Barita-Cornerstone saga spawns more cases
Published:Sunday | August 13, 2023 | 12:13 AMJovan Johnson - Senior Staff Reporter
Rita Humphries-Lewin’s dementia had so worsened up to January 2023 that the 87-year-old respected Jamaican businesswoman reportedly could not even recall the word ‘Barita’ – the name of the investment company she established more than four decades ago.
Those details are contained in documents her husband, Karl Lewin, filed in court, seeking to have him and two of her nephews appointed legal guardians and managers of her affairs.
“Notwithstanding the use of medication, she grew progressively worse, and her memory further deteriorated between 2016 and 2019. She continued to forget names, dates and core memories about her life and our marriage,” Karl said in an affidavit dated June 12 and filed in the Supreme Court a day later.
He said that his wife’s forgetfulness became “more frequent and pronounced” and “she would sometimes have difficulty maintaining a conversation; she would ask the name of persons she had interactions with moments after they left. She would also forget recent events”.
FIRST CASE
The application comes amid a separate case in which private investment firm Cornerstone and its two top executives – CEO and founder Paul Simpson and Chief Investment Officer Jason Chambers – have asked the Supreme Court to declare that a 2021 transaction involving Humphries-Lewin was legal.
They sought the court’s intervention following accusations by Humphries-Lewin’s niece, Deborah Mordecai Edwards, that the Cornerstone team used fraud and deceit to get her aunt to sell J$2 billion (US$15 million) worth of shares in Barita to buy Cornerstone stocks.
Cornerstone, Simpson and Chambers have rejected the allegations.
Humphries-Lewin sold Barita Investments Limited to Cornerstone in a $3-billion deal in 2018. She maintained a significant minority stake.
In 2021, she sold some of her Barita stocks to pay for 1.4 million shares in Cornerstone at US$10.80 per unit through a private offer.
The Financial Investigations Division (FID) says there may be “some merit” to a claim that Humphries-Lewin was pressured to spend $2 billion to buy the shares and that her signature was forged. But just over a week ago, the FID’s principal director, Keith Darien, said the agency was “nowhere near the stage of saying that the allegations are valid and whether anyone will be charged criminally”.
Mordecai Edwards claims that her aunt did not have a lawyer and that Cornerstone took advantage of the elderly woman because around the same time as the deal, it sold shares at a far lower price of US$1.40.
But Cornerstone has rejected those claims, arguing that the lower price was made to existing shareholders in a separate and unrelated transaction.
Cornerstone and its executives have also said they were not aware that Humphries-Lewin was diagnosed with dementia in 2019 and that she appeared sound throughout the negotiations.
“They (the allegations) impugn our character, given that they raise questions as to our honesty, which will be of concern to a regulator,” Simpson said.
Humphries-Lewin’s financial advisor Sonia Owens, who recommended the 2021 investment, said Humphries-Lewin showed no signs of being unwell during the talks.
SECOND CASE
The 86-year-old Karl, who is now asking the court’s permission to be legally responsible for his wife’s affairs, was reportedly party to the investments discussions and agreement throughout 2021.
There is no evidence so far to suggest that he revealed the dementia diagnosis and associated medical reports he has now submitted in the application for guardianship.
The retired financial management consultant said his wife has been having memory problems since at least 2016 and would “occasionally” forget a name or had difficulty recalling places visited during their now 31 years of marriage.
Following a recommendation from their local family physician, in January 2019, Humphries-Lewin was taken to the United States, where she underwent a neuropsychological evaluation at the Design Neuroscience Centre in Miami, Florida.
Humphries-Lewin was diagnosed with “mild neurocognitive disorder due to [possible] Alzheimer’s disease”, according to the medical report prepared by Dr Christina C. Santiago, and obtained by The Sunday Gleaner.
It said persons with similar profiles tend to experience early onset memory impairment “with notable difficulty in the consolidation and recognition of information leading to reduced abilities to learn over time”.
Since the diagnosis, Karl continued, there have been several family meetings to decide on how to manage the matriarch’s affairs, and in March, it was agreed that a committee should be appointed.
In preparation for the court application, Humphries-Lewin was taken for a local assessment because since the 2019 diagnosis, her condition has “gotten progressively worse”. The evaluation was performed by Dr Michele Lee Lambert, a consultant neurologist.
Lee Lambert noted that Humphries-Lewin could not recall basic and personal information, including the name of her former company Barita, when she got married, or the name of the current prime minister of Jamaica.
