In October, 2011 ENEE decided to partner with ONYX Services and Solution to build an 18 Megawatt solar electric generation facility on Roatan. We blogged about it here. At the time we noted that the company until six months prior to the contract with ENEE had listed its business as running a network of installed ATM machines, and that at the time ENEE awarded the contract, ONYX Services and Solutions had no solar installations either underway or completed. A strange choice to partner with, right?
An astute reader of our blog just alerted us to the news that on January 27, 2012, the Securities and Exchange Commission of the United States announced it was suspending trading of the company's stock. It stated:
The Commission temporarily suspended trading in the securities of ONYX because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the company’s business projects and prospects.In a press release about the suspension ONYX claimed not to have any communication from the SEC giving any reason for the suspension. So here's what ONYX says about its business and prospects in its latest 10Q filing with the SEC:
The Company derives its revenue from surcharge revenue and inter-exchange revenue. Surcharge fees are added fees which the Company charges the ATM user for dispensing cash. Inter exchange fees are fees charged between banks for transferring money. The Company all of the Surcharge Fees and receives a portion of the Inter exchange fees as income. The Company recognizes the net fees received as revenues.And later:
The Company had total Revenue for the Three Months Ended October 31, 2011 of $2,142. This reflects a decrease of $4,169 or 66% when compared to the total revenue of $6,311 for the Three Months Ended October 31, 2010. This change is primarily attributed to a decrease in the number of transactions on the system.
As of October 31, 2011, we had total current assets of $70,258 and total current liabilities of $481,923 which results in working capital deficit of $411,665.See any mention of solar installations there? There are none. Yet, since November they've been issuing press releases every week, if not several times a week, about how wonderful their solar business is and how its moving forward and they'll be buying 25% of their Chinese partner, Optimum Solar, any day now. With what, one is left to wonder. Did I mention that they only have $7, 298 in actual cash on hand?
That's one ENEE partner.
There's also news about Westport Finance LLC and its emergency power contract for 100 Megawatts. In light of the questions raised about the lack of any visible compliance with the terms of the contract ENEE has with Westport Finance LLC, the head of ENEE, Roberto Martínez Lozano was forced to make public statements that only raised further questions. There's also an investigation underway by the Tribunal Superior de Cuentas and the Public Prosecutor's Anti Corruption office.
Six days ago we found out the ENEE board of directors might not have actually approved the contract before Martinez Lozano sent it on to the Executive Branch for approval. That would be a violation of the Honduran law of government contracting procedures.
Next, three days ago, Martinez Lozano told the press that Westport Finance LLC had not paid the contractually required performance bond of $1.3 million, because of an arrangement he had made with them. What he said was
"We have an arrangement with Westport and Wartsila; they're ready to pay it when we tell them."
ENEE has an arrangement!! Well, then why bother to have a contract when you've just voided the protections it provides the government of Honduras? More soberly, this is also is a violation of the Honduran law of government contracting. If the money is there and waiting, why not have them pay it and comply with the contract? Perhaps it has something to do with what we found out six days ago?
We found out three days ago that ENEE hasn't complied with its part of the contract either. Under the terms of the contract, ENEE is responsible for helping Westport Finance LLC obtain the necessary permits. All of this to be done within 60 days of the contract signing. Yet, that date has come and gone with nothing being done. Roberto Cuellar, head of Secretaria de Recursos Naturales y el Ambiente (Serna), where environmental permits come from, says no application has been filed by anyone.
They haven't done it, nor have they presented any application.In light of all the controversial statements by Martinez Lozano, Congress has called him to testify before them on all of the above on February 15, 2012, and Ricardo Alvarez, head of Lobo Sosa's National Party, has called on Congress to invalidate the contract.
Incompetence? Corruption? Any way you look at it, there's sure to be more information coming out on ENEE and both of its partners here.