The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government dropped Ernst & Young as its provisional Baha Mar liquidators due to concerns that it had done work for the developer and was also a creditor.

Peter Knox QC, who represented the Government at the winding-up petition hearing before Justice IanWinder on Friday, said the Government had decided to drop Ernst & Young as its nominee in favour of Bahamian accountant Ed Rahming, a partner in KRyS Global (Bahamas), and two UK accountants, Mark Cropper and Alastair Beveridge of AlixPartners Services.

This is the second time the Government has changed its provisional liquidator nominee. It had initially proposed PricewaterhouseCoopers (PwC), but Baha Mar’s contractor, China Construction America (CCA), raised concerns as PwC’s Chinese arm is the external auditor of CCA’s Beijing-based parent, China State Construction Engineering Corporation(CSCEC).

“When a company is insolvent the interests of the creditors takes precedent. What matters now more than anything else is the interest and desire of the creditors,” Mr Knox submitted to the judge, noting that no other creditor was backing the appointment of Ernst & Young as provisional liquidators.

He said the new liquidators were “ready, willing and able” to get to work. Mr Knox submitted that AlixPartners, a prominent international corporate restructuring and consulting firm, has experience in China, adding that this was important since Baha Mar’s lender was the China Export-Import Bank

Attorney Wayne Munroe QC, who appeared on behalf of the Gaming Board, directed the court to Order 4 of the Companies Liquidation Rules, saying: “This is a lot to do about nothing.”

He said he was alarmed that two partners from Ernst & Young were at Friday’s Supreme Court proceedings but had not been appointed. Mr Munroe said there was no question to the firm’s competency, but acknowledged it was alleged to be a Baha Mar creditor.

“Why Ernst and Young is still hanging around is beyond me and speaks very badly for them,” said Mr Munroe.

James Corbett QC, who appeared for Baha Mar, said there was no question that the liquidators appointed were technically qualified. “This is not some creditor competition. No one has the unqualified right to say who should be appointed,” he submitted. “There is no mechanical rule that the creditors get to choose who is appointed liquidator

Justice Winder accepted that it was up to the court to decide who the provisional liquidator should be. He said there was no challenge to the integrity and qualifications of the Cayman-headquartered KRyS Gobal and AlixPartners.

The extent of their powers is yet to be determined. The substantive winding up of Baha Mar will be heard on November 2.