Looking back at Business Page

This, my closing column for what was a truly eventful, indeed historic year is not about introversion or narcissism but one that was forced by reality. I had really intended to review the annual report of the Demerara Bank Limited which will be holding its annual general meeting tomorrow. I could not anticipate that a public company would refuse to make available a copy of its annual report to be reviewed in the media. In fact, the bank indicated that it would not provide a copy of its annual report until after the general meeting. So much for transparency and good governance in twenty-first century Guyana.

I could have written about the economics and morality of that new buzzword ‘boycott’ which has been around for millennia. In the late eighteenth century the Society for the Abolition of the Slave Trade organised a highly successful boycott of sugar produced by the enslaved in an attempt to end the slave trade in the British colonies. In India’s struggle for independence, Gandhi called on Indians to boycott British-made products. And in the struggle for freedom in southern Africa, much of the non-aligned world participated in the boycott of South Africa in the days of white supremacist apartheid. As a student in the UK in the early seventies I responded to a call by the National Union of Students by closing my account with Barclays Bank which was funding the Kabora Bassa Dam.

Boycotts of course can be misapplied as when they are used by the state to discriminate against someone they wish to punish or when citizens use them to pursue a racist agenda. The American embargo of everything Cuban must surely be considered immoral and hardly successful. Yet it has gone on for fifty years. But I have digressed too far.

I thought it might be useful to reflect on some of the columns published in these pages in 2011. One thing I noted and will address in 2012 is the emphasis in 2011 on public sector finance and economics rather than business proper. That it was an election year might have been a subconscious factor. That Ram & McRae had begun an award for the best annual report might be another. Hopefully 2012 will not be another election year – unless it is local government elections – and our public companies need to have the message they send out, their pronouncements and predictions, analysed and discussed.

The selection of 2011 Business Page extracts this week and next is largely random. They are not necessarily my favourites, nor of the greatest importance, seriousness or depth. Even continuing relevance may not apply in each case, but here goes starting with January and ending in April.

2010 corporate performance and reports (January 16)
“2010 had turned out as a bumper year for some of Guyana’s leading businesses. With several public companies having a September 30 year end, the results are welcome for the shareholders of Banks DIH Limited and its banking subsidiary Citizens Bank Guyana Limited; the DDL associated banking business Demerara Bank Limited and Republic Bank Guyana Limited.

“The annual reports [of public companies] have one limitation running through them. None of them even mentions the movement in their company’s share prices as reported by the local Stock Exchange. This is clearly wrong since people buy shares not only for dividends but also for capital appreciation as reflected in the price for shares.”

Mr Nadir on state entities’ audit and contract employees (January 24)
“Stating that I used a broadside to describe the state of audits of public entities, he dared me to name any of those entities. Does he need any more than NICIL, the entity of which the Finance Minister is Chairman and through which state assets are diverted for unlawful purposes, and which disdainfully refuses to have an audit or to file an annual return? Just in case he needs more, here we go: Go-Invest, Guyana Energy Agency, Institute of Applied Science and Technology, Integrity Commission, GINA. Need some more? What about National Sports Commission, Guyana National Bureau of Standards, Environmental Protection Agency, etc.”

Justiciability of Article 13 of the Constitution (January 27)
“On the question of the justiciability of what is now Article 13 of the Guyana constitution as well as enshrined in the fundamental rights article (149c), the then Chancellor said: ‘[The question] is therefore in Guyana at large for debate and decision. Now that it has arisen, the court cannot retreat into a state of intellectual agoraphobia, refusing to venture forth and to express an opinion one way or another.’ Responding to the question the Chancellor said: ‘I see no reason to think that the articles in Chapter II of the Constitution have no juridical relevance and are merely idealistic references with cosmetic value only. So to think would be to seek to debase the Constitution.’”

Driving tax policy (January 30)
‘Tax policy has to be driven by a vision and relevant information. This column has called for more relevant information to be disclosed in public documents. Principal among these would be the annual report of the Guyana Revenue Authority which the Minister of Finance has failed to table in the National Assembly for some time now. Let us see how much the construction sector, the bauxite sector, the forestry sector, the agriculture sector including rice, sugar and other crops sectors contribute to the national coffers, and how much remissions, rebates and holidays they receive which may amount to billions each year. And yes, we should be able to see how much each region contributes and compare this with their receipts from the central government.”

