Cepep writes ex-board: Come clean on $1.4b contract extension

Cepep Company Limited headquarters at Ste Madeleine. - File photo

The Cepep Company Ltd has initiated legal action against its former board by issuing a pre-action letter to 10 former board members, warning they could face legal action over alleged breaches of fiduciary duty, fraud, and misrepresentation in the extension of more than 300 core contracts to 2029.

The letter, sent through Freedom Law Chambers, led by Anand Ramlogan, SC, on behalf of Cepep, follows similar legal steps against former chairman Joel Edwards. The letter, dated August 13, sought explanations from the ex-directors for their votes in favor of extending contracts — which would have cost the state $1.4 billion and which has triggered lawsuits, including one filed by a contractor, Eastman Enterprises Ltd, over the termination of contracts.

At the center of the dispute is Board Note 01/25, signed by Edwards on April 24 —mere days before the April 28 general election — which stated that the cabinet had approved the extensions. Cepep’s CEO, Keith Eddy, and corporate secretary, Nicole Gopaulsingh, have said in affidavits in the Eastman case that the board acted on the understanding that it was ratifying a cabinet decision, based on assurances from Edwards that he had received the information from then line minister Faris Al-Rawi.

However, Edwards later claimed in a sworn affidavit that the board note contained an “error” and that no such cabinet approval had been given.

Edwards, in an affidavit in support of Eastman’s lawsuit, said that during his tenure, cabinet approval was never sought for renewing or terminating contracts. He claimed a board note suggesting cabinet approval for a mass contract extension was a mistake, which he had ordered to be corrected, though he was unable to locate the revised version.

However, in response to a pre-action letter from Cepep’s attorneys, Edwards said the extensions were covered by a 2017 cabinet decision.

He said cabinet note F(17)196 (Revised), together with the recommendations of the Finance and General Purposes Committee, crystallised in cabinet minute No. 1327 of July 27, 2017, would prove the existence of cabinet approval, which authorised the termination, suspension, renewal or issuance of Cepep contracts.

Eddy has refuted this, providing WhatsApp messages in which Edwards explicitly told board members that cabinet had granted approval.

The pre-action letter accused the former board members of failing to verify the claim before approving the extensions via a round-robin vote just days before the general election. Cepep argues that if any director knew there was no cabinet approval, they were obligated to raise the issue immediately.

Attorney Aasha Ramlal,in the letter to the ex-board members said, “We have been instructed to seek clarification from you on whether this is in fact so in light of the fact that the email with your vote did not give any other reason for the same.

“This information is highly relevant to our advice in this matter and the determination of whether Cepep has a viable claim against you for inter alia breach of fiduciary duty.

“It would have no doubt been obvious to you that this was a highly suspicious and unusual course for the board to adopt mere days before the general election.

“We have been asked to advise Cepep on whether, apart from the chairman, other members of the board of directors also breached their fiduciary duties and failed to act honestly and in good faith with a view to the best interests of Cepep. “Your vote has seriously jeopardised Cepep,” Ramlal said.

She said the decision resulted in contracts being extended regardless of whether they had expired or had time left, resulted in the company being sued twice, incurred expense in engaging legal and forensic resources to investigate and respond to the fallout; suffered reputational damage due to accusations of unauthorised expenditure and financial impropriety in the media; and incurred financial risk exposure and loss to over 300 contractors for millions of dollars.

The former board members were asked to explain if, given the circumstances of the vote, they had relied on the chairman’s statement that cabinet had approved the extension of all contracts after discussions with the CEO in March 2025, and if they had simply acted to ratify what they believed was a recent cabinet decision.

They were also asked whether, at any time before, during, or after the approval process, they had been told by the chairman or anyone else that the claim of cabinet approval might have been wrong, and if so, what the error was and when and how they learned of it. In addition, they were asked if the chairman had informed them that the Board Note was wrong in stating that cabinet had granted approval, whether he said it would be revised and circulated, what actions they took if they received such information, and whether they had ever been sent a corrected version of the board note.

The High Court, in a ruling by Justice Margaret Mohammed last week, noted that the matter raised “serious questions” and referred the case documents to the Director of Public Prosecutions for review.

The letter gives the former directors 14 days to provide detailed responses to five key questions, including whether they relied solely on Edwards’ statement, if they were ever told the cabinet approval claim was false, and whether they received any corrected board note.

“This was a $1.4 billion decision taken without a board meeting, mere days before an election,” the letter said, calling the situation “a most serious fraud” against the state-owned company.

On August 12, DPP Roger Gaspard, SC, said he will review the court documents and decide if a police investigation is needed, but stressed he cannot set deadlines for the police.

He also said he would inform the public of any major developments.

“I will peruse the subject documents,” the DPP told Newsday. “If there is a need for an investigation, that would have to be done by the police.

“I cannot impose any time frame on the police,” he said, adding, “I do consider it my duty to apprise the people of Trinidad and Tobago of any significant developments, especially since my office is a public one.”