Ram & McRae was never provided with any proof of an $82M deposit to any Republic Bank account holder

Some time ago, Messrs Ronald and Rustum Bulkan, Joint Managing Directors of Precision Woodworking Limited (PWL) called to request a meeting with me. Although we had brought the auditor-client relationship between Ram & McRae (the firm) and the company to an end for professional reasons several years earlier, I agreed to meet with them at our office.

At the meeting, the company’s directors informed me that there was an issue between Republic Bank (Guyana) Limited and PWL as an account holder of the Bank over what they claimed was a deposit of a certain sum of money to the company’s account. They explained that they were seeking my representation in the matter.

I responded that for professional reasons, neither the firm nor I could offer any representation or information to them in the matter. What we did not disclose was that, out of an abundance of caution, we not only reviewed the working papers in our office but a partner of the firm was asked to carry out a further review of the alleged deposit. We found that there was no such deposit.
Continue reading Ram & McRae was never provided with any proof of an $82M deposit to any Republic Bank account holder

Treatment of Sattaur by persons from the GRA is not acceptable

Commissioner General of the Guyana Revenue Authority Mr Khurshid Sattaur erred gravely when he shared taxpayers’ information with the administration. However irrestible the demand, he ought to have made it clear that he would not comply. Instead, he compromised himself, his office and his profession. A complaint of professional misconduct was made to the local and international professional accounting bodies but was later withdrawn. There was therefore no adverse finding against him.

Seven months into a new government, the public learns that Mr Sattaur has been sent on leave to facilitate a forensic audit of the authority. I accept that, even with the apparent inconsistency.

What I do not find acceptable is the humiliating treatment he is reported to have received from persons from the Revenue Authority. If the report of leave is correct ‒ and there is no reason to doubt this ‒ Mr Sattaur remains Commissioner General and a member of the Governing Board of the GRA. He does not cease to be either because he is on leave. It is rare and improper for persons on leave to have their homes visited by their subordinates and computers and firearm taken away from them. In the case of a taxman for whom threats to life are an occupational hazard, the danger is obvious and is recognised in his being provided with a guard and a firearm licence.
Continue reading Treatment of Sattaur by persons from the GRA is not acceptable

It was a serious error to treat a special package for the AG as a benchmark

Prime Minister Moses Nagamootoo appears to have intended to dismiss the public’s response to the 50% salary increase for Cabinet members in describing it [the response] as “comparable to beating a dead horse”, adding that “this rage has run its course”. (SN Oct 22 ‘Pay hike necessary to offset ministers’ loss of earnings’). The latest evidence to the contrary is a letter by Mr Nowrang Persaud in yesterday’s Sunday Stabroek (25-10-15) ‘Attorney General’s salary should have been red-circled’.

In his letter, Mr. Persaud refers to a report touching on the differential between the salary of the Attorney General and the rest of the Cabinet on the need some decades ago to ‘import’ a Guyanese legal luminary with unique competences. In his last week’s Stabroek News column on the subject of the increases, Mr. Ralph Ramkarran had identified the package offered by Prime Minister Burnham to Sir Shridath Ramphal. Mr. Ramphal was at the time working in a top law firm in Jamaica, and in his new position in Guyana would be designated responsibility for two disparate portfolios – Attorney General and Minister of State for External Affairs – with the additional task of drafting the emerging country’s Independence Constitution.

It seems from his writings that Mr. Ramphal did his best to discourage Mr. Burnham from employing him: he would only accept the position as a technocrat without party affiliation; was doing well financially in Jamaica with his family; if for any technical reason he had to sit in the Legislature, he wanted no vote and would not be subject to any party whip. But as he said, Forbes Burnham was not easily put off and agreed to all his conditions, presumably salary included. Continue reading It was a serious error to treat a special package for the AG as a benchmark

That 50% salary increase

After less than five months in office, members of the Granger Cabinet have decided to award themselves salary increases of 50%. The increases take effect from July 1, so that the increase of 50% was after less than six weeks the Ministers had been on the job. When the press approached him some months earlier, Governance Minister Mr. Raphael Trotman had said there would be no astronomical increases. But is it not astronomical when compared with what Cabinet approved in the Finance Minister’s Budget for government employees and pensioners?

In that Budget, the minimum salary in the public service was increased from $42,703 per month to $50,000 per month, or 17.1%. But there was a catch: unlike every other year in the past thirty years, the increase was for half the year only. The effective increase then, for the people at the bottom of the scale, for 2015 over 2014, is 8.5%. For public servants receiving a salary of $100,000, the increase was 10%, or 5% over a full year, and for those receiving $200,000 and $500,000 the effective annual increase was 3.75% and 3.0% respectively. There was an additional increase of $5,000 per month for persons above the minimum wage. Note that for public servants the higher salaries attracted lower percentages and lower salaries attracted higher percentages. Cabinet clearly did not think that principle applied to them. The APNU+AFC’s 100 days commitment was “Significant salary increases for government workers, including nurses, teachers in primary, secondary and tertiary education; security personnel; and civil servants on the traditional payroll.”

And how about pensioners? Ram & McRae’s Budget Focus 2015 had noted that 2015 pension increases were subject to no retroactivity. And while the Finance Minister announced a $3,875 increase in the monthly pension from September 1, 2015, the Budget withdrew the monthly subsidy of $2,500 and $990 for GPL and GWI previously enjoyed by pensioners. Net increase: $385 per month but payable from September 1, an increase in 2015 of less than 1%! The APNU +AFC’s 100 days commitment was “Significant increase in Old Age Pensions”. Continue reading That 50% salary increase

Addressing the crisis in Sugar

A presentation by Christopher Ram to the Commission of Inquiry into the Sugar Industry

The Guyana Sugar Corporation (GuySuCo) is not only a company incorporated and intended to be regulated under the Companies Act; it forms a major part of two economic sectors – agriculture and manufacturing. See Appendix 12 – Gross Domestic Product at 2006 Prices by Industrial Origin in Volume 1 of the Estimates of the Public Sector 2015. It is also one of the largest employers in the country and in some areas, such as the Corentyne, it is the single most important economic activity and source of employment.

To the country it is a major foreign exchange earner although it is also a significant user of foreign exchange. It is believed too that the company and the industry also support the rice and other agriculture sub-sectors in sugar areas, and help to manage the anti-flood control systems with its vast network of drainage and irrigation. If the multiplier effect is considered, the economic impact is extended directly and indirectly to commercial banks, insurers, suppliers and service providers.

Alas, it is also – certainly in the last few years – the single largest beneficiary of government subsidies in Guyana. It is estimated that in the five years to December 31, 2015, the company would have received approximately G$50 billion in transfers from the Government. In 2015, 10% of current revenues of the Government proper will be going to GuySuCo, amounting in total to approximately ⅓ of the total employment cost in the 2015 Estimates of Expenditure.

Importantly, like the elephant in the room, sugar has a strong political dimension and forms a major plank of support for the opposition PPP/C. Paradoxically, even when the company came under the control of the PPP/C, GuySuCo has recorded more industrial action than the rest of the country combined.

This Commission of Inquiry (CoI) therefore has an unenviable job with wide-ranging terms of reference on a matter that has provoked intense debate with some persons calling for the shutting down of the industry while others have called for it to be phased out. Leading economist and expert on sugar economics, Dr. Clive Thomas has described the corporation as having Passed the Point of No Return: See Sugar beyond the point of no return: Stabroek News January 8, 2014 while the author of this submission has written that GuySuCo bailouts [are] unsustainable, see chrisram.net June 20, 2015. Continue reading Addressing the crisis in Sugar