J&P (Overseas) Ltd board member Leonie Paraskevaides-Mavronikola reassured staff of the company on Friday that she would not rest until she found out how the construction giant accumulated the US$750m deficit that led to its demise.
In a letter addressed to the staff working on projects of the company in Saudi Arabia Paraskevaides-Mavronikola said she wanted to set the record straight concerning claims of her business partners, the Joannou family that this mess was her family’s fault.
She said she wanted to give an account of events in honour of her late father Giorgos Paraskevaides, who founded J&P with the also late Stelios Ioannou.
Paraskevaides-Mavronikola was appointed, along with her brother, Efthyvoulos Paraskevaides to the board of directors of J&P Overseas last July when the company was facing serious problems in a bid to avoid a demerger and to improve the company’s financial situation. The siblings were appointed as board members following the removal of CEO Andreas Papathomas – their sister’s partner – who was considered by them as the problem.
Since her father’s death in 2007 until July, she said, she had no active role in J&P Overseas and had no access to information or audited accounts of the company.
After the removal of Papathomas, she said, she was initially informed that the 2017 accounts had recorded a loss of $7m, while a few days later she was told the actual loss for the same year was about $750m “and that the company is actually insolvent with its obligations exceeding its assets by about $500m.”
The period between 2012 and 2018 was “marred by continuous frictions, disagreements and deadlocks that led to the devastating decision of the demerger in July 2016, the starting point of today’s collapse of the company,” the letter said.
A study commissioned in 2015, she said, found the company’s CEO at the time and his team “did not have the necessary experience and knowledge of the important roles assigned to them”.
The study also warned that if they did not implement a series of urgent and necessary corrective measures, it would soon collapse.
“Surprisingly, and from what I understand, no substantive decision was taken and no action was taken by the directors,” Paraskevaides-Mavronikola said. She added that the recommendations of the study of the independent advisers remained on paper alone for almost three years until the collapse.
During the four months she was a board member of the company, she said, “I found a number of acts and omissions which, in my opinion, partly led to the decision of the Guernsey courts on October 24, 2018 to liquidate our company J&P Overseas Ltd and the appointment of Alvarez and Marsal as liquidators.”
Paraskevaides-Mavronikola said that she has yet to receive a satisfactory explanation for the reasons and circumstances that led to the revision of the original loss for 2017 to $750m or why the accounts submitted for audit to the external auditors did not include this loss that has now put the company in liquidation.
She pledged to continue to demand answers and explanations in whatever way she feels most appropriate.
She also said she was optimistic that employees would get their wages as soon as possible.