The New Today

Commentary

Who/what owns/controls SGU?

Last Tuesday, February 1st, the Rt. Hon. Prime Minister bombastically announced in the House of Representatives that government would be receiving a grant of thirty million dollars (USD30MM) from the St. George’s University. This was provided for in the St. George’s University Limited (Amendment) Order 2022 that was tabled for approval in the House of Representatives.

St. George’s University Limited (Amendment) Order, 2022

The purpose of this Order was for the amendment of the Second Schedule of the St. George’s University Act, Cap. 294 A, the agreement between the Government of Grenada and the University, to provide for payment to the Government of Grenada for changes in the ownership and control of the St. George’s University. The Order covers a period from its approval until February 2032.

Payment to the Government for Change or Change of Control

Among the provisions for payment were the following:

  • Current Grant, USD20MM: A payment of USD 20MM. – a Change of Control grant in respect of a February 2022 change in majority ownership of the indirect parent of the University to an existing equity holder. It would be paid within five business days following publication of the Order in the Government Gazette.
  • First Future Change of Control after the Current Change, USD10MM. Advance: Government would be paid an advance of USD10MM against Future Grant payable on the First Change of Control after the Current Change.
  • Establish Mechanism for Payment of Future Grants: The Order establishes a mechanism for payments to Government re future change/future change of control
  • Three (3%) of Value of Transaction: Payment would be equivalent to three percent of the transaction in respect of each Future Change (of Ownership)/Future Change of Control.
  1. First Payment, USD30MM

A lot of emphasis is placed on the amount of USD30MM. The Order explicitly provides as follows:

Whichever Greater: The first payment would be three (3) percent of the transaction or USD30MM. whichever is greater.

Not Less than USDMM: The Government will not receive less than USD30MM.

Three Percent Less than USD30MM: Where the three percent value of the First Future Change of Control is less than USD 30MM, the total value of any grants for Future Changes of Control shall be credited against the amount to be paid in respect of the First Future Change of Control and only the difference from USD 30MM is to be paid to the Government.

Grants Tally Up to 30MM: If at the time of the first Future Change of Control the grants with respect to the Future Changes already tally up to USD30MM or more, the University will pay 3 percent of value of the transaction.

Query: Does this anticipate that there will be more future changes of ownership, prior to future changes of Control and that the Government would already receive grants to the value of USD30MM?

No Future Change/Future Change of Control: In the event that there is no Future Change and/or Future Change of Control, the University agrees to forego any claims for repayment of the advance by the Government.

Dispute Resolution
The provisions for dispute resolution are noteworthy. The Order provides for a dispute resolution process in the event that Government proposes changes/Parliament makes laws or regulations to impose taxes, levies, assessments or remove exemptions from the University.

No Enforcement without University Parties’ Consent: If the mediation process fails and the written consent of University authorities cannot be obtained, Government shall not seek to enforce any Government Action.

Legal Remedies Sought by University: If Government seeks to enforce the Action, the University shall seek legal remedies including litigation. It shall be subject to litigation.

Waiver of Sovereign Immunity: Government waives the right to sovereign immunity in respect of litigation.

  1. Other Provisions of the Order:

Other provisions are:

SGU and Competition to SGU, Grenada: The SGU shall not establish or acquire a School of Medicine in the Caribbean region which competes directly with the University in Grenada without the consent of the Government.

Provision of Health Professionals/Additional Health Service Providers: SGU shall provide 2 incremental full-time physicians for clinical services in addition to what the University currently provides and one full time health professional.

Points to Ponder:

Value of Transaction: What is the value of the transaction for which the government will receive a grant payment of USD30MM provided for in the Amendment Order, 2022? Given that the Order provides for 3 percent of the value of transaction, that suggests a USD $1billion transaction. MOH-NEEEEY!!!

Grants vs. Taxes: In whose interest are these provisions for payment of “grants” when property changes hands? State laws provide for PROPERTY TRANSFER TAXES and for payment of ALIEN LAND HOLDING LICENCES (or has this been abolished to for the Citizenship by Investment and real estate speculators). It is the sovereign right and responsibility of a country to impose taxes. Taxes are the revenue with which a government finances the many competing priorities with which it is tasked to deliver.

Duration Till 2032: Worthy of note is that this arrangement will last just until 2032.

Who is in charge: Refer to Dispute Resolution in Section 4 and the provision that Government Action cannot be enforced without written consent of University Parties. Who the hell is in charge in Grenada, is it the University Parties or is it the Government of Grenada?

