Gareth Manning, Gleaner Writer
The Hilton Kingston Hotel in New Kingston. - FILE
THE WYNDHAM property in Kingston and Comfort Suites in Ocho Rios are controlled by Ronald Kelly's hotel company RHK Capitals of Canada, according to the latest twists in an unfolding Canadian pension fund saga.
Businessman Ronald Hubert Kelly, 62, is a former Canadian priest who now lives in Panama.
The Hilton Hotel currently manages the Wyndham property, while Cane Ridge Resort manages on the Comfort Suites property. Mr. Kelly's ownership interest in the Wyndham was confirmed locally.
Reports from the Canadian press indicate that Canada's Commercial Industry Workers Pension Plan (CCWIPP), the largest private-sector, multi-employer pension fund in that country sank Can. $280 million of the workers' retirement funds in hotel properties in the Caribbean. The investments resulted in massive losses and a cutback in pension benefits.
Just last week, Cliff Evans, a former union leader who was a trustee of the fund tendered his resignation.
The CCWIPP is a part-owner of the Wyndham and Comfort Suites properties.
DENIED ALLEGATIONS
Mr. Evans who is a founder of the CCWIPP, confirmed that he left the board, but denied allegations that the pension plan made dubious investments in exotic money-losing Caribbean resorts or numerous other ventures.
In August, The Gleaner reported that the pension plan sank millions of dollars into several hotel properties in Jamaica and the Bahamas, through Propco, one of several similarly named companies it had set up. The CCWIPP's investment committee established the companies to monitor the plan's investments.
The Ontario Financial Services Commission (FSC) stated that Can $167 million was lost due to poor management after the pension plan acquired shares in the properties in 2000, while it consistently loaned Kelly millions of dollars to help him stave off losses. Pension Officer at the FSC Linda Ellis confirmed this with The Gleaner.
NOT ENOUGH STEPS
Additionally, the commission accused the CCWIPP of not fulfilling its obligations to workers and members under the pension plan. It said not enough steps were taken in respect of the Caribbean development, to meet fiduciary obligations under Canada's Pension Benefits Act.
The FSC has still not indicated whether it will charge the CCWIPP under the Act.
The CCWIPP has assets of more than Can $1.2 billion. It has about 275,000 beneficiaries, including 167,000 active members.
Evans founded the union's pension plan in 1979 and was chairman of the committee that handled trustee-directed investments for many years. It once made an investment valued at 45 per cent of the plan's assets.
Evans headed several companies that the CCWIPP set up to make multimillion-dollar investments.
SOME FIRMS BANKRUPT
Investments included several hotels, a hospitality management company, a financial firm, a meat-packing operation, a shoe maker, fish- and potato-processing plants, undeveloped land, a magic-theme restaurant chain and an Internet provider that advances money to litigants. Some of the firms are now bankrupt.
The FSC said it appeared the plan's board of trustees did not take "any steps" to ensure Evans's investment committee had the necessary expertise to decide many ventures.
Evans denied the commission's findings. He also noted that Kelly was initially only a minor player in a hotel company that received pension plan funds.
According to the media reports, Kelly left the church in 1990 and began building a real estate company in 1992 with heavy backing from the pension plan.
The pension plan's chairman, Bernard Christophe, said in an interview with Canada's Toronto Star that the plan has not conducted business with Kelly and his companies for several years.
