Author: ChrisRam

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Playing with money laundering and terrorism legislation

Introduction
Guyana joined the Caribbean Financial Action Task Force (CFATF) in 2002, twelve years after it was established in May 1990. The CFATF is an associate member of the Financial Action Task Force (FATF), the international body established in 1989 charged with examining countries’ money laundering techniques and trends, reviewing the actions which they had already taken, and setting out the measures that still needed to be taken to combat money laundering. Following the terrorist attacks of September 11, 2001, the FATF added terrorist financing to its mandate.

By 2002, Guyana had already passed the Money Laundering (Prevention) Act 2000 which granted to the Minister of Finance the discretion to appoint the Bank of Guyana or some fit and proper person as the Supervisory Authority for the Act. Favouring the latter course, some time in 2005 the Minister of Finance handpicked Mr Paul Geer to head a Financial Intelligence Unit located in the Ministry of Finance. Mr Geer’s experience included five years as head of the Guyana Bank of Trade and Industry, which he left abruptly – officially for personal reasons ‒ in a golden parachute and after a meeting of the bank’s Board of Directors.

Despite the allocation by the National Assembly for the FIU of more than two hundred and seventy-five million dollars since Mr Geer took up the position, the unit has had virtually no success in pursuing even the limited objectives of the 2000 Act. Not surprisingly then, Guyana’s reputation as a prosecutor of money-laundering has no gloss. Some have blamed the deficiencies of the Act but Mr Geer did not help the government’s case by his unavailability to meet the press or unwillingness to answer questions about the FIU.

Following some critical reviews of the by then limited 2000 Act and the country’s anti-money laundering efforts, the government introduced the Anti-Money Laundering and Countering the Finance of Terrorism Bill on June 4, 2007. After nearly two years and fifteen sittings of a Select Committee the National Assembly on April 30, 2009 passed the Bill. Reinforcing the perception that he was never serious about pursuing crime and its proceeds, then President Jagdeo took one hundred and seven days before he assented to the Bill on August 14, 2009. And then it took another 87 days before the publication of Order # 22 of 2009 to bring the Act into force.

The later Act was equally poorly administered prompting President Jagdeo some time in 2011 to publicly castigate the unit for its inability to meet even basic annual reporting obligations to the National Assembly. Put bluntly, the FIU of the 2009 Act and its predecessor Supervisory Authority under the 2000 Act have been disastrous failures, so much so that we probably could have done without them, without noticing their absence.

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‘Plain Talk’ angered some top leaders of Private Sector Commission

Last week’s Plain Talk so angered some top leaders of the Private Sector Commission (PSC) that they began a buzz with email exchanges describing that programme and another on Channel 9 as constituting a “blistering attack” and “serious attempt to discredit the PSC.” It exhorted the troops, so far embarrassingly unsuccessfully, “to act.” Yet, amidst all this vituperation, one of the chief protagonists admitted to me by email that he had not seen the programme or knew its topic.

The topic of Plain Talk was ‘Budget 2013 – an Epilogue’ with Raymond Gaskin. During the hour long programme, the focus of which was an 11-point letter by Messrs David Granger and Khemraj Ramjattan to President Ramotar a few days prior to the 2013 Budget, Mr Gaskin, while defending the private sector in its wider sense named Messrs Dookhoo, Urling, Webster and Gouveia as individuals who collectively do not come as “a neutral professional private sector body,” but as “the government’s friends”; “persons with whom the government is comfortable.” Mr Gaskin also named and compared Mr Carville Duncan with former Ethnic Relations Commission Chairman-turned-government minister Mr Juan Edghill, whom Gaskin described as having always been a Civic in civil cloth.

Fortunately, the private sector is bigger, more diverse, measured, balanced and independent than the PSC and those at its helm. Unfortunately, by their silence the wider membership does nothing to help the PSC regain the authority and independence it lost when Mr Mike Correia clammed up after Dr4 Jagdeo embarrassed him at a GuyExpo opening a few years ago.

This Sunday I will give the PSC leaders another opportunity to look at the programme by having it rebroadcast on WRHM Channel 7.