Home Grown Structural Adjustment 2014-2017, Revenue Measures: As part of the revenue measures required by the Structural Adjustment Programme, the Government of Grenada was required to reduce the tax concession and exemptions afforded St. George’s University? Was this ever enforced? What is the current status?

Who Owns/Controls SGU
Since this announcement in Parliament last Tuesday, February 1st, my curiosity has been piqued. WHO OWNS SGU?

  1. August 2014, Altas Partners LP/Baring Private Equity Asia:

In August 2014, we the people learned that Altas Partners LP, a Canadian based company, and a FUND advised by Baring Equity Asia (own emphasis) had taken a stake equivalent of USD750 MM in the SGU.

However, the original co-founder Charles Modica and the other current shareholders would retain the largest share. The details of the deal were not disclosed. So what is the name of that FUND that was being advised by Baring Equity Asia?

Op Trust: In another article, one learns that Altas Partners led a group of several institutional investors in the SGU transactions, among them OPSEUS Pensions Trust.

  1. Medforth Global Health Care:

At that time we the people were not aware that SGU was one of 2 universities owned by the Medforth Global Health Care. The other university was one Rocky Vista University based in Colorado and in Utah.

CEO, Dr. Andrew Sussan: The CEO was/is one Dr. Andrew Sussman.

Investment in Medforth Global Care: It is interesting to read in another article of August 8th, 2014 that the investment by Altas Partners LP and Baring Private Equity was made in Medforth Global Health Care.

Direct/Indirect Parent: Is/was Medforth Global the parent company of SGU? And are Atlas Partners and the Fund managed by Baring Private Equity the indirect parents?

3.Carlyle Group:

Medforth Global Acquisition: Enter the Carlyle Group….. It would appear that Medforth Global is one of the acquisitions of the Carlyle Group or was/is funded by the Carlyle Group which means therefore that the Carlyle Group has interests in the St. George’s University. One Elliot P.S. Merril is also a member of the Board of the Medforth Global Healthcare.

Direct/Indirect Parent: Does this also mean that the Carlyle Group also are some kind of parent?

4.Additional Points to Ponder

Who/what owns/controls SGU?   At this point, I am giddy! The above information puts some context to references re Future Change and Future Change of Control. Who/what controls/owns SGU?   Is it Carlyle Group? Altas and the group it leads? The unnamed Fund (advised by Baring Private Equity?

SGU Support for Road Works 2014: Even though an Order was not in place, was the St. George’s University contribution of EC$13.4 to capital expenditure in the Ministry of Works in 2014 an advance grant in respect of the changes in equity as a result of the Altas-Baring investment?

The Capital Revenue Estimates 2015 provide the following information on the actual provisional “external aid” provided by the SGU in 2014 for these “capital expenditures”:-

Road Improvement and Maintenance Programme – EC$6,309,677 Project No. 0068510

Asphalt Works: EC$1,163,159; Project No. 0067520

Concrete Works: EC$3,138,371, Project No. 0067521

Construction/Refurbishment/Extension of Gov’t. Buildings: EC$1,208,191; Project No. 0067500.

Mt. Hartman University Town and National Resort Project: Is there any relationship between the SGU and the University Town Project now underway in Mt. Hartman, undertaken by those Chinese developers of the Grenada National Resort Project?

Vaccination Policy: Is the Rt. Hon. Prime Minister’s support for the mandatory vaccination policy of the SGU and the firing of all those workers who refused to submit to mandatory vaccination, linked to the promised change grants………….mohneeeeey?

Absence of Information/Lack of Transparency: It would seem that these amendments were sprung on the House. An article in the Grenadian Voice noted that the Leader of the Opposition, Hon. Tobias Clement, took issue with the fact that the Amendment Order was not included in the list of briefing papers provided to the members of Parliament.

Hon. Gregory Bowen advised that it was not necessary that the Order be on the Order Paper since the entity affected was not a statutory body (own emphasis). If a matter has to come before the People’s House, for the approval of their representatives, there must be TRANSPARENCY – statutory body or not. Why is there this SECRECY? Who/what and why? This response by Hon. Bowen is reminiscent of his and Hon. Joseph’s Press Conference of December 2020 re the Government’s transactions to support payments to WRB re GRENLEC. When will it stop?

Whose Interests
We the people must reflect on WHOSE interests this (Amendment) Order 2022 serves/is intended to serve. Whose interest is this grant arrangement intended to serve? Arrangements in respect of the SGU re grants and exemptions/concessions are the people’s business! WE must mind OUR business!

Sandra Ferguson