VMIL moving to recover margin loan following judgment against Kintyre Holdings and E-Media Interactive

VM Investments Limited (VMIL) is moving to enforce a Supreme Court judgment handed down in its favour against E-Media Interactive Group Limited and Kintyre Holdings Limited, as it seeks to recover funds from a failed margin loan arrangement.

On Wednesday, Justice Cresencia Brown-Beckford granted summary judgment to VMIL, dismissing applications by the defendants to strike out the claims and awarding costs to the investment firm. The ruling clears the way for VMIL to pursue recovery of outstanding sums related to a credit facility extended to finance the acquisition of shares in Visual Vibe Jamaica Limited, a leading video board advertising company.

The facility, originally sought in September 2022, was intended to support iCreate Limited’s acquisition of Visual Vibe. iCreate Limited has since been renaned Kintyre Holdings Limited, not to be confused with Kintyre Holdings (JA) Limited, which is listed on the Junior Market of the Jamaica Stock Exchange.

According to court documents, the arrangement involved several parties, including Able-Don Foote, Tyrone Wilson and Kevin Frith, with the latter appointed sole director of AHL (SPV) Limited, a special purpose vehicle created for the transaction.

However, the defendants argued that VMIL breached its fiduciary duty by disbursing loan proceeds without proper authorisation. They claimed that the funds were released before the completion of the acquisition and without ensuring the success of a planned rights issue by iCreate, which was supposed to repay the loan. That rights issue was later derailed due to regulatory breaches involving iCreate at the Jamaica Stock Exchange and the Financial Services Commission.

In their defence, the 1st and 2nd defendants—AHL (SPV) Limited and Kevin Frith—asserted that VMIL failed to disclose the recipients of the disbursed funds and that the proceeds were not used as intended. They also claimed reputational damage and financial loss, including missed business opportunities and legal expenses.

In a related move, Frith filed an ancillary claim against Kintyre Holdings Limited and Tyrone Wilson, seeking indemnity and contribution under a Guarantee and Indemnity agreement dated April 3, 2023. He alleged that their failure to honour the agreement led to his exposure to VMIL’s claim and subsequent damages.

VMIL, in a statement issued October 9, welcomed the court’s decision. Chief Executive Officer Rezworth Burchenson said the ruling “reinforces VMIL’s commitment to prudent management in the protection of our stakeholders’ interests,” and confirmed that the company will now proceed with enforcement actions.

The judgment marks a significant development in the ongoing legal saga surrounding the failed financing deal, and VMIL is expected to pursue all legal avenues to recover the outstanding debt.

- neville.graham@gleanerjm.com

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