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NRP Chairman Sued Over Failed Russian Bank License Deal

by Observer Newspaper Staff Reporter, http://www.thestkittsnevisobserver.com/2014/06/27/russian-bank-deal.html

Legal action has been brought against the Nevis Reformation Party Chairman and Legal Advisor, attorney Herman Liburd, over a bank license promised to a group of Russians which never materialized.

Liburd heads the law firm of Liburd and Dash in Charlestown, Nevis.

The lawsuit, filed June 16, was brought by Deon Daniel and Corporate Solutions Ltd. being represented by Theodore Hobson QC.

The suit states that legal action is being sought against Liburd for the “repayment of US$ 185,185.19 (EC $500,000) for a Banking License under a proposed Nevis International Banking Ordinance which was never issued or obtained”.

The following is being claimed in the suit:

In March 2012, Liburd was approached by a representative of a local company on behalf of a “group of Foreign Clients who reside in Moscow Russia, and were interested in obtaining a Banking License to operate an International Bank under a proposed Nevis International Banking Ordinance which he was informed by the defendant was being drafted for enactment”. Liburd was then in charge of the NRP-led administration’s legal department.

A meeting between representatives of the local company, Mr. Bukhtoyarov, Mr. Voronin, then Permanent Secretary in the Ministry of Finance Laurie Lawrence, and Liburd was held at the Four Seasons Resort on April 8, 2012 to discuss the license.

Liburd assured the foreign clients that the drafted bill would be enacted shortly, and that the fee for the license would range between US$ 150,000- $200,000. Following the discussion, the company on behalf of the Russian clients paid a cheque for US$185, 185.19 to Liburd as their attorney, to cover the licensing and legal fees. The cheque was made out on May 29, 2012. Liburd’s firm signed a receipt for the funds and the cheque was cashed by Liburd.

The covering letter sent with the cheque stated that if the license was not granted, the funds would be returned minus Liburd’s legal fees; to which the attorney signed his agreement.

After a High Court judgment overturned the July 2011 election results in August 2012, the Russian investors first asked for the return of the funds. Liburd responded to them both as Legal Advisor and as Attorney at Law, and assured them that the NRP would be successful in the pending fresh elections.

Liburd, in his capacity as Legal Advisor, sent a letter on October 17, 2012 telling the Russian investors to still apply for the license under the existing legislation and it would be valid under the new Act. He also gave the same instructions in another letter as Attorney on November 5, 2012. He further told them to apply for it through a Russian Bank to suit the requirements of the Nevis Offshore Banking Ordinance 1996.

Liburd said, in his capacity as Attorney, that he anticipated the present Administration would be returned and then shortly thereafter they would be in a position to complete the application and issue the License. This was said in a letter on November 30, 2012.

Liburd and Dash established a subsidiary of the Russian Bank incorporation on December 19, 2012 under the banking laws in the name of First Charlestown Bank Limited.

After the Concerned Citizens Movement won the election, the foreign investors again requested the monies be repaid.

Liburd indicated that the money was spent, and requested time to repay it.

The investors eventually lost interest in the proposed venture and contacted a local law firm to demand reimbursement, and a letter was therefore sent to Liburd on February 26, 2014.

Liburd responded on March 6, 2014, denying the money was paid for a license. He stated that it was a voluntary campaign contribution towards the NRP. The investors found this “a crude invention”.

The Russian investors are now claiming the principal money be repaid, in addition to interest from August 27, 2012, and costs.

The Observer contacted former Premier and leader of the NRP Hon. Joseph Parry. He said “The matter has nothing to do with me. I have no comment.”

Liburd could not be reached for comment at the time of publication.