A submission worthy of more serious consideration

The following submission was forwarded to me anonymously.

Over the past two years I have received a number of messages from various owners regarding accounting records and financial statements of the Coral Beach. In essence the following summarizes my understanding of the messages as well as other aspects of the matter.

1. The owners of the Coral Beach have not been provided with any form of financial statement for at least two and probably more years.
2. The accounting records at the Coral Beach have not been audited in part or in whole for at least three years.
3. In fact, based on the form of financial statements received by at Annual General meetings of the Coral Beach up to approximately January 2004 and based on the auditors letters (then issued by Deloitte or Deloitte Coopers Lybrand), the accounting records of the Coral Beach have not been subject to a proper audit (as prescribed for or by the Association of Chartered Accountants) for many years.
4. The Law of Property and Conveyance (Condominium), Bahamas, specifically requires the issuance of an audited financial statement to owners annually, unless this requirement is specifically waived each year by way of special resolution of the owners.
5. At no time have the owners at the Coral Beach ever approved such a waiver.
6. During the years 2005, 2006 and 2007, a significant number of owners have asked for up-to-date financial statements and also for the right to inspect the accounting records of the Coral Beach. The rights to receive or inspect these records are specifically provided for in the Law of Property and Conveyance (Condominium), Bahamas.
7. The Boards of Directors in office in calendar 2005, 2006 and 2007 have specifically failed to and/or refused to issues the requested statements and have refused to permit the requesting owners to inspect the records under the terms and conditions prescribed in the Law of Property and Conveyance (Condominium), Bahamas.
8. In addition, a number of Coral Beach owners have indicated they have been led to understand by various sources that much, if not all of the accounting is being handled by “someone” off-site (location unknown) and that neither the manager at the Coral Beach nor members of the accounting staff at the Coral Beach have full responsibility for the supervision of or the recording of accounting information.
9. The implication, under the foregoing, is that the control and supervision of the Coral Beach records has been undertaken by persons who may include Mr. Rufa, other Board Directors, or other persons who have not been approved by Special Resolution of the owners or by way of recorded Board resolutions.
10. An additional implication is that critical records, which in fact are included in the Common Property of the owners, in fact has been removed from the Coral Beach site and is being held in some other location without the specific approval of the Board or the owners (by way of Special Resolution).
11. Furthermore, the above suggested changes in the location and handling of Coral Beach records has contributed significantly to the inability of owners to exercise their rights to receive specific information and to their rights of inspection as granted them by law.
12. A few specific concerns (selected out of many) that have arisen in discussions among owners are;
(a) that the Coral Beach issued a cheque as a bribe or remuneration for a favour, directly or indirectly, to a union member or associate thereof, and
(b) that a substantial amount of money has been illegally spent on the purchase , repair and maintenance of property adjacent to the Coral Beach without the approval of the owners as required by law, and
(c) that a director used the truck owned by the owners as Common Property for personal advantage without owner approval as required by law, and
(d) that the Beach Bar has been demolished and is being replaced with owner money without the approval required of the owners by law, and
(e) that plans are being developed and paid for with owner money to build a condominiumized building on or adjacent to the Health Centre on site without the approval of the owners as required by law.

Conclusions based on the foregoing

One must keep in mind that the above listed items are, to date, not substantiated by proof.

However, because they are concerns that have been expressed by owners, in the best interests of all owners, those owners have the right to examine and investigate them with the objective of maintaining the integrity of the operation of the Coral Beach in the best interests of all.

Notwithstanding, if certain of the concerns identified in items 1 to 11 above are shown to be accurate, a very serious question arises as to the specifics of the situation.

The question is:

Have the owners been or are the owners now the victims of theft of Common Property owned by them?

One should give consideration to the observation that the records of the Coral Beach are, of themselves, Common Property. This observation is substantiated in part by the fact that the records have been created at the expense of the owners by way of their Common Area Fees.

“Theft” has been legally defined (as we understand it) as;

“The taking of property without the owners consent”

“The fraudulent taking of personal property belonging to another, from his possession, or from the possession of some person holding the same for him, without his consent, with intent to deprive the owner of the value of the same.”

It seems that owners in their own best interests should decide the answer to the above question.

If theft of Common Property, as discussed above, has been committed, what should owners at the Coral Beach consider?

Owner consideration might be given to the following questions.

1. Should investigation by the police be requested? Should charges be laid?
2. Should further investigation by Immigration or the Department of Labour be requested? In this situation, a question that may be considered is whether the records which are being held offsite (if that is the case) are being manipulated or managed by persons who do not have the authority to work in the Bahamas).
3. Is the person or persons supervising the off-site records or manipulating the off-site records doing so with the full approval of the Coral Beach owners?
4. What evidence is there that the Board, in its capacity as a full Board, considered and approved the arrangement?
5. If an off-site arrangement is in place that was not approved by both the Board and the owners, what are the names of the specific persons who authorized and enacted the change?
6. What is or has been the dollar and cent costs to owners if the above concerns are proven to be of substance?

Regardless of the outcome of any consideration of the above matters, what must be done immediately to preserve the value and integrity of the owners’ positions in the Coral Beach?

The answer is simple and direct.

A fully accredited independent Chartered Accountancy firm must be appointed immediately to conduct a full audit of the Coral Beach records.

The conduct of the affairs of the Coral Beach over the past two or three years demands that this step be taken immediately. Without an audit the owners are subject to whatever are the whims or objectives of the Board or its more powerful members and the damages they may cause.

The need for an audit is not a question of “should we audit?” An immediate audit is an absolute must. Without it, the owners know nothing.