The chief justice of New South Wales, Australia, James Jacob Spigelman, is to head a commission of inquiry in Antigua into the repayment by the government of Antigua & Barbuda of a US$ 29.75 million loan from Japanese desalination supplier IHI to the Antigua Public Utilities Authority (APUA), the government announced on 24 July 2009.
The commission is expected to determine whether, and to what extent, repayment monies ostensibly intended for IHI were diverted into the possession of, or for the benefit of, other persons or corporations; to trace the whereabouts of these funds, whether in Antigua & Barbuda or elsewhere; and to determine whether the persons or corporations involved acted improperly or unlawfully and whether persons who were then in public office are guilty of misconduct.
In October 1984, the government and APUA hired IHI to construct the Crabbs Desalination & Power Plant at a cost of US$ 33 million. US$ 29.75 million, or 85% of the cost, was to be financed by IHI and repaid by the government under a guarantee at 8% interest over a period of ten years from November 1986 to May 1997. The total amount that the government would have had to pay over that ten-year period was US$ 42.245 million.
The government fell behind with its project repayments to Credit Suisse, Foster Wheeler and IHI, and called in West Indies Oil Co principal Bruce Rappaport to renegotiate the debt on its behalf. Credit Suisse and Foster Wheeler were paid off, but a second arrangement had to be made to pay off the IHI debt through a company set up by Rappaport called IHI Debt Settlement based in Hong Kong.
What happened after that has been the subject of civil court actions by the Antiguan government in Antigua and Miami against members of the former Antiguan administration and Rappaport’s company. This has so far resulted in a repayment in settlement of US$ 12 million by Rappaport announced in February 2009 by Antigua’s attorney general and minister of legal affairs, Justin Simon QC.
The Miami civil case against former Antigua prime minister Lester Bryant Bird and opposition member of parliament Asot Michael, is likely to continue in September 2009.