The Securities and Exchange Commission charged yesterday that Page Airways Inc. and its top officers made more than $2.5 million worth of illegal payments to foreign officials, including a Cadillac Eldorado to President Idi Amin of Uganda.
The payments, the SEC said, were made in connection with the sale of jet aircraft to Asian and African governments.Page, a Rochester, N.Y. firm, is the world-wide distributor of the Gulfstream III executive jet made by Grumman Corp.
According to the suit, filed in U.S. District Court here, Page concealed the payments by making "false, incomplete and misleading entries" in its books. In addition, the SEC charged, Page hid all of its sizable business operations in Uganda from its stockholders.
Page stock is traded on the over-the-counter-market.
In a press release, Page declared it would fight the SEC civil action: "Our denials of the allegations in the complaint, which allegations have no merit, will be made in court; our defense will be made in court, and our vindication will take place in court."
In addition to the company, the SEC suit named James P. Wilmot, chairman and chief executive officer of the company and owner of 49.3 percent of the stock.
Also named were his brother, Gerald G. Wilmot, company president who owns 14.76 percent of its stock, Douglas W. Juston, executive vice president; Ross C. Chapin and T. Richard Olney, vice presidents, and James P. Lawler, chief financial officer.
The SEC said that Page had sales of $251 million between 1971 and 1976. During that period, the commission alleged, questionable payments "were made in connection with over $60 million" of those sales.
In the complaint, the SEC described the following transactions between Page and foreign officials:
In connection with a 1972 sale of a $4.8 million Gulfstream II to the Republic of Gabon, $200,000 allegedly was paid to Albert Bongo, president of Gabon. The suit says that Lawler made an entry in Page's books "falsely indicating" that the $200,000 was a discount.
In 1972 and 1973, two Gulfstream II aircraft were sold to the stae government of Sabah, Malaysia. Between 1972 and 1976, the SEC charged that $900,000 was paid to a company called Gaya House Sendirian Berhad controlled by Datuk Harris bin Mohammed Salleh, who was state minister of industrial development and in 1976 became chief minister of Sabah. The payments allegedly were made through Thunderball Shipping and Trading Ltd. in Hong Kong, and Datuk Harris is chairman of both concerns, the SEC said.
Page sold two aircraft and spare parts to the Republic of Ivory Coast between 1972 and 1976. The SEC alleges that about $412,000 was paid by the company to an account in an unnamed Washington bank in the name of Societe Ivorienne de Development et de Financement (SIDF). The SEC said that the Ivory Coast ambassador to the United States, Timothee Ahoua, "was and is secretary of SIDF." Yesterday, the embassy here said the ambassador was out of the country.
In connection with the sale of four Gulfstream II jets to Saudi International Airlines and one to Morocco between 1975 and 1977, the SEC said the company "utilized foreign entities as conduits for the payments of funds to third parties" to disguise the recipients and the amounts. "This conduct has, among other things, left over $5 million of the proceeds of Gulfstream II sales unaccounted for," the SEC said.
The SEC also alleges that some of the defendants made false statements to the Export-Import Bank to secure financing for some of these sales.
The SEC said Page stockholders were never told that beginning in 1975 and continuing to the present the company has sold more than $15 million worth of goods and services, including a cargo plane, to the dictatorship of Uganda, and set up a subsidiary in that country.
Moreover, the SEC said that Page receives "substantial amounts of cash" from Uganda, but it added: "The receipts and disbursement of these funds are not recorded in the books and records of Page."
An article in the April 9 issue of The York Times Magazine said that President Amin made Page's sales representative "an honorary Ugandan citizen and appointed him his personal reprsentative in the U.S. with the rank of honorary consul at large."
The SEC complaint noted with amplification that "Page gave and delivered to [Amin] a Cadillac Eldorado convertible automobile."
The SEC asked the District Court to enjoin the defendants from continuing their alleged violations of federal securities laws and of the accounting provisions of the Foreign Corrupt Practices Act of 1977.
The commission also asked the court to appoint a special officer "to inquire into and examine the books and records of Page."