Described by the Ramsahoye Commission as “the moving figure behind the Hyatt Regency Resort” that went bust less than two years after it opened for business, Gavin French is facing a prison sentence in his native UK.
According to British media reports, French lied when he stated in a police document that the driver of his Range Rover Vogue when a camera caught it speeding at 39 mph in a 30 mph zone was his near blind, crippled, hospitalized and dying 79-year-old father John French.
Described by the British press as a multi-millionaire property tycoon with companies in Saint Lucia, Gavin French told Plymouth Crown Court his business associate on the island was “a former prime minister of Saint Lucia, Michael Pilgrim.”
Alas, he was not nearly as truthful when it came to the charges leveled against him. By all prosecutor David Gittens told the court, John French was not capable of driving anything other than a mobility motor scooter with a top speed of eight miles an hour. The day before the camera on Exeter Road, Exmouth was activated he fell off his scooter and injured his hip, as a result of which he was taken to the Royal Devon and Exeter Hospital. At the very moment the Range Rover activated that camera he was undergoing an operation on his hip, so it is perfectly plain he could not have been the driver.
Said Gittens in court: “Gavin French was informed of his father’s accident while in Saint Lucia. He boarded a Virgin Atlantic flight, and at the time of the speeding offence was en route. We don’t know who was driving but the one person it was not was his father. Our case is that if his father picked up three points it would not matter because he was never going to drive a vehicle again. John French was in poor health, had very poor eyesight and could only read with a magnifying glass. He had severe bronchial troubles and could not have driven any car. His own Volvo had been scrapped six months earlier.”
“The crown’s case is that Gavin French nominated his father as the driver to protect whoever had been driving from receiving three points on their license,” said Gittens. His case is he genuinely believed his father was driving when he filled the form but he must have known perfectly well he was not because he was flying to see his father after the accident.”
French’s final statement before the court was that he had “no idea” who was driving his car at the time of the offence and had been “an idiot” for filling in the form incorrectly. He told the jury he had made “an honest error.”
The trial lasted four days. French was found guilty of “perverting the course of justice” and is currently awaiting sentence. His father John never recovered. He died a month after leaving hospital.
Gavin French is especially famous in Saint Lucia, as much for his role in the so-called Rochamel affair as for his failure to appear before a related commission of inquiry despite an official invitation to give evidence. Reporting on his unexplained absence, Sir Fenton Ramsahoye wrote: “The commission endeavored without success to get information from Mr. Gavin French who was the moving figure behind the establishment of the resort, but without success whatsoever. Mr. French gave no statement and supplied no information to the commission but we feel he was in a position to say why the project failed in the hands of the hotel company and how it came that the government and people of Saint Lucia were left to carry the burden of considerable uncompensated financial loss.”
The project Ramsahoye referred to was the hotel formerly known as Hyatt Regency, now Sandals Grande. Built and owned by Gavin French’s companies Rochamel Construction and Pigeon Point Hotels Limited, the Hyatt opened its doors on 14 April 2000 and went into receivership on 12 December 2001, largely because French refused to further invest in the venture. Shortly before it belly-upped, he told STAR reporters the hotel had been running at great loss from the moment it opened for business.
“Hyatt Corporation [operators of the hotel] presented us with a budget that projected further operational losses for 2002 without even addressing our debt service,” said French. “This was obviously not acceptable. We were left with no other choice but to reject the budget. The bank’s only option was to call in the receivers.”
French described the debt-ridden Rochamel Construction as “a $100 entity that doesn’t own a thing. We could have walked away while owing millions. We didn’t because we felt morally obligated to stick with it.”
The bankrupt hotel was in June 2002 sold to Butch Stewart for a reported US$13 million. On 17 December, some six months after the sale, the then prime minister Kenny Anthony, in his capacity as finance minister, presented to parliament a resolution that sought approval to borrow $US41 million “for the purposes of financing government’s capital works program and for refinancing the government’s obligations in respect of the former Hyatt Hotel”—a resolution that would come in for much heated discussion during the Ramsahoye inquiry initiated by the Stephenson King government shortly after taking office in 2006.
Among the matters listed for investigation was “the financial involvement of the government of Saint Lucia in relation to the payment of US$17,092,350 to the Merchant Bank of Trinidad and Tobago to satisfy debts owed by Frenwell Limited; losses suffered by the government of Saint Lucia in relation to payments and/or expenditure concerning the matters specified . . .”
It turned out that the amount parliament authorized the government to borrow from the Royal Merchant Bank in December 2002 was never received by the borrower. To quote from the Ramsahoye Report: “The Royal Merchant Bank purported to deal with the sum of US$41 million it was lending the government of Saint Lucia in the following way. It deducted US$17,092,350 for the debt of Frenwell Limited comprising loans plus interest. It deducted a further US$584,000 for fees—and it paid as balance US$23,323,000 to the government of Saint Lucia.”
As for Frenwell Limited, the commission described it as having had “no substance save for cumulative preference shares it purchased in the hotel company that lost its assets in the sale, thus rendering it useless to pursue any remedy against the company if it was possible to do so. The government and people of Saint Lucia would have had some leverage as a minority shareholder at the time of the sale of the assets of the hotel company if it had cumulative preference shares in that company. But it had none. It is also to be observed that at the time of the sale the government had not paid any debt. Such payment would have been the foundation of any claim by the government but nothing could be legitimately paid until after the resolution was passed by parliament—when the assets of the hotel company had already been realized and used to pay debts.”
Finally: “We did not discern any attempt to protect the government and people from the loss. The prime minister and minister for finance had responsibility for the transaction whereby the money was lost. The project as it was conceived failed without the government and people being protected from the total loss of US$41,592,350 and the costs associated with the repayment of debts owing by Frenwell Limited.
“We consider the government was obliged to protect itself by ensuring that it had equity in a viable concern in the event it was called upon to meet debts of the hotel company. At this inquiry Dr. Kenny Anthony, through his counsel, took the position that the equity would have been valueless because of the failure of the company. We consider that it would have been prudent for the government of the day to ensure it had an equity in the hotel simultaneously with its being called upon to pay any of the hotel company’s debts, in accordance with the development and concession agreement. Indeed, that was the clear understanding when the agreement of 12 December 1997 was signed by the prime minister and minister of Finance . . . We consider that the loss which the government and people of Saint Lucia suffered in this matter was the result of maladministration and we recommend that where the government enters into contracts for the procurement of goods and services the law regulating such agreements should be strictly followed.”
Meanwhile, the commission could find “no oral or documentary evidence establishing a contractual relationship between Frenwell Limited and the government of Saint Lucia.”
It emerged that the company was incorporated in Saint Lucia by McNamara and Company on 14 January 2000—three years after the government signed its initial agreement with the owners of Hyatt Regency, also Frenwell’s sole directors.
The Hyatt Regency’s failure had no evident negative impact on the affairs of Gavin French. He went on to build other hotel projects in the north of the island, with the usual concessions, again quite controversially. But just when it seemed the gentleman had disappeared from the face of Saint Lucia, if not the face of the earth, UK news reporters caught up with the “multi-millionaire and property tycoon” at Plymouth Crown Court where he was successfully prosecuted for perverting the course of justice by misrepresenting the facts of a traffic offence.
It remains to be seen whether Gavin French is sentenced to imprisonment and how this will affect the companies he operates with his presumably influential business partner the former prime minister of Saint Lucia!