Ramps Logistics Guyana fined $20M by GRA for violating Customs Act
…sold 51 % shares T&T businessman with Guyanese parentage
…questions Guyana Govt’s denial of Local Content Certificate
Even as the Trinidad-based company is seeking answers over the denial of its Local Content Certificate, it has been revealed that Ramps Logistics Guyana was fined $20 million by the Guyana Revenue Authority (GRA) for violating local customs laws.
A senior official told Guyana Times on Thursday that the company, which provides freight forwarding and supply chain management services here since 2013, acts as the agent of motor vessel, Seacor Mixteca, and they failed to report the vessel departing Guyana.
This, the official explained, is in violation of the Customs Act hence Ramps paid the fine of $20 million in lieu of court proceedings being instituted against the company by the GRA.
Further, the company was asked to show cause why their customs brokerage license should not be suspended for this bread but it has so far failed to provide any justification. Despite this, however, Ramps continues to conduct transactions on behalf of the importer.
This publication was told that the discovery of the breach was made during an investigation done in January 2022.
Meanwhile, late Thursday evening, the company said that indeed there was an issue with GRA but claimed it was due to “some miscommunication.”
“…we were able to quickly resolve the issue between our lawyers, and the legal team at the Guyana Revenue Authority. We are confident that this matter has been resolved between both parties,” the company said in a release to the media.
Local Content Certificate
However, the official could not say whether this proceeding was the cause for the Trinidad-based company being denied its Local Content Certificate – one of the requirements of the Local Content Act that was passed last December.
The Act defines a local company as one incorporated under the Companies Act and beneficially owned by Guyanese nationals. Beneficial ownership is defined as owning 51 per cent of the company. Additionally, a local company is expected to have Guyanese in at least 75 per cent of executive and senior management positions and at least 90 per cent in non-managerial and other positions.
On Wednesday, Ramps Logistics Guyana claimed that it followed all the requisite guidelines but Government has denied its Local Content Certificate, via an “automated” email, without any explanation.
The company said while it is not making any assertions as to why it was denied entry into the Local Content Registry, this move however will negatively affect the company and ultimately threaten the over 400 Guyanese employees’ livelihood.
“The Local Content Secretariat is entirely within its right to refuse entry to any company seeking registration according to the legislation. However, we ask that reason be given for this denial so that companies can take the necessary steps to become compliant,” the company said in a statement, adding that transparent protocols should be put in place to aid investors willing to set up operations in Guyana.
T&T businessman with Guyanese parentage
At a press conference Thursday morning, Ramps Logistics Chief Executive Officer (CEO) Shaun Rampersad, said the company divest 51 per cent ownership of its Guyana operations to Trinidad-based investor Deepak Lall, who has Guyanese parentage, to bring its operations in compliant with the Local Content Laws.
Lall’s grandfather and father are both Guyanese-born but migrated in 1961 and the family now operates one of the largest oil and gas companies in the Caribbean out of Trinidad. In fact, Lall’s grandfather was in the petroleum business in Guyana, operating a gas station – Lall’s Esso Station in Vreed-en-Hoop, West Bank Demerara during the 1950s.
“The company wanted to divest to a partner who can add value not just to our company but to Guyana as whole. So, we were very, very particular about making sure we divest to a Guyanese national who we felt could add significant value to the organisation. That was extremely important to us.”
“[Deepak Lall] knows, of course, that we work very closely in the