Humphries-Lewin’s history and examination is “consistent with middle-stage or moderate Alzheimer’s disease”, said the neurologist, who is certified by the American Board of Psychiatry and Neurology. “Due to the patient’s cognitive impairment, she is not able to take care of her financial affairs.”
Alzheimer’s disease is the most common type of dementia, according to the US Centers for Disease Control and Prevention. It is a progressive disease beginning with mild memory loss and possibly leading to loss of the ability to carry on a conversation and respond to the environment.
Karl also did a medical assessment. In a May 2 report, the doctor stated that his mental status is “normal” and that he is a “clinically fit elderly male whose chronic medical conditions are well controlled”.
He said that he has known Humphries-Lewin’s nephews, who are proposed to be part of the committee, for more than 35 years and that they have grown into “independent, self-sufficient, and upstanding gentlemen”.
“I have no interest adverse to Rita and will undertake to manage her affairs in a manner beneficial to her. I am financially independent and have no pecuniary interest in the assets owned by Rita,” he said, noting that he earns from dividends in various investments, pensions and savings.
THIRD CASE
In yet another case, Barita, which is now controlled by Cornerstone, has applied to the Supreme Court for a declaration as to whether it should accept instructions from Karl or Mordecai Edwards in relation to Humphries-Lewin’s accounts and investments held at the firm.
Humphries-Lewin is the sole signatory on those accounts, noted documents filed on May 18.
Barita’s action was triggered by two requests from Mordecai Edwards. In the first, she reportedly instructed Barita in a May 13, 2023 email to pay approximately US$24,000 to cover legal fees allegedly incurred on Humphries-Lewin’s behalf.
In another email sent on April 16, Barita said Mordecai Edwards requested “certain information” on Humphries-Lewin’s accounts and investments.
Barita said Mordecai Edwards claimed that she was acting on a power of attorney given to her in August 2022 by her aunt.
But the firm said that it needs the court’s direction because Mordecai Edwards “alleged that Humphries-Lewin has a ‘dementia diagnosis’ since 2019 and is therefore not mentally competent”.
“There may therefore be a real risk that instructions received from the respondents in respect of Humphries-Lewin’s assets held with Barita are not properly authorised and in complying with those instructions, Barita may be exposed to liability,” noted the affidavit signed by Barita’s director Phillip Lee.
It is not the first time that Cornerstone or any of its affiliates have raised questions about the actions of Mordecai Edwards, a US-based attorney and chairman of BPM Financial Limited, a competitor of Barita in the securities and investment sector.
In a March 31, 2022 letter to the Bank of Jamaica and which the FID and Financial Services Commission also received, Mordecai Edwards demanded an investigation of the 2021 transactions involving her aunt.
She accused Cornerstone of “the intentional targeting of Rita Humphries-Lewin in a transaction which was clearly designed to exploit her”.
Cornerstone, in a December 2022 response to an October 2022 letter from Mordecai Edwards, said it noted “curiously” that her March missive fell between two letters from Sagicor Investments Limited to Cornerstone United Holdings Jamaica.
Sagicor Investments, a shareholder in Cornerstone, wrote in February and April 2022 demanding “transparency” over the 2021 transactions involving Humphries-Lewin. Cornerstone said the April letter has “strikingly similar allegations” to Mordecai Edwards’.
Cornerstone further noted that Mordecai Edwards’ letter included a claim for money, which it wondered if it was to unwind the 2021 transaction or seek a repurchase of Humphries-Lewin’s shares.
“Edwards appears to have used the threat of a fraud report to the FID, et al, to attempt enforcement of the payment by Cornerstone to her of US$20,021,708.57 plus US$350,000 in costs by way of ‘monetary settlement only’,” read a copy of Cornerstone’s response which accompanied Paul Simpson’s affidavit to the Supreme Court.
The letter added: “The ‘menace’ of the threatened report to or discussion with the FID could, in fact, be viewed as extortionate of Cornerstone and its officers.”
Cornerstone said if it turns out that Mordecai Edwards manipulated and misused regulatory or criminal processes to pursue a commercial claim using her aunt’s alleged situation, then it would take legal action and report her conduct in any jurisdiction to which she is connected.
The 2021 Cornerstone-Barita transaction resulted in Humphries-Lewin’s Barita holdings falling from 53.5 million shares to 26.3 million shares. She now has a two per cent stake in her former company, down from almost five per cent.