By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE $5.5 billion Oban Energies oil refinery project was last night threatened with legal action, with the controversy involving its principals described as a "wake-up call" for the Prime Minister.

Fred Smith QC, the Freeport-based attorney, told Tribune Business he planned to launch a Judicial Review challenge to the project on the basis that the Government was again ignoring the legal planning/approval process and had failed to consult with affected east Grand Bahama residents before approving it.

Mr Smith's threat came as the Government's political opponents sought to exploit The Tribune's revelations that Oban Energies' chief promoter, Peter Krieger, was named as a defendant in two separate lawsuits that alleged he misappropriated investor monies. Bradley Roberts, the former PLP chairman, suggested that Oban and its principals had "fooled" the Government by exploiting Dr Hubert Minnis's inexperience as Prime Minister and his desperation to kick-start economic activity on Grand Bahama.

Mr Roberts said the episode should be a "wake-up call" for Dr Minnis in terms of who his administration did business with, adding: "All the warning flags were there to stay away." Dr Minnis yesterday indicated the Government was aware of Mr Krieger's past troubles, which resulted in the latter settling with US federal regulators before the matter got to trial. The other action, brought by the judicial manager for a sister company of CLICO (Bahamas), the insolvent insurer that denied hundreds of Bahamians access to their life savings, was dismissed on a legal technicality.

The Prime Minister yesterday suggested that the legal actions against Mr Krieger were "not new" to the Government, although he appeared to blame any issues on previous administrations by implying they would have conducted due diligence on Oban Energies' principals to begin negotiations with them.

Mr Roberts, though, said he was "very concerned, very concerned" about The Tribune's revelations concerning key Oban Energies' players, and suggested the group was seeking to obtain a Heads of Agreement with the Government so it could attract energy industry players and investors to support its plans, possibly even 'flipping' it to another buyer.

Besides Mr Krieger, this newspaper found that Satpal Dhunna, the developer's president, was dismissed for "alleged gross misconduct" by a former employer, although he contested the allegations.

The Tribune also uncovered evidence suggesting that the biographies of Mr Dhunna and Russell Erickson, Oban Energies' senior vice-president, over-stated some of their expertise and qualifications, although the former again disputed this.

"The fella heading it, there ain't much substance to him," Mr Roberts said of Mr Krieger. "You exposed that. The team behind him doesn't have much experience. I think their intention is to get the approval from the Government, go out and shop it and sell it to someone.

"Mr [Hubert] Ingraham didn't allow it to happen, Mr Christie didn't allow it to happen. A new Prime Minister came along and gave them the green light. It's unbelievable. Every single guideline of the Foreign Investment Board they ignored. It's unfortunate; very unfortunate."

Mr Roberts said technical studies, such as Environmental Impact Assessments (EIAs), should be done in advance of Heads of Agreement signings with major foreign developers, rather than afterwards as in the case of Oban Energies.

Questioning whether the developer has the necessary financing in place to construct the proposed oil refinery and storage terminal, the former PLP chairman took a dig at the numerous businessmen in the Minnis Cabinet.

"It's unfortunate they could fool an established government with all these smart fellas in it," he told Tribune Business. "It's embarrassing. I hope this is a wake-up call for Dr Minnis. Why would he do business with a fellow like that? All the warning lights were there to stay away. I believe he was under so much pressure to get something going."

The Prime Minister yesterday urged the media and public not to rush to judgment on Mr Krieger, Oban's other principals and the project, suggesting that concerns would be eased when the Heads of Agreement - which should have been tabled in the House of Assembly yesterday - was finally released.

However, the Government's and Oban's difficulties may be mounting after Mr Smith QC, who has fought many successful and protracted environmental-based Judicial Reviews against foreign developers, last night threatened to mount a similar challenge.

"I intend to challenge via Judicial Review this $5.5 billion project that has been signed off on," Mr Smith told Tribune Business. "I appreciate the need for jobs, but more importantly I call on the Government to remember their commitment to developing a 'dream' economy. I don't know why they would wish to destroy a pristine eco-tourism environment in east Grand Bahama.

Mr Smith said the basis of such an action will be the Government's failure to consult "with those affected" before approving the Oban Energies' deal; its failure to follow the legal planning/permitting processes; and "pre-determination and bias" in its decision-making.

"I am very disappointed that despite all the Town Planning cases that both the FNM and PLP have been involved in through Judicial Review, they continue to operate as if the Planning and Subdivisions Act and the Local Government Act don't exist," he added.

"I am disappointed that this administration is devaluing the major role of the Department of Physical Planning. That ought to be the first stop by any developer, Bahamian or foreign, that wants to engage in major development outside the Freeport area.

"As a Freeporter I am even more taken aback that the Government has again secretly, and without consultation, entered into an agreement which will have a drastic environmental and economic impact, whether good or bad, for society and business."

Hitting out once again at "secretive" Heads of Agreement deals between the Government and foreign developers, Mr Smith said: "It baffles me why the executive branch of government, particularly the Office of the Prime Minister, refuses to obey the laws passed by Parliament.

"I'm exhausted by the Government's refusal to abide by the law. I am disappointed that our government continues to give away the Bahamas for baubles and trinkets." He called on the Government to disclose the amount, and type, of tax incentives granted to Oban Energies, and said it was a "slap in the face" to Freeport that the project will not be located there given the city's existing infrastructure to accommodate it.

Other sources, speaking to Tribune Business on condition of anonymity, questioned how the Government "missed" the lawsuits involving Mr Krieger prior to signing the Oban Energies' Heads of Agreement,

"I think it's terrible," one said. "It's laughable, the Government presenting him with this kind of reward. It's embarrassing. They've got to learn some lessons."

Another added: "The Opposition is having a field day with this. This has given Bradley Roberts a new lease on life; he's just exploding all over social media. Hubert Ingraham would never have allowed this."