By Lavern Clarke, Staff ReporterHEAD OF the Premium Group of companies, Opposition Leader Edward Seaga, announced yesterday that he has placed one of his companies, Premium Investment Limited (PIL), into voluntary liquidation to clear debts on Enchanted Garden, his resort property in Ocho Rios.
Faced with consumption tax penalties and interest that amount to approximately $120 million, the majority of which is a penalty on $30 million of unpaid General Consumption Tax (GCT), Mr. Seaga said Premium is being wound up because of "severe cash flow problems, accumulation of debt and tax arrears" that have hit one of its subsidiaries, Town and Country Resorts Limited.
Word came late last night that the property which does limited business, would remain operational for now. Sources told The Gleaner that the papers declaring the company solvent, that is capable of clearing its debts, were filed with the Registrar of Companies two days ago, and that Douglas Chambers of the chartered accounting firm Chambers Henry and Partner has been appointed liquidator.
MAJORITY OWNERSHIP
Enchanted Garden is vested in two companies: Town and Country Resorts as the management company, and Premium Investments which owns the real estate and assets.
Mr. Seaga claims majority ownership in Town & Country, which in turn is wholly owned by Premium Investment.
Town and Country "has no real assets," said key sources, but its current assets amount to about $6-8 million. Its liabilities also include statutory taxes, the amount of which has not been disclosed, but Mr. Seaga said total liabilities are below $200 million.
The next step is for the Opposition Leader to resign as director of the company, which he has already done said insiders, paving the way for Chambers to take control.
Enchanted Garden based on a valuation done five years ago is worth about US$16 million ($944 million), The Gleaner was told. Sources add that Premium's accounts of two to three years ago show assets amounting to almost $700 million but that more precise figures will emerge when the accounts are restated.
DISCHARGING THE DEBT
The company law mandates that the appointed liquidator determines the company's true financial position in relation to its assets and liabilities, and having done so, to make arrangements to discharge the debts. Once Chambers takes over the helm of the company as "sole director", the law requires him to cease operations, but there is an exception where such closure is deemed harmful to the business's value .
Enchanted Garden is a maze of plants, and is populated by rare birds, flora and fish.
"The property does some tours, and the liquidator has no plans to stop trading," The Gleaner was told. "Closing it down means the property would lose half of its value."
Mr. Seaga said Tuesday that Premium Investments has "substantial assets" and that after the debts are paid, the company would still have a surplus in excess of $200 million. "I took this unusual decision of placing Premium Investments, a financially solvent company into liquidation because it is the surest way to protect the interests of the creditors and allow for the future development of the Enchanted Garden as a prime resort," his release said.
