By Andrew Green, Staff Reporter
The Enchanted Garden in St. Ann.
LEADING up to the General Election last year, Opposition Leader, Edward Seaga, nearly succeeded in relieving his companies from their tax obligations related to Enchanted Garden.
Premium Investments Ltd. and Town and Country Resorts Ltd., two companies of which Mr. Seaga is a key shareholder, last week lost their appeal at the United Kingdom Privy Council. It ruled that they owed $30 million in General Consumption Tax (GCT), plus penalties, on their Enchanted Garden property in Ocho Rios, St. Ann.
Their full tax obligation is expected to total more than $100 million. The appeal had been based on the argument that another company, DHC Ocho Rios Hospitality Corporation, registered in Delaware in the United States, was responsible for this obligation.
If Mr. Seaga's plans had proved successful, those tax obligations related to his two companies should now have been assumed by a new owner for the resort property.
"Inso far as my involvement with Enchanted Garden, that is about to be severed," Mr. Seaga said on September 10 last year. He was speaking at a Gleaner Editors' Forum at the company's Kingston office.
"Discussions have been going on for some time concerning the sale of the property," Mr. Seaga said. "Coincidentally, just last night the final arrangement was made for me to put myself in a position where I can truly say that the property has been sold."
The new owners would take on whatever taxes are due, Mr. Seaga said. "They are the ones who are going to the tax authorities and deal with the tax authorities as everybody does and everybody is entitled to do, and they are the ones who are going to eventually clear (the) indebtedness."
Until the final element of the deal was in place, "which is going to be some time next week," Mr. Seaga said he did not wish to say the property had been sold.
The Gleaner revealed the following week that American Leisure Holdings, Inc. (ALH), in a press release published over the Internet on August 21, had announced that its subsidiary company Leisureshare International PLC, a UK company, had signed a memorandum of understanding to acquire the Enchanted Garden Resort.
A month before that, on July 11, American Leisure Holdings had announced in a previous press release that Mr. Seaga had been appointed as one of its new directors.
And a month after Mr. Seaga's appearance at the Gleaner Editors' Forum, coincidentally also a day before the October 16 General Election, the sale announcement was made.
"The shares of my company, Premium Investment Limited, which owns Enchanted Garden, have been sold," said a full-page advertisement in The Gleaner on October 15, attributed to Mr. Seaga. It said, "The agreement with the purchaser is that they will assume responsibility for all taxes and debts."
The purchasers had held a first meeting with the Minister of Finance, Mr. Seaga's statement said. "It was agreed that all tax arrears would be dealt with in one package. Transfer of property is within two months." Minister of Finance and Planning, Dr. Omar Davies responded to the statement through the Ministry's website on the same day. Dr. Davies said he had met with ALH chief executive officer Malcolm Wright on August 14, and had "flatly rejected" the payment proposal put forward by Mr. Wright.
The ALH website states that Mr. Wright is currently president of the company.
Mr. Wright had said he could not pay the tax arrears in the short or medium term, but would be willing to make an initial "good faith" payment of US$50,000 (approximately J$3 million), Dr. Davies stated.
"I am not aware of what has transpired in terms of Mr Seaga's sale of his shares in Premium Investments Limited," Dr. Davies stated. "However, Premium Investments Limited only owns the "common areas" at Enchanted Garden and these "common areas" are already mortgaged for sums in excess of their market value."
In a press conference later that day the Opposition Leader backed away from the statement in the advertisement. Mr. Seaga said there was no agreement in any broad sense as was indicated, but only a decision for the purchaser to come back to discuss the matter of the tax arrears as a package.
