Det'on Cho sued for $100,000
Bassett Petroleum one of 'many' Yk companies waiting to be paid, says MLA
Randi Beers
Northern News Services
Published Wednesday, October 8, 2014
SOMBA K'E/YELLOWKNIFE
Bassett Petroleum Distributors Ltd. is suing Det'on Cho Construction Ltd. for $97,263 plus interest, claiming the Yellowknives Dene-owned company owes for unpaid fuel deliveries.
The statement of claim, filed Aug. 5 in NWT Supreme Court, alleges Det'on Cho had amassed close to $100,000 in unpaid fuel bills by July 2014. The petroleum distributor is seeking the amount owed plus two per cent compound interest per month.
According to Range Lake MLA Darryl Dolynny, Bassett Petroleum is only one of several Yellowknife businesses asking Det'on Cho to pay its bills. He says other subcontractors have come to him with complaints that the construction firm isn't paying for work on the Ingraham Trail realignment project.
"I'm concerned that if subcontractors aren't getting paid, it's not a good way to end the project," said Dolynny.
One Yellowknife subcontractor - who asked to remain anonymous - confirmed his business has been waiting nine months for Det'on Cho to pay for work done last winter.
He said he's asked the territorial government to step in and help Det'on Cho take care of these unpaid bills, but he hasn't received a response.
Roy Erasmus Jr., CEO of Det'on Cho, declined to comment on what he called private dealings between his company and its partners.
Det'on Cho won the $16-million contract to build a five-kilometer bypass around Giant Mine at Highway 4 and reconnect with the Ingraham Trail in 2012.
The Department of Transportation didn't go through a bidding process, opting to follow its negotiated contracts policy instead. The policy is intended to give opportunities to local businesses that might not be in a position to competitively bid against the larger southern companies.
After receiving the contract, Det'on Cho issued a news release announcing the "negotiated contract has already injected millions into the local economy. Det'on Cho has already spent $10 million - all spent locally - to purchase equipment for the Ingraham Trail realignment project."
The bypass opened this spring, but Det'on Cho is still doing roadwork on it.
Jack Rowe, owner and operator of Rowe's Construction, said his company is helping Det'on Cho finish chip sealing along the Ingraham Trail near the Baker Creek bridge.
"Like any major project, this one has had its challenges, but we're working with Det'on Cho to complete the realignment project," he said.
Both Erasmus and Rowe estimate roadwork should be complete by the end of this month.
Yellowknives Dene First Nation released its 2013 financial statements to the public late last month and while the First Nation itself appears to be financially healthy, Det'on Cho Corporation appears to be struggling.
Det'on Cho Corporation is the financial arm of Yellowknives First Nation and Det'on Cho Construction Ltd. is a subsidiary of the corporation.
Det'on Cho showed net losses of $3.3 million over the last fiscal year and reported $156,127 in unpaid rent and leases in during the same period. Financial statements also show Yellowknives Dene First Nation has put itself on the line to bail Det'on Cho-owned Bouwa Whee Catering Ltd. out of a $1.7 million loan with First Nations Bank of Canada. Bouwa Whee Catering provides food delivery services to NWT mines and runs the Smokehouse Cafe in Ndilo.
Erasmus Jr. confirmed the company has had a tough year.
"We have had to make some changes to our organization and we have tightened up a bit and we have improved our businesses as well," he said.
He wouldn't go into detail about internal changes the business has made.
Det'on Cho Corporation was named business of the year by the Yellowknife Chamber of Commerce in 2013.
Crowe Mackay LLP put together the financial statements for the band but a statement in the auditor's report said it can't guarantee numbers related to Det'on Cho are "free from material misstatement" because some subsidiary companies to Det'on Cho have not been audited.
Erasmus said some of Det'on Cho's subsidiaries are so small the cost of having them audited would be "prohibitive."
The Yellowknives submitted these documents to the Department of Aboriginal Affairs and Northern Development in September to comply with the First Nations Financial Transparency Act.
The act requires registered First Nations across Canada to release consolidated financial statements and schedules of remuneration for chiefs and band council to the department where they are posted for the public.
The Yellowknives First Nation reported a surplus of more than $8.2 million in the last fiscal year and reported salaries of $116,000 for Dettah chief Edward Sangris and $86,308 for Ndilo chief Ernest Betsina for a nine-month period.
Sangris also claimed $15,101 in travel expenses, while Betsina spent $6,981 of band money on travel.
