Citizens Bank Guyana Inc., through the High Court, is seeking to recover more than $320 million from Chinese logging company Baishanlin and its affiliate company Puruni Woods Products Inc. for money it had loaned for the purchase of 100 acres of land at Providence, East Bank Demerara.
According to two legal notices published in Saturday’s edition of the Stabroek News, the local bank is also seeking almost $3.5 million in additional sums for legal fees.
The land, which was sold by Central Housing and Planning Authority (CH&PA) to businessman Brian Tiwarie, had been repossessed by Citizens Bank after he defaulted on the mortgage. It was later sold by the bank to Tamesh Jagmohan of Precious Mining Inc. for over $1 billion. Tiwarie, prior to the repossession, had sold the land to Chu Hongbo, the Managing Director of Bai Shan Lin.
The first legal notice involves a matter between Citizens Bank and defendents Puruni Woods Products Inc., whose registered office is located at Tract ‘SA’ Block 2, Providence, Chu Hongbo, Chu Wenze and Zhang Lina. It informed that a statement of claim was filed on June 7th, 2018, in the High Court asking for $311,405,153.92 with interest at a rate of 17% per annum on the sum of $242, 474,921.92 from May 26th, 2018 to the date of payment; any other reliefs deemed necessary; as against the second, third and fourth names defendant, jointly or severally $311,405,153.92 with interest at a rate of 17% per annum on the sum of $242, 474,921.92 from May 26th, 2018 to the date of payment and the sum of $2, 310, 508 as legal costs.
In the second notice, Hongbo is listed as the defendant. The statement of claim was filed on May 2nd in the High Court. Citzens Bank is asking for $11,904,264 along with interest at the rate of 18% per annum from March 6th, 2018 until fully paid and legal costs in the sum of $1,104, 255.60.
The defendants are asked to take notice that if they wished to defend the actions, Affidavits in Defence must be prepared within 28 days of the final date of publication of the notices, same must then be served on Attorney Neil Boston SC and then filed at the court. It was noted that if no such affidavit is filed, “final judgement may be given against you notwithstanding your absence.”
According to the available information, Tiwarie had signed an agreement via his Sunset Lakes Inc. company with the CH&PA to purchase and develop the 100 acres of land at a cost pegged at $475 million. He paid a quarter of the sum and had six months to pay off the balance.
In 2014, Tiwarie went into partnership with Hongbo and it was agreed that Hongbo would pay him US$8 million and develop the site. As part of the agreement, Tiwarie would also get to keep some of the house lots in the gated community for his personal use.
However, Tiwarie took Chu to court in 2016 for the balance of US$4 million on the agreed purchase price. He has maintained that the lands were never sold wholly to Hongbo as he remained a part of the partnership and since Chu defaulted, he should have either gotten his due amounts or the equivalent in lands.
Citizens Bank Guyana Inc., which claimed it was owed for a loan on the 100-acre property, appointed Nigel Hinds as its receiver in the second half of 2017 as it sought to recoup its money. The loan was granted two to three years prior.
In late August, a full-page advertisement appeared in all of the daily newspapers announcing that the 100 acres were up for sale and that accountant Hinds had been appointed Receiver-Manager of Sunset Lakes Inc.
Shortly after, the CH&PA announced that it had taken to the court seeking the rescinding of the 2014 sale to Tiwarie.
The CH&PA issued a press release disclosing that on July 20th of this year, it commenced court proceedings to repossess the land.
CH&PA’s Chairman Lelon Saul, when contacted by this newspaper, had explained that his agency lost its bid through the High Court to have the lands returned for outstanding payments and a breach in contract.
“The court ruled on the side of the bank, Citizens Bank, and the law caters for the receiver to draw down on a defaulting mortgage. They said that CH&PA’s case with Sunset Lakes meant a breach in contract,” Saul had said.
Jagmohan, who is now the new owner of the land, paid Citizens Bank Guyana Inc in full.