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The liquidator of collapsed contracting business Joannou & Paraskevaides (Overseas), which owned stakes in a range of contracting businesses across the Middle East, has agreed sales of interests in companies in the UAE and Qatar, but its beleaguered Saudi Arabian arm which owed hundreds of millions of riyals to its workers is now being wound up.
Joannou & Paraskevaides (J&P) (Overseas) was placed into liquidation in November after the business “faced significant liquidity issues and was cash flow insolvent”, liquidators Alvarez & Marsal told Zawya in November. (Read more here).
The company's operations were hampered due to a dispute between the founding Joannou and Paraskevaides families, according to a Forbes story in November last year. J&P (Overseas) employed 957 people directly, all of whom were laid off, but its subsidiaries employed more 16,000, the liquidators said.
Avax SA, a company controlled by the Joannou family (formerly known as J&P-Avax SA), agreed deals with liquidators earlier this month to buy subsidiaries in Qatar and Abu Dhabi, as well as MEP contractor Conspel’s operations in Qatar, Abu Dhabi, Greece and the UK. It has also taken a majority stake in the joint venture company building the Qatar Foundation stadium - one of the stadiums being built for the Fifa 2022 World Cup.
Avax, which is listed on the Athens stock exchange, said that the assets were being acquired by a newly-created venture known as Avax Middle East. The liquidator declined to comment.
A note sent to group employees seen by Zawya also states that a sale & purchase agreement is in place between liquidators and Avax Middle East to acquire another two UAE companies and a subsidiary in Oman. Avax did not respond to requests from Zawya to comment.
The note to employees said that “a plan is in place for the new group of companies to come out of the difficult situation they are currently in as a result of the protracted liquidation process, for which we will have the support of the new shareholder as well as of our clients and other stakeholders”.
However, the arm of J&P (Overseas) operating in Saudi Arabia, which is understood to have been run by the Paraskevaides family, saw liquidators appointed last month.
A translated version of a court ruling seen by Zawya stated that liquidators were appointed to the Saudi business, in which two Saudi nationals shared a majority stake, with J&P (Overseas) holding a minority share, last month.
Representatives who sought liquidation of the Saudi company said the company had been run by its foreign management, which was “the sole and authorised party to contract with others” and to operate bank accounts.
In the court filing, representatives seeking liquidation said the company’s activities were “permanently suspended due to the absence of executive directors”, which had caused problems to mount at the firm, meaning that partners and thousands of employees were left unpaid.
It said more than 300 lawsuits had been filed against the company, and that suppliers were owed more than 600 million riyals. Between the middle of 2018 and the end of the first quarter of 2019, the level of unpaid salaries to employees reached more than 130 million riyals, it added.
More than 80 commercial petitions against J&P’s Saudi Arabian arm were filed in the courts, alongside 191 lawsuits from workers. The petition to the court also sought liquidation because it said the company was in a state of “chaos and instability”, and the lack of local management had led to some employees to seize company assets such as equipment which they then sold “unlawfully”.
One former employee, who spoke to Zawya on condition of anonymity, said that delays to his salary began in January 2018, and by April 2018 payments stopped completely. He received no pay between April 2018 and May 2019, and has not received any end-of-service payments. He has only recently been repatriated to his home country with the help of his embassy.
The employee said that since October 2018 when administrators were first appointed to J&P (Overseas), employees of the Saudi business “were kept waiting in filthy camps”, and sold company scrap in order to buy food to survive.
“Many affected workers gave their whole life to the company, right from 1976 when it was established in Saudi Arabia,” the employee said in emailed comments to Zawya. “No one bothered to give justice for our pending dues.”
J&P (Overseas) was set up in Guernsey in 1961 by the founders of Cyprus-ased Joannou and Paraskevaides Group. Its first contract began in Libya in the same year, with the company eventually spreading operations across the Middle East. Major Middle East projects completed by the group include the construction of Dhahran Airport and the Riyadh’s ITCC complex in Saudi Arabia, Abu Dhabi’s Yas Island hotel complex and the Dubai-Fujairah Freeway in the UAE, and the Qatar Foundation stadium and Al Wakra Hospital in Qatar.
(Reporting by Michael Fahy; Editing by Anoop Menon)
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© ZAWYA 2019
