Former CEPEP board members sued over $1.4B pre-election contract extensions

Senior Reporter

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Former Community-based Environmental Protection and Enhancement Programme Company (CEPEP) chairman Joel Edwards and 10 former board members are facing a lawsuit over their decision to approve a three-year extension for contractors just days before last year’s general election.

On Thursday, lawyers representing CEPEP, led by Senior Counsel Anand Ramlogan, filed the case alleging breach of fiduciary duty, negligence, and deceit by the former board. This is the first lawsuit launched by the current United National Congress (UNC) coalition government over decisions taken by a state board under the previous People’s National Movement (PNM) administration.

The defendants are Edwards, Geeta Rampersad, Kirt Bernard, Thomas Sanoir, Wendell Williams, Yinka Jagbir-Garcia, Camille Hosein, Maurissa Smith, Robert Lee, Brian Rock, and Michael Seales. CEPEP is seeking significant compensation, including having Edwards indemnify the company for any liabilities arising from the mass termination of contracts by the current government in June last year.

According to court filings obtained by Guardian Media, in late March 2023, an official from the Ministry of Local Government and Rural Development approached CEPEP chief executive Keith Eddy regarding the contract renewals. The filing claims Eddy consulted Edwards, who allegedly assured him that Cabinet had approved the renewals.

The lawsuit states that Eddy was also contacted by former Minister Faris Al-Rawi, who requested that the renewals proceed but did not provide any written approval. The former board, relying on Edwards’ representations, approved the extensions in a “round-robin” vote days before the April 28 election—Seales abstained from approval but did not raise objections.

CEPEP alleges Edwards made false representations and used deceit to secure the renewals, which could have resulted in approximately $1.4 billion in expenditure. “In each case, Mr Edwards acted dishonestly, knowing the statements were false or misleading, or at least made them recklessly without genuine belief in their truth,” the company’s lawyers said.

The lawsuit further claims Edwards failed in his duty under the Companies Act by not seeking legal advice or considering the financial implications of the renewals before presenting them for board approval. “He failed to ascertain, or disclose to Mr Eddy and the other directors, critical financial details including projected costs, funding sources, cash-flow profiles, and termination exposure, preventing informed judgment,” the filings state.

CEPEP asserts that, apart from Seales, the board members did not act in the company’s best interests or in good faith. “The board’s decision was influenced by improper political considerations, designed to confer financial benefits on core contractors and operational personnel on the eve of the elections to gain an unfair political advantage,” the lawyers said.

Regarding Seales, the company criticizes him for failing to object to the renewals. The lawsuit also addresses a 2017 Cabinet note referenced by Edwards, which purportedly authorized CEPEP’s board to renew contracts to maintain operational efficiency.

CEPEP highlighted that a Ministry of Finance audit in November 2023 raised concerns about increases in contractor numbers, and by January 2024, the ministry directed that no new contractors be hired. The company claims it incurred $6,617,238.73 in losses from paying contractors in lieu of notice following contract terminations.

The company is also defending claims from other contractors, which could result in additional compensation liabilities. “If any contractors’ claims are successful, CEPEP claims damages and equitable compensation from Mr Edwards, including indemnity for all such claims, due to the circumstances arising from his alleged wrongdoing,” the lawyers said.

CEPEP is seeking exemplary and aggravated damages against Edwards, stating that such awards would reflect the court’s condemnation of improper conduct by a public officer.

The case has been assigned to High Court Judge Christopher Sieuchand, who will hold a case management conference in the coming weeks. The board members will then have the opportunity to file their defenses.

CEPEP is also represented by Jared Jagroo, Ganesh Saroop, Aasha Ramlla, Aria Khan, and Aaron Regault of Freedom Law Chambers.