GOGA unaware of fraud allegations against President

– as audit points to forged signatures, overpaid preferred contractor

A  Police investigation had been recommended into alleged fraudulent financial and corrupt practices by  Bobby Gossai – then Secretary to the Guyana Gold Board – by auditors earlier this year, following a probe into reports of a multibillion-dollar fraud being perpetrated at that entity.
The audit conducted by Chartered Accountants Ram & McRae had found that Gossai – who was employed under questionable circumstances by then Natural Resources Minister Robert Persaud – engaged in a scheme to defraud the State and, as such, “we, therefore, recommend that the transactions be referred to the Guyana Revenue Authority and the Police for full investigations”.
Gossai was on Tuesday introduced as the President and Chief Executive Officer (CEO) of the newly-formed Guyana Oil and Gas Organisation (GOGA), after which a section of the media reported that he was in fact implicated in the Gold Board probe for allegedly forging a signature.
GOGA Director Nigel Hughes immediately issued a public missive on behalf of GOGA, saying that the organisation was unaware of the allegations against Gossai.
According to Hughes, “The Board of Directors of GOGA was unaware of the specific contents of the Audit Report referred to in the article….The Board of Directors has since secured a copy of the Audit Report and will be considering the contents of the report as a matter of urgency.”
Hughes pointed out that Gossai was retained by the Board of Directors of GOGA as CEO and his employment was part of the start-up process; further, he was currently on a probationary period.

According to the Gold Board Report, referred to by sections of the local media and the GOGA Director, then Natural Resources Minister Persaud  flouted the laws and had on occasions given or transmitted instructions to management on operational issues, such as matters relating to contracts.
“We understand from discussions with management and members of the Board that instructions came by way of Mr Bobby Gossai, Senior Policy Analyst/Adviser in the Ministry of Natural Resources and the Environment who was named by the Minister as Secretary to the Board…In our opinion, the Act does not give the Minister the power to name or nominate the Secretary to the Board and the Minister’s action amounted to a usurpation of the Board’s authority.”
With regard to the fraudulent transactions that Gossai would have been a party to, the Gold Board probe had found that 12 questionable payments had been authorised by him to Safewatch Inc.
“Of 12 payments made to Safewatch Inc during 2014, three of these amounting to $16,021,120 were made on quotations.”
One such payment of $4.3 million for the purchase and installation of a Dell server was approved for payment by Gossai.
It was found too that a contract with Safewatch for servicing of the phone system at a cost of $180,000 plus VAT per month was signed by the Assistant General Manager, Ms Seelochan who “indicated that she was acting on the direction of the Company Secretary when the contract was signed”.
According to the report into the fraudulent practices at the Gold Board, no evidence was noticed of the Board authorising or “ratifying this contract which, in our view, is unnecessary”.
That contract has since been terminated and the auditors did recommend that “steps should be taken to recover the amount of $2,436,000 paid for this fraudulent service”.
The auditors found too that VAT was included on the total invoice value of all invoices and quotations submitted by Safewatch Inc, including that for the supply of computer items, but computer equipment such as the server purchased are zero rated for VAT purposes.
“In any case, our enquiries confirmed that Safewatch Inc is not registered for VAT in Guyana and cannot charge VAT on any goods/services provided, regardless whether goods or services would otherwise be subject to VAT,” the auditors said. There were also questions that had arisen with regard to shipping and customs fees that were charged by Safewatch Inc, but no details were provided.
“The shipping and customs fees on two of the invoices and one quotation amounted to $1,388,235. The … quotation did not provide a breakdown of cost.”
The auditors had found that “it is apparent that these transactions contained elements of VAT fraud for which the Value-Added Tax Act imposes serious penalties… We, therefore, recommend that the transactions be referred to the Guyana Revenue Authority and the Police for full investigations into this company.”