Net News pension charges dismissed

Publisher Desmond Seales was “a larger than life character,” attorney says 

Charges against Cayman Net Ltd., the company that published Cayman Net News, were dismissed in Summary Court this week because the company no longer exists.  

Cayman Net Ltd., of which the late Desmond Seales was sole director and shareholder, had been before the court since June 2010 on charges of failing without reasonable cause to contribute to a pension plan for employees and failing to pay arrears contributions within the time given. 

Mr. Seales, who was not named as a defendant, was the publisher of Cayman Net News. He died in July 2010. The newspaper and website continued, although the last online articles were dated Dec. 25, 2013.  

Attorney Clyde Allen had previously indicated that the company was no longer operational and Mr. Seales’s widow, as administrator for the estate, was in the process of having it dissolved. 

On Tuesday, Mr. Allen presented the court with a copy of the search report from the Companies Registry. “It essentially states that the status of the company is that it has been struck off by the Registrar,” he explained. The document was dated March 31, 2014, “so as of that date, this entity, in legal terms, does not exist,” Mr. Allen said. 

Crown Counsel Kenneth Ferguson accepted that the matter could no longer proceed. 

He said this was unfortunate for the ex-employees, who will now have to try to get their redress in the civil courts. 

“It is very unfortunate and one of the consequences of companies operating in the Cayman Islands without honoring their obligations under the Pensions Law, which requires them to pay statutory contributions in respect of their employees,” Mr. Ferguson said. 

Mr. Allen described Mr. Seales, who died in July 2010, as a larger than life character, “who almost single-handedly kept that company going. With his death, many of his ideas and energy were lost.” 

He agreed it was unfortunate that some of the employees were now in a position where they have suffered a loss, but the company simply could not pay its debts. It could not continue to operate – hence the application to remove it from the Companies Register, he said. 

“What step others take to recoup their debt – that is a matter for them,” Mr. Allen concluded. 

The charges against Cayman Net Ltd. did not specify amounts owed or the number of employees affected. The time periods listed were August 2007 to January 2008; October 2008 to March 2009; May 2009 to February 2010.  

Magistrate Grace Donalds asked Mr. Ferguson whether he was applying for the charges to be withdrawn or dismissed. 

Mr. Ferguson replied that having them withdrawn could suggest that they had not been properly drawn to begin with; he therefore asked that the charges be dismissed. The magistrate did so, bringing the matter to its conclusion. 


Mr. Seales

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  1. As one of those involved I think this rather sorry saga raises some serious questions about the way the Pensions Law has been administered in the past.

    In my case the matter was settled and all my contributions were refunded to me shortly after I returned to the UK but others have clearly not been so fortunate.

    Net News had a history of defaulting on pension contributions that went back long before I joined the company in 2006. Despite this, in 2008 when I reported non-payment to the NPO they chose to negotiate a settlement rather than commence enforcement action. That simply seems to have created a situation in which people like myself, who had complained, got a settlement while the silent majority lost out.

    At the time this was not just happening at Net News, my partner went through exactly the same experience with another employer – she got it settled but most of the rest of the staff lost out.

    The harsh reality is that in 2008, despite determined efforts by Mr Seales to keep his companies afloat, Net News and the businesses associated with it were already insolvent and entering a debt spiral that was out of control. Some very simple due diligence would have shown that there was little realistic prospect of recovering the unpaid contributions and the longer this was allowed to drag out the more money people were going to lose.

    In these circumstances it seems strange that the NPO chose a compromise solution that they must have realised was unlikely to succeed. In fairness to the NPO staff involved I will concede that Desmond was never a person you wanted to tackle head on if it was avoidable but that is after all what they get paid for.

    I can actually make a direct comparison between the work of the NPO and my own employment in the UK civil service 35 years ago. Our clear up time was normally measured in months, mostly without having to go to court, and to that read this has dragged on for some six years is rather disturbing.

    I wonder if the people who lost out here have a case to seek compensation from CIG?