mr Horne had been in The Bahamas “consulting under the PLP administration”, and his technology solutions attracted attention.

Dr Lewis, a long-standing business partner of his father for more than 22 years, put Mr Horne and Mr Rees together. The latter described their meeting as “like lightning”, with Mr Horne acting as a mentor to him. He added that, “as a thank you for making such a fruitful introduction”, Dr Lewis was granted a 1 percent equity stake in Kanoo but “he’s not a director and has never been involved in the day-to-day operations”.

The Visikard duo have a minority equity stake in Kanoo as its technology partners, with the company majority Bahamian-owned through Mr Rees and fellow co-founders Keith Davies, Herbert Cash, Shamark Davis and Khalil and Kimani Braithwaite.

As for the Ministry of Tourism’s health visa contract, Mr Rees said Kanoo was approached five days before the platform’s launch by Think Simple, its developer, which was then part of the Organisation for Responsible Governance’s (ORG) Living with COVID Coalition, to provide an online payment processing tool.

“Something like this would normally have taken four to six weeks, but we devoted the resources and got it done in five days,” he added. “We’re pretty proud of that. That is a testament to the team and the technology.”

Responding to the attacks on Kanoo, Mr Rees blasted: “We’re really discouraged as young professionals and find it disingenuous that we’re being targeted in this manner because we provide a needed service to the Government.

“We’re providing technology for digital transformation and are politically agnostic..... I make no apologies for having a father whose long-standing business partner is the FNM’s national campaign co-ordinator. That’s irrelevant to Kanoo. I couldn’t care less about this scenario.

“Too often in this country we tear people down who are making inroads, and this is a core reason as to why young people are not coming home. Over the past two weeks I’ve been thinking: ‘Was it really worth it coming home if this is how the country is going to treat me and the other co-founders with all the sacrifices that we’ve been making?’” he added.

“I have been so depressed over the past two weeks. We’ve engaged lawyers and they’re looking into the false assertions and innuendos made. They’ve been significantly damaging, not only to the company’s reputation but my personal reputation.

“I’m a two-time Olympian. I embrace competition. I feel competition enhances value and benefits countries. It’s important we raise the level of competition above politics and deliver the best solution we can. We feel we should not be penalised and attacked for using our talent and resources to develop this company for Bahamians. Everything about this company is to lift up The Bahamas.”

Not all competitors were convinced, though. Speaking on condition of anonymity, one said: “Something doesn’t look right about the awarding of these contracts.” Another added: “Not all of them were put out to bid, and it appears that Kanoo always had the inside track.

“The excuse was used that ‘the Government has been working with them’, which is not so because others have been working with government to fix lots of issues but we’re not given anything in return or invited to bid when the ‘meaty’ projects are on the line. The real issue here is that they have good friends in high places.”