Property Matters – HDC Financing

“…There are a lot of things that did not go right in the NHA and one of those things had to do with accountability…The HDC is not going to function like that. We are required by law to have the accounts ready in a certain period of time. The CEO will be held accountable and the Cabinet will hold the minister accountable and the Parliament will hold the Cabinet accountable. That is what the HDC means…”

—Then Housing Minister, Dr Keith Rowley, speaking at the launch of the Housing Development Corporation (HDC) in October 2005.

Keith Rowley
Former Minister of Housing, Keith Rowley, M.P.

This week I am shifting focus from the ‘Affordability Hoax‘ to the financial aspect of our country’s large-scale public housing program as conducted by the HDC. I am therefore ignoring other agencies such as the Land Settlement Agency and other types of State funding or tax allowances such as mortgage relief etc.

Dr Rowley was referring to these obligations in the HDC Act (No 24 of 2005)

  • S.18 – to keep the HDC’s books and accounts in accordance with proper accounting standards;
  • S.19 – HDC’s accounts to be audited annually to proper accounting standards, with that audit report submitted to the Minister and the Board;
  • S.20 – HDC’s Board to submit its Annual Report to the Minister within three months of the end of the financial year and the Minister to publish that Report to Parliament within three months of its receipt.

But the HDC has never published any audited accounts in the eleven years of its existence, spanning three political administrations, thus far. That failure and/or refusal to publish audits is in breach of those sections of the HDC Act.

Given Dr Rowley’s consistent stand against corruption in public affairs and his subsequent achievement of the Prime Minister’s responsibilities, there is rich irony in the absence of accounts from both NHA/HDC.

What is more, the Integrity in Public Life Act identifies this breach at S. 24 (3) –

“…No person to whom this Part applies shall be a party to or shall undertake any project or activity involving the use of public funds in disregard of the Financial Orders or other Regulations applicable to such funds…”.

In addition, the HDC has raised substantial capital via bond issues in which investors lend their money for a set period of time in return for a fixed interest rate (see below). Those bonds are investment instruments under the regulation of the T&T Securities and Exchange Commission (TTSEC).

HDC’s bonds in issue
(denominated in TT Dollars)

Date of Registration Tenor Rate Principal value
28-Jan-2009 15 years 8.25% $500,000,000
08-Sep-2008 15 years 8.70% $700,000,000
$1,390,000,000.00 issued in 3 Tranches
17-Aug-2005 20 years 7.00% $306,000,000
12-Dec-2005 25 years 7.75% $400,000,000
10-Oct-2006 15 years 8.50% $475,000,000

Source – T&T Securities and Exchange Commission (15th April 2016)

Formal Request for Financial Information

From:”Afra Raymond”
Date: 3 Jan 2017 4:26 p.m.
Subject: Request for Information on HDC finances
To:<XXXXXX@hdc.gov.tt>
Cc: <xxxxxxxx@hdc.gov.tt>

Dear Mr XXXXX,
I have attached my Freedom of Information request for your attention please.

I am requesting details of NHA and HDC transactions in Public Money in the period 2003-2016, during which the current 2002 Housing Policy has been in operation. In this context, the Public Money received would include budget allocations; monies derived from property rentals and sales; bank loans and bond funding. It is important to separate recurrent and capital expenditures. Please itemise the figures by year so that trends can be identified for further examination.

One would expect that the requested details have been already compiled, given that the current HDC Board was reported to have issued a statement in June 2016 that the audits for 2010-2015 were ‘substantially complete’. In addition, there have been widely reported statements by your predecessor that audits for the 2004-2009 period were completed by KPMG.

I am taking the opportunity to extend my good wishes for 2017 to you and your colleagues.

Thank You.

Afra Raymond B.Sc. FRICS

afraraymond.net

The HDC has had two TTSEC Orders against it in respect of Contraventions of the Securities Industry Act 1995 and the Securities Industry Bye-Laws 1997. Those Orders are in relation to HDC’s failure to publish its accounts –

  1. 19th March 2010, with fines totalling $121,000;
  2. 25th July 2011, with fines totalling $400,000 –

Given that no audited accounts have ever been published for HDC, there may be a continuing exposure to TTSEC penalties.

Audited accounts are used to measure performance. On 3 January 2017 I made a formal request for information to the HDC under the Freedom of Information Act (see sidebar). My request was acknowledged, but no substantive reply as yet. Given the repeated claims on audits by several political administrations, there should be no delay. In any case, my request is for far less detail than legally required by the HDC Act.

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2 thoughts on “Property Matters – HDC Financing

  1. Is the Justice system so broken that none of the relevant officers such as the Chief Accountant or CFO can be hauled into court and sanctioned? Do you have a system of TRO’s that would in effect shut this corporation down until accounts can be produced? As a Professor of accounting I am horrified.

    1. Hello Stephen,

      Our political/financial misfeasance is so deeply ingrained that it can be mind-boggling for those who are not in the situation…I see you grew up here in T&T and I thank you for your comment…Just earlier today I was remarking at the position taken by the Housing Minister against the illegal occupation of unoccupied HDC homes by poor families…

      Thanks for joining-in…

      Afra

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