The leaders can then make a reasoned assessment whether they may have over-reacted and whether Mr Gaskin’s opinion of them has any merit, or is shared by the public.

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On the Line: 2012 Annual reports of Caribbean Container Incorporated, Sterling Products Limited and Guyana Stockfeeds Incorporated

Introduction
To avoid getting caught up in a backlog of annual reports, Business Page today reviews the annual reports of three of Guyana’s public companies – Sterling Products Limited which held its annual general meeting on April 19, Caribbean Container Incorporated (CCI) which held its annual general meeting on April 30 and Guyana Stockfeeds Limited whose AGM is scheduled for May 23. It is perhaps co-incidental that these companies have some striking similarities: they are all public companies but with a dominant shareholder, and none is among the big league of Guyana’s public companies. Indeed CCI accounts for 1.02% of the market capitalisation of the top ten public companies, Stockfeeds 1.07% and Sterling Products 1.12%. Cumulatively the three companies account for less than 3.25% of the market capitalisation of the top ten companies.

In their annual reports, each of the three companies reported better results in 2012 than in 2011, a trend among all public companies. Stockfeeds reported an increase in year-on-year profit after tax of 3.2% while Sterling declared an increase in after tax profit of 39.3%. CCI appears to have transformed a loss into a profit but this is almost entirely attributable to a reduction in book entry depreciation because of a change in the estimated useful life of assets.

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Response to Sundar Nauth

In yesterday’s online edition of your newspapers (KN, 3 May) you carried a letter subscribed by Sundar Nauth and captioned “Sanction Christopher Ram”. I wish to respond by advising Mr. Nauth that the process of sanctioning a member of the Institute of Chartered Accountants of Guyana can be initiated by a letter setting out the grounds of the complaint and addressed to the Secretary of the Institute, 47, Main Street, 2nd Floor, GCIS Building, Georgetown.

And what is the complaint? It is that he was moved by a letter engineered by Winston Brassington and Bharrat Dindyal, Chairman and CEO respectively of Guyana Power & Light Inc. responding to my letter in the Stabroek News of April 24, 2012. In that letter I expressed concerns about billions of dollars being given to GPL, the mismanagement of the company, and the financial straits in which the management has placed the company. I concluded by suggesting that the granting of further transfers by the National Assembly to GPL should be conditional on the “firing of the company’s Board and their replacement by competent individuals.”

And here was the Brassington-Dindyal bogey: that I used confidential information to which Ram & McRae was privy some ten years earlier when we were the company’s auditors.

If Sundar Nauth had acted less as a surrogate and mouthpiece for the Brassington-Dindyal duo, he would have realised that my letter referred to public information contained in the National Estimates, the company’s annual report for 2010 and the print media. And if he was diligent he would notice that the earliest information I quoted was from 2010!

I wish Sundar Nauth the best of luck as he seeks to have me sanctioned. Should he require any further professional or legal assistance in the process, I would be very pleased to assist him. Without charge!

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The challenge of ethical investing

Introduction
Following this column’s review of the 2012 Annual Report on the Demerara Tobacco Company Limited in which I stated that I am a small shareholder (500 shares) in the company, a colleague of mine criticised me for profiting from a company whose product is now known to be a killer. I explained to him that the reason for the shareholding is to ensure that I receive the annual report of the company and have the right to attend company meetings. Similarly, for as long as I can remember I have had shares in DDL and Banks DIH Limited despite the fact that I believe there are personal, economic and social consequences for those who engage in excessive use of rum, which is their principal product. After careful consideration and with some regret at my belated decision, I wrote in my review of DDL’s 2012 Annual Report that I would be disposing of my small shareholding in that company, except for a few to allow me to receive the company’s annual reports. My action stems from my conviction that there is such a concept of ethical investing.

Ethical investing or, as it is sometimes referred to, socially responsible investing, has been gaining popularity as individuals seek to align their investments with their personal views, whether they are based on environmental, religious or political precepts. Essentially it comes down to this: should a vegetarian invest whether directly or indirectly in a company that owns and operates abattoirs, or an anti-alcohol group invest in a rum company or a Cancer Society in a tobacco company?

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