The Guyana Stock Exchange (February 16)
“We have not heard much from or about it recently. Passing its offices at High and Robb Streets it is hard to believe that this is the institution that was set up with much hype, expectation and hope that it will make access to capital easier and cheaper, widen shareholder ownership and raise the bar of corporate governance. The Guyana Stock Exchange, or to use its more formal name, the Guyana Association of Securities Companies and Intermediaries Inc, was incorporated on June 4, 2001 after several studies with the principal aim of encouraging companies to “go public,” a term generally used to mean companies offering their shares to the public. To encourage such companies the government offered them favourable tax treatment including waiver of duties payable on the transfer of shares in quoted companies and exemption from Capital Gains Tax on gains made on the disposal of shares in public companies.

“As the stock exchange enters its eighth year of operation, policy holders may wish to look at the steps taken by Jamaica, where its exchange too had slowed almost to a crawl. Jamaica’s answer was the creation of a Junior Stock Exchange that within a couple of years has seen eight companies entering the market with another ten lined up for listing in 2011.”

Dr Ashni Singh’s tongue (March 20)
“The World Bank office came in for a scathing attack from Dr Singh who accused the bank’s staff here of having ‘one of the largest appetites for publicity and self-promotion’ and seeking to increase their ‘creature comforts’ by relocating to ‘a grand former colonial residence opposite one of the city’s most fashionable cafés.’ [Ed’s note: I understand that the café now uses this abuse in its not so subtle self-promotion.] Coming in for his tongue-lashing was the Economic Intelligence Unit which had dared to question the final outturn for 2009 after the economy had performed poorly in the first three quarters. It was a case of how dare they question him.”

GBTI’s prediction and incredible run (March 27)
“Chairman Mr Robin Stoby in the 2010 annual report of the Guyana Bank for Trade and Industry exulted that the bank’s future was as ‘luminous in the vein as our head office’ and the predicted the Bank becoming ‘the leading bank, not only in Guyana but also further afield.’

“While there may be some over-enthusiasm in the Chairman’s predictions, they are understandable with net income before taxes increasing by 17.8% in 2010, 25.8% in 2009, 14.8% in 2008 and 23.9% in 2007, making for a cumulative increase since 2006 of 110.6%. Because of the tax effect, after-tax profits have increased cumulatively over the same period by 138.1%.”

Annual General Meetings generate interest (April 24)
“As the season for general meetings moves into high gear, members, or as some companies call them, shareholders, have been showing some interest in these meetings, although not always for what might be considered the right reasons. One complainant in a letter appearing in the press this week went so far as to make the charge of meanness against the directors and management of one of those companies. For good measure the writer reported that there was a ‘deep groundswell of resentment against the directors and management.’ One individual who takes a healthy interest in such meetings and is one of the younger breed of investors wrote me on a number of issues all of which he suggested indicate that the directors and management are generally insensitive to the convenience of their members, including the calling of meetings when most persons would be at work, the meetings of more than one company being held on the same day, and no facilities for the aged and infirm. The shareholder was so incensed that he suggested that despite the expense of putting out glossy annual reports, company management really do not want shareholders to attend, speculating that there must be ‘something to hide.’”

Vaitarna and 1.82 million acres of forest (April 28)
“When Agriculture Minister Mr Robert Persaud held his press conference on April 12, 2011 to defend the permit/agreement over 1.82 million acres granted to the Indian company Vaitarna Holdings Private Inc, there had been very few letters and questions about the manner in which the two parcels of the land had been allocated to the company owned by Mr Siddhartha, the coffee magnate of India. Mr Persaud’s accusation of a ‘misinformation’ and ‘sleazeball’ campaign seemed therefore both inappropriate and disproportionate particularly since Mr James Singh, Commissioner of Forests had spoken two days earlier on the matter.

“With regard to the actual sums collected, both the US$254,000 and the $600 million should have been paid into the GFC from which, subject to the Act, surpluses could be paid into the Consolidated Fund. Both Mr Singh and the Minister confirmed that the lesser amount was paid to the GFC but were ambivalent with respect to the $600 million. From a review of the Commission’s records it appears that the $600 million was paid straight into the CLICO fund, in a liquidation process that defies many laws but which the public is silent about for reasons of convenience.”

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