The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Liquidators for The Bahamas’ first-ever crowd-funding platform have signalled they plan to target its principals’ “personal assets” to aid creditors who have “no likelihood of... any payment” on $2m-plus in claims.

Ed Rahming, the Intelisys (Bahamas) principal, and Cheryl Simms, the Kikivarakis and Company accountant, painted a bleak picture for ArawakX creditors in their first Supreme Court report as the platform’s official liquidators by warning that there are virtually no assets available to pay-off its debts.

Revealing that $1.76m, representing 60 percent of the total claims submitted by 15 creditors, have been accepted with $436,410 yet to be approved, the duo indicated they are now turning their attention to ArawakX’s principals themselves, D’Arcy Rahming senior, and his son, D’Arcy junior, as potential sources of recovery.

Mr Rahming senior, a former Bahamas International Securities Exchange (BISX) chief operating officer, did not respond to Tribune Business’s message seeking comment before press time last night although the two ‘blue ticks’ showed he had received and read it.

He and his son have vehemently, and consistently, denied all allegations against them during the ultimately failed battle with the Securities Commission to prevent ArawakX being placed in Supreme Court supervised winding-up. However, the liquidators have accused Mr Rahming and his son of failing to respond to their requests for information on a similar US-domiciled platform they are alleged to have established.

Mr Rahming and Ms Simms also revealed that submitted a report to the Royal Bahamas Police Force on July 12, 2024, over ArawakX’s “unauthorised public offering” that allegedly violated criminal provisions in the Securities Industry Act and its accompanying regulations.

And, with ArawakX’s $140,000 deposit at the Bahamas Development Bank held as security for credit advanced by the same institution, sources of recovery for creditors are few and far between. Marketing materials advertising items for sale feature only a gold cart, some artwork, office furniture, laptops, computers and TV screens - a collection that will realise nowhere near the $1.76m in approved claims.

The liquidators, shifting their focus, reported that they will soon demand that the Rahmings provide a “statement of their net worth”, detailing all their assets and liabilities, to see if these represent a potential source for paying off debts owed to ArawakX creditors.

Detailing that “asset recovery efforts based on net worth” are among their four main priorities, Mr Rahming and Ms Simms wrote in their November 22, 2024, report: “A request of statement of net worth will be sent shortly to the Rahmings by counsel. Based on this information we will determine the way forward with regards to recovery from personal assets.”

However, they alleged that the Rahmings have been less than co-operative to-date on other information requests concerning ArawakX’s Bahamian and US bank accounts as well as Local Investment Hub. “On February 2, 2024, the liquidators sent, via their counsel, a request to the Rahmings for information on Local Investment Hub and all related entities of the company,” Mr Rahming and Ms Simms wrote.

“To-date, we have received no response to our requests for information. A final request will be sent by counsel (Raynard Rigby KC at Baycourt Chambers), and if no adequate response is received within seen days we will seek directions from the court.”

Mr Rigby’s “request” had detailed the liquidators’ concerns and suspicions that ArawakX assets were use to finance the creation of Local Investment Hub, a US company whose website was “a duplicate” of the Bahamian crowd-funding platform.

“We are instructed that at a meeting held with you (and others) by the joint provisional liquidators on January 18, 2024, the joint provisional liquidators shared with you their findings that the assets of ArawakX were used to fund the start-up and operations of a US-based company called Local Investment Hub (LIH),” Mr Rigby told Mr Rahming senior in a letter copied to both his son and their attorney, Khalil Parker KC.

“It appears from the records obtained that you and D’Arcy Rahming junior are noted as officers of LIH. The joint provisional liquidators also discovered that the assets of ArawakX were used to fund the operations of LIH.

“It was also brought to your attention that LIH’s website is a duplication of the website used by ArawakX. You were also informed of the fact that the website used by ArawakX remains inaccessible by the joint provisional liquidators.”

Mr Rigby had continued: “The joint provisional liquidators have formed a provisional view that you are using LIH’s website to trade and carry on certain activities that are identical in the main to those carried on by ArawakX.

“You are further warned that any activity by you on the website is strictly prohibited due to the Order of the Supreme Court and that, should the joint provisional liquidators so discover that trading or other such or similar activity was conducted post the appointment of the joint provisional liquidators, such conduct will be shared with the court.”

Creditors, though, face the prospect presently that they will recover little to zero of what is owed to them by ArawakX. Some 15 creditors, including two former employees and four investors who submitted monies to invest in the four crowd-funding offers completed by the platform but do not feature in any of their share registers, submitted a collective $2.196m in claims.

“As liquidators, we reviewed all claims received and have adjudicated 60 percent of the claimants in the liquidation,” Mr Rahming and Ms Simms wrote in their November 22 report. “As at the date of this report, the company remains insolvent and, although proofs of debt have been received, there is no likelihood of creditors receiving any payment.” With not a single reply, the October 2 creditors’ meeting was postponed.

With the BDB presenting confirmation that ArawakX had agreed on November 23, 2020, that the institution could hold its $140,000 deposit as security for the $378,343 loan that financed the acquisition of its software, the liquidator duo admitted that hopes this could prove a source of creditor recovery have been dashed.

Alexiou, Knowles & Company, the BDB’s attorneys, confirmed on October 8, 2024, that they have initiated Supreme Court proceedings to take possession of ArawakX’s Joe Farrington Road property that serves as collateral for the loan. “The liquidators plan to hand over the keys once the assets therein are sold,” Mr Rahming and Ms Simms.

They are also working to transfer ArawakX’s four completed crowd-fund raises to a new, unidentified registrar and transfer agent. The share registers for all four - Tropical Gyros, Pinnacle Franchise Brands, Nassau Gas and Tanks and Footcare RX - contained discrepancies with more investors shown than those who provided “all necessary information” to confirm their investment;

For example, Tropical Gyros was shown as having 691 investors while only 584 supplied all details, while for Pinnacle just 739 out of 868 provided sufficient evidence. For Footcare Rx, 200 out of 214 came forward, while for Nassau Gas & Tanks some 172 out of 192 supplied the necessary proof.

And, confirming that the necessary report has been supplied to the police, Mr Rahming and Ms Simms wrote: “We were of the view that the company held a ‘public offering’ of its shares in contravention of section 97 of the Securities Industry Act. One hundred and 34 subscribers were found to have signed subscription agreements with the company.

“No approval was sought from the Securities Commission for the ‘public offering’ of company shares or the subscribers. The cash provided by the subscribers was spent by the company and no shares were exchanged.

“The liquidators through this report reported the breach of the Securities Industry Act’s section 97, which is that carrying out an unauthorised distribution or offering is a criminal offence.”