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Friday, July 13, 2007
Phillip Paulwell
The sale of Jamaica's fourth cellular licence to Solutrea Jamaica Limited has raised questions concerning inter-connected parties, corporate governance and an alleged failure to pay over sums owed to the Government.
Last month, the minister of industry, technology, energy and commerce, Phillip Paulwell, told the House of Representatives that following an extensive due diligence process, undertaken by the Financial Intelligence Division of the Ministry of Finance and Planning, he had issued the new licence to Solutrea, formerly WISCON Technologies Inc.
"The licence is effective June 1, and the full payment of J$510 million will be made by the end of June," the minister declared in the sectoral debate.
In light of speculati on that sums owed for the cellular licence have not been fully paid, Caribbean Business Report sought clarity on the matter from the Ministry of Finance yesterday. Regarding sums obtained from the sale of the licence, the Ministry of Finance's communications spokesman Cordell Braham said that it was not clear whether the Ministry of Finance had received said sums but that he would make further enquires to obtain a clearer picture on the matter. As to a due diligence process, the Financial Intelligence Division chose to defer to the minister of finance, saying it was unfamiliar with the Solutrea case.
Earlier this week, Jamaica Labour Party spokesman for mining, energy and telecommunications, Clive Mullings, said the licence was sold to Solutrea Jamaica Limited without the recommendation of the Office of Utilities Regulation (OUR) as is required under the Telecommunications Act and that the sale was, for all intents and purposes, "hustled" through without being signed off on by the appropriate agencies. He further questioned whether the sale was subjected to a due diligence process and questioned the interlocking nature of this deal.
Attorney-at-law Minnette Palmer, an advisor to Minister Paulwell, owns a company which, according to the Registrar of Companies, is listed as a shareholder of Solutrea Jamaica Limited. Compounding matters further is the fact that Palmer and her husband's company, Newgen Limited, is embroiled in a controversy over the Universal Access Fund, thus calling into question just how vigorous was the government's due diligence process.
Attempts to contact Minister Paulwell yesterday were unsuccessful.
Minister Paulwell's judgement was called into question regarding both the INTEC and Netserv fiascoes, which resulted in calls for his resignation. The then prime minister, P J Patterson dismissed those calls, putting Paulwell's mishaps down to "youthful exuberance".
In light of the brewing controversy, the Ministry of Technology has suspended granting the cellular phone licence to Solutrea ostensibly because it failed to meet conditions outlined in the sale agreement.
In a letter to Solutrea on July 11, 2007, Paulwell wrote: "It has been brought to my attention that Spectrum Management Authority has not received payment for the Mobile Spectrum Licence which was issued to Solutrea Jamaica Limited. Therefore, I hereby stay the decision to offer the said licence until payment is received and all conditions remain fully satisfied."
Addressing the issue of the licence being granted without the recommendation of the OUR, Paulwell said that there was no need as the matter went before the Spectrum Management Authority which, at the time, was chaired by former minister of information and development Colin Campbell, who resigned from that government portfolio as a result of the Trafigura affair. Campbell was also chairman of the Universal Access Fund, which comes under Paulwell's portfolio.
Total Spectrum fees collected since liberalisation began in 2000 comes to just under J$5 billion of which J$4.3 billion came from the sale of cellular licences. Mobile telephone service provider Digicel ended up paying US$47 million for its licence. Back in 1999, Digicel paid firstly US$5 million and the remaining US$42 million six months after, thus paying up in full before it was granted the licence in 2000. The following year, Centennial Jamaica acquired a CDMA licence for US$45 million then sold it to Oceanic Digital, operators of MiPhone.
Phillip Paulwell
The sale of Jamaica's fourth cellular licence to Solutrea Jamaica Limited has raised questions concerning inter-connected parties, corporate governance and an alleged failure to pay over sums owed to the Government.
Last month, the minister of industry, technology, energy and commerce, Phillip Paulwell, told the House of Representatives that following an extensive due diligence process, undertaken by the Financial Intelligence Division of the Ministry of Finance and Planning, he had issued the new licence to Solutrea, formerly WISCON Technologies Inc.
"The licence is effective June 1, and the full payment of J$510 million will be made by the end of June," the minister declared in the sectoral debate.
In light of speculati on that sums owed for the cellular licence have not been fully paid, Caribbean Business Report sought clarity on the matter from the Ministry of Finance yesterday. Regarding sums obtained from the sale of the licence, the Ministry of Finance's communications spokesman Cordell Braham said that it was not clear whether the Ministry of Finance had received said sums but that he would make further enquires to obtain a clearer picture on the matter. As to a due diligence process, the Financial Intelligence Division chose to defer to the minister of finance, saying it was unfamiliar with the Solutrea case.
Earlier this week, Jamaica Labour Party spokesman for mining, energy and telecommunications, Clive Mullings, said the licence was sold to Solutrea Jamaica Limited without the recommendation of the Office of Utilities Regulation (OUR) as is required under the Telecommunications Act and that the sale was, for all intents and purposes, "hustled" through without being signed off on by the appropriate agencies. He further questioned whether the sale was subjected to a due diligence process and questioned the interlocking nature of this deal.
Attorney-at-law Minnette Palmer, an advisor to Minister Paulwell, owns a company which, according to the Registrar of Companies, is listed as a shareholder of Solutrea Jamaica Limited. Compounding matters further is the fact that Palmer and her husband's company, Newgen Limited, is embroiled in a controversy over the Universal Access Fund, thus calling into question just how vigorous was the government's due diligence process.
Attempts to contact Minister Paulwell yesterday were unsuccessful.
Minister Paulwell's judgement was called into question regarding both the INTEC and Netserv fiascoes, which resulted in calls for his resignation. The then prime minister, P J Patterson dismissed those calls, putting Paulwell's mishaps down to "youthful exuberance".
In light of the brewing controversy, the Ministry of Technology has suspended granting the cellular phone licence to Solutrea ostensibly because it failed to meet conditions outlined in the sale agreement.
In a letter to Solutrea on July 11, 2007, Paulwell wrote: "It has been brought to my attention that Spectrum Management Authority has not received payment for the Mobile Spectrum Licence which was issued to Solutrea Jamaica Limited. Therefore, I hereby stay the decision to offer the said licence until payment is received and all conditions remain fully satisfied."
Addressing the issue of the licence being granted without the recommendation of the OUR, Paulwell said that there was no need as the matter went before the Spectrum Management Authority which, at the time, was chaired by former minister of information and development Colin Campbell, who resigned from that government portfolio as a result of the Trafigura affair. Campbell was also chairman of the Universal Access Fund, which comes under Paulwell's portfolio.
Total Spectrum fees collected since liberalisation began in 2000 comes to just under J$5 billion of which J$4.3 billion came from the sale of cellular licences. Mobile telephone service provider Digicel ended up paying US$47 million for its licence. Back in 1999, Digicel paid firstly US$5 million and the remaining US$42 million six months after, thus paying up in full before it was granted the licence in 2000. The following year, Centennial Jamaica acquired a CDMA licence for US$45 million then sold it to Oceanic Digital, operators of MiPhone.
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