Gov’t needs to consider whether financial institutions should be allowed to operate as part of any group of companies

The traditionally reserved Bank of Guyana (the Bank) has found itself increasingly drawn into public statements and appearances over the uncertainty surrounding the foreign exchange market and the deterioration of the exchange rate of the Guyana Dollar. Of course, the Bank is in fact discharging one of its statutory functions under section 5 of the Bank of Guyana Act. i.e., “fostering domestic price stability through the promotion of stable credit and exchange conditions.”

An analysis of the causes of the current state of the foreign exchange market will require far more data than is currently available. Hopefully, the Bank will make every effort to soon publish the 2017 first quarter statistics, including foreign currency flows, and transactions with the non-bank and bank cambios. Not only will we be able to see hard evidence of anecdotal reports of foreign earnings by the agriculture sector, flows from exports and imports as well as remittances and imports, but hopefully, we can see the role and extent of some major but less discussed players in the foreign exchange market. Continue reading Gov’t needs to consider whether financial institutions should be allowed to operate as part of any group of companies

GECOM and its interesting numbers (updated)

The Elections body Guyana Elections Commission has announced that the number of eligible voters on the Preliminary List of Electors (PLE) for the upcoming May 11, 2015 elections stands at 567,125. As a percentage of the 2012 census population of 747,884, the number of persons eligible to vote and therefore age 18 and over is 75.83% suggesting that those under age 18 represents 24.17%. Since the November 2011 elections the number of persons on the preliminary voters list has increased by over 75,000 persons or by 15.3%.

The current PLE as a percentage of votes cast in 2011 is some 164%. These numbers are worrying when measured against comparable benchmarks or against any local indicator.

Guyana is categorised for purposes of the UN publication, World Population Prospects: The 2012 Revision under “Other Less Developed Countries”. Among that group across the world – including the rich countries with an aging population – the percentage of the population under age 15 is 26%. Specifically, the publication estimates Guyana as having a population under age 15 of 36%.
Continue reading GECOM and its interesting numbers (updated)

Sale of 950M preference shares by NICIL does not alter response to PSC

The Private Sector Commission (PSC) in its most recent statement (December 20, 2013) on the Berbice Bridge Company Inc was unwilling to acknowledge writing the following on December 11: “As far as we are aware, the Government directly or indirectly has no investment in, or liability relating to, the [Berbice River] bridge at this time.” Seen as a crudely disguised political response to APNU’s call for reduced toll charges across the Berbice River, the statement drew questions from some of the PSC’s membership about the process leading up to its issue.

Instead of addressing the concerns whether the December 11 statement was authorised by the PSC’s executive rather than authored at the behest of one member of the executive, the PSC after an unsuccessful investigation into an email “leak” chose intrigue, diversion, distortion and deception. Its latest offering reveals that NICIL has sold to the National Insurance Scheme 950 million worth of preference shares in the Berbice Bridge Company Inc, which itself never acknowledged the existence, let alone the ownership of those shares, even in statutory filings signed by then Company Secretary Winston Brassington.
Continue reading Sale of 950M preference shares by NICIL does not alter response to PSC

The PSC should be a little more careful with facts

The Private Sector Commission in a statement issued on Wednesday, December 11, stated that “As far as we are aware, the Government directly or indirectly has no investment in, or liability relating to, the [Berbice River] bridge at this time.” This is mindboggling ignorance given all the public revelations and exchanges over the Bridge Company’s ownership and performance.

The ownership structure of the company is made up of ordinary share capital of $400 million and preference shares of $950 million. The holders of the ordinary shares are NIS, New GPC, Queens Atlantic and Secure International Finance Company each having $80 million each, and Hand-in-Hand and Demerara Contractors each holding $40 million.

What this means is that the Government, inclusive of the NIS, owns 76% of the issued shares of the company. Apparently, the PSC’s awareness, or lack thereof, also does not extend to knowing that NICIL, a government agency, owns what is called a Special Share in the company. The Articles of Amendment of the company expressly provide that in respect of specified matters, “no action can be taken by the [Bridge] Company, without the affirmative vote of the holder of the Special Share.” And because the PSC claims not to know that the Government has this $950 million investment in the Bridge Company, it does not need to address the illegality of NICIL granting the Bridge Company an annual subsidy of around $110 million of dividends forgone.

When purporting to speak for the private sector, the PSC is expected to be a little more careful with facts. Failure to do so may not embarrass those who cause such statements to be made but reflects poorly on the rest of the private sector.

The fiasco over at Kingston

Berbice Bridge Company update
In the introduction to last week’s post, I related an exchange of letters I had with the Berbice River Bridge Inc. in which I had requested access to certain public documents of the Berbice Bridge Company Inc. In response to the reply by the Company Secretary of BBCI that I provide justifiable reasons, I indicated that the law did not require me to give any and I restated my request, giving the company two working days to provide me with access. I am pleased to report that within that time, I received a letter from the Company Secretary advising me that the company had been advised that I am entitled to access and could visit the registered office within normal working hours. I commend the directors of the Bridge Company for their responsible action in this matter. 

Small as that matter may seem, it is a significant development in corporate compliance as companies, their directors and officers become increasingly aware that they are required to comply with the Companies Act to which accountability and transparency are central.  

At the time of sending my first letter to BBCI, I also sent similar letters to Mr. Winston Brassington of NICIL and Ms. Marcia Nadir-Sharma of Atlantic Hotel Inc. (AHI). Neither Brassington nor Nadir-Sharma has responded to those letters or reminders sent one week later. In the reminder letter I indicated my intention to pursue the matter as legally advised. The disregard and contempt of the law by Brassington and Nadir-Sharma can no longer be tolerated or excused on the grounds of age, inexperience, incompetence or ignorance.

NICIL and AHI have retained just about every law firm in Georgetown in the belief that they can limit the number of firms professionally free to act against them. So Brassington and Nadir-Sharma, two key officers of these entities, should know that the indemnification provisions of the Companies Act only apply to the director or officer who has acted honestly and had reasonable ground for believing their conduct was lawful.

Contempt for the law is hardly an honest act.

Years after spending billions of dollars in clearing prime land contiguous to the Atlantic Ocean and the Demerara River, relocating sewerage lines to allow for construction on the land, and long after signing a construction contract for US$51 million, Atlantic Hotel Inc., a government company decided to have a Feasibility Study of the project done by the Miami-firm CHR Consulting Services Inc.. The report on that study was issued in September 2012. Yet one year later, and only after relentless pressure has AHI, a wholly-owned government company, has provided to the public parts of that report.

The information was released by Winston Brassington just around the same time that he finally conceded in an interview with Johann Earle of the Stabroek News what he was being warned about long before committing more than US$20 billion of public funds in the project: that the project was never as strong as Jagdeo and he had been selling like salesmen of old. In today’s piece I look at the report and discuss it against some of the statements made by Brassington on the hotel construction of which is in progress.

I have no reason to doubt that the consultant preparing the Study is anything but a highly reputable company. Which then raises the question why the (revised?) Executive Summary would fail to mention that the study was conducted in 2010 as Mr. Brassington told the Stabroek News, and refer to the key changes, if any, made to the original report. Another key omission is that no one quite knows what the Terms of Reference (ToR) of the Study are and whether this included reproducing copies of all the advertisements by Brassington to demonstrate how transparent the process has been! 
Continue reading The fiasco over at Kingston