Dear Editor,
A few weeks ago, the Guyana Government announced that it was selling its share in the Guyana Stockfeed Inc. Those shares are held by the National Industrial & Commercial Investments Limited (NICIL). The portion of shares which the current regime acknowledged as belonging to it on behalf of the Guyanese people amounts to seven per cent of the company.
In the minds of the public, that must raise a lot of suspicions as to the nature of this transaction. The history of the company since privatisation has been quite messy and suspicious.
When the company was privatised, it was an entity with 700,000 shares. The Government of Guyana had 38 per cent of those shares or some 266,000 shares. The main shareholder, Robert Badal, held more than 50 per cent of these shares.
Shortly after the privatisation process, the main shareholder made a move to take over the whole company. The method he used was to increase the amount of shareholding from 700,000 to 100,000,000 shares. This was done without the consent of the second largest shareholder of the company, the Government of Guyana.
The Government shares were diluted from 38 per cent to just seven per cent of the company. The People’s Progressive Party/Civic (PPP/C) Government objected to this move, which was indeed a complete takeover, via this manoeuvre.
The PPP/C Administration objected on many grounds. The main contention was that the other shareholders, particularly the second largest shareholder, was not consulted nor did they give any approval for the dilution of shares.
Having failed to resolve the issue with the main shareholder, the PPP/C Government took the matter to court.
In the year 2008, the court ruled that the actions of the main shareholder, and the Directors he appointed, were wrong and contrary to the Company Act among other issues.
The court ruled that the Government of Guyana portion of 38 per cent of the company be restored.
The main shareholder, Robert Badal, appealed the case. The case is still pending at the Guyana Court of Appeal.
This is a classic case to show the sloth of hearing cases and writing decisions by Judges leads to the perpetuation of injustice and wrongs. It is how business people think: “put it in the courts and let it languish”. It is a tool of frustrating, particularly poor people, but not confined to them. Here is the Government that was being frustrated.
While all of this was taking place and the delay caused by the Appeal Court not hearing the case, the main shareholder has been abusing the company, using it at the expense of the other shareholders.
Some examples of this include the payment to a Trinidad company (owned by Badal and called Guyana Stockfeeds Ltd) of billions of dollars for procurement, questionable transfer pricing from overseas companies to Guyana Stockfeeds Inc. The main shareholder also used Guyana Stockfeeds Inc to bailout poor investments in other companies to name a few.
While the appeal by Badal was still pending, the Government changed. The People’s National Congress (PNC)-led A Partnership for National Unity/Alliance For Change (APNU/AFC) took power.
Instead of pursuing the course set by the PPP/C administration to prevent the loss of billions of dollars, this PNC-led APNU/AFC regime is selling its share. Not 38 per cent but SEVEN per cent of those shares.
This implies that this regime is not awaiting the results of the appeal. It has accepted the illegality that was done and the taxpayers of this country stand to lose more than one billion dollars. It appears our Attorney General has agreed to settle this case in favour of the main shareholder.
This must raise serious concerns about corruption in high places in Government. It raises suspicions of millions of dollars in the kickbacks going to persons in top positions in the regime.
If this is the standard of this Administration, then how can it be relied on to deal with huge investors, with deep pockets? Will they fall into those pockets?
Since the regime has paid some lip service to getting back State property, here is a good case to prove its seriousness.
SARA should investigate this now!
Sincerely,
Donald Ramotar
Former President
