Part 4: Who Approved Broker's Commission?

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There are various concerns with respect to the procedures and processes followed by WICB Directors representatives during their negotiations and ultimate ratification of the new sponsorship agreement with Digicel. As we alluded to earlier, our review of the evidence shows that there is no resolution authorizing the President and other WICB Directors to sign the new agreement.

Our review of the minutes also indicates that the first documented minutes dealing with the new potential sponsorship agreement was on the 22nd May 2004. Our review of subsequent minutes prior and up to 5th July 2004 when the contract was signed reveals no evidence of Board discussion and or ratification.

Our review of the minutes revealed no evidence that the board was asked to approve the commission agreement, which will cost the Board $1,975,000 over five (5) years, plus a 10% on players' bonuses.

Mr David Brookes when questioned about the 21 day exclusive negotiation rights, testified that he had moved to establish that agreement, because by then, the identity of his client Digicel was known and he was afraid that he might have lost the battle to Cable & Wireless. He therefore wanted to conclude the agreement before Cable & Wireless could get a foot in.

Mr Donald Austin, a Cable & Wireless representative, gave evidence to the committee that he had approached the President of the WICB on 17th March 2004 and made a verbal offer of $4 million, which the President accepted as potentially a good deal. It should be noted that this was a larger offer that anything placed on the table by both Digicel and Cable & Wireless previously, and would have been materially more than what the sponsorship agreement currently offers.

Mr Austin requested time to have the agreement concretised and obtain the necessary approval from his superiors. Having done so, he then approached the President again on the 29th March 2004. He was told to discuss the offer with Mr Roger Braithwaite. However, Mr Austin was told that there was a 21 day exclusive negotiating period, so he could not discuss the offer.

The following questions arise:

i) Why did the WICB commit to such an agreement whereby it excluded itself from potential new and better offers from that period, if it did?

ii) Why did the Board sign the new agreement when there was a potential new and better offer on the table from a proven, tried and tested company with whom the WICB had an 18 year relationship, if it did?

iii) Why did the CEO and President not use the opportunity to up the ante to get the best deal possible by making Cable & Wireless, Digicel and any potential sponsors fight it out to maximise its offer?

iv) Why, if ISM was representing the WICB, it tried to conclude the deal with Digicel when potentially there was the possibility of a better offer? Mr Brookes stated that he did not want to lose the deal he had worked hard to achieve; so his personal interest was paramount and not necessarily the WICB; who at the end is bearing the cost of the whole deal.

v) Why did the CEO not go back to Mr Austin after the 21-day agreement to verify the offer was still available, the Board would have been getting approximately US$600,000 more than they ultimately received from the Digicel Contract, which they ultimately signed.

It should be further noted that according to the testimony of the CEO and later confirmed by Mr David Brookes, the commission agreement dated February 23, 2004 which CEO signed was prepared by ISM and later placed on the WICB's letterhead. It is worth noting however, that Clause 17 of the commission agreement states "The agreement shall be governed by and constructed in all respects in accordance with the laws of England, and each party should submit to the non-exclusive jurisdiction of English courts".

The WICB and Digicel, the contracting parties are registered in Antigua and Jamaica respectively, why is the agreement governed by English law?

It should further be noted that the CEO told Mr Austin when he was approached on March 29, 2004, on the advice of the President, the CEO told Mr Austin that he could not discuss C&W's offer because they were in a 21 day exclusive negotiation period.

That is, they have an agreement with Digicel where, for 2l days, the WICB could not speak to any potential sponsor. The following questions arise:

i) Why did the President discuss the said offer on March 17, 2004 when Mr Austin made the offer of $4 million, which the President said they could accept if Mr Austin's testimony is correct?

ii) Is it that the President was not aware of the 21-day agreement?

The evidence presented to this committee shows that Mr Austin/C&W might have been misled by the CEO of the WICB, because in fact no such agreement existed at that time the CEO was approached. The only arrangement of this nature was signed in May 2004. Further, when the CEO was asked why he did not follow up on the $4 million offer by C&W, he said it would have been unethical to discuss the C&W offer while negotiating with Digicel, he never mentioned the 21 day agreement to the committee.

Why the indecent haste having the agreement hammered out and concluded -- all cut and dry over a period of 18 hours (as per evidence from Mr. Darren Millien).

The final effect is that the resultant agreement failed to comply with certain fundamental requirement of The Companies Act in general and in particular, The Memorandum and Articles of Association of the WICB. Consequently, the agreement is legally flawed. That view has been confirmed in the opinion of both junior and senior legal Counsel which the Committee sought on the point.

On the totality of the evidence both oral and documentary, the Committee is satisfied that the circumstances surrounding the negotiation relating to the sponsorship agreement leaves a great deal to be desired and having regard to all that transpired; the entire procedure adopted undermines public confidence in the WICB and cannot therefore be in the best interest of West Indies cricket as a whole.

* In the next installment, the committee answers the following question: Is the new sponsorship arrangement in the best interest of the WICB and continued cricket development in the West Indies?