Gwich'in green energy company in Inuvik focus of lawsuit filed in N.W.T. Supreme Court
Nihtat Gwich’in say company was created and operated without any oversight from board members
Leaders of the Nihtat Gwich'in Council of Inuvik are alleging a former chair and a key official made secret business deals that benefited them personally at the expense of the Nihtat Gwich'in.
In a lawsuit filed in N.W.T. Supreme Court, the Nihtat Gwich'in say that Jozef Carnogursky, then president of the council, and Grant Sullivan created Nihtat Energy without telling the Nihtat board of directors.
Nihtat Energy Ltd. was registered as a company on the territory's corporate registry on Sept. 24, 2019. Carnogursky and Sullivan were listed as the directors.
The lawsuit alleges that Carnogursky and Sullivan arranged to have the new company take over all of the Nihtat Corporation's energy projects and energy grants, and gave Sullivan the option of purchasing the majority of shares in the company.
Carnogursky's lawyer says Nihtat Energy was created to foster growth and sustainability for Inuvik, and it has done that.
"While there are ongoing legal proceedings concerning this matter, it is not clear what the factual basis is for involving Mr. Carnogursky," wrote Toby Kruger in an email. "We are not aware of any wrongdoing."
In an email, Sullivan's lawyer, Alyssa Holland, says Nihtat Energy has been a success under Sullivan's leadership, having built solar and biomass installations in the region, including a one megawatt solar farm in Inuvik.
"The statement of claim makes baseless allegations about the creation and operation of NEL, none of which have been proven in court and all of which Grant disputes," wrote Holland.
Directors kept in the dark: Nihtat Council
Neither Sullivan nor Carnogursky have filed statements of defence in the lawsuit. In a separate case, Sullivan is asking the court to order the Nihtat Gwich'in council to honour a shareholders agreement that stipulates any disputes over the agreement will be settled by an arbitrator.
In an affidavit filed in the case, Nihtat Gwich'in Council president Kelly McLeod said he's had difficulty getting information about Nihtat Energy from Sullivan.
"When Sullivan did provide records (in response to my requests) his responses were incomplete and often required me to repeat my requests or ask clarifying questions," said McLeod. "The Nihtat Gwich'in Council and Nihtat Corporation still hold serious concerns over how so much of Nihtat Corporation's resources were devoted to NEL without any benefit given back."
In its lawsuit the Nihtat Gwich'in say the Nihtat directors other than Carnogursky also did not know about an agreement Carnogusky signed on behalf of the Nihtat Corporation transferring all of its energy projects to the new company along with $217,800 in exchange for shares in it.
Three of the people who were directors of the Nihtat Gwich'in Council at that time and in the following years filed affidavits in support of the Nihtat Gwich'in lawsuit.
In almost identical sworn statements signed on Oct. 22, Barry Greenland, Sallie Ross and Richard Ross say they understood they were never advised of the creation of the company, don't recall receiving any updates, and were never told that Sullivan had an ownership interest in the company.
"I recall Carnogursky providing small updates on energy projects from time to time, projects I understood to be associated with the Nihtat Corporation and for the benefit of the Nihtat Gwich'in," they said.
The case is scheduled to be in court on Feb. 25, 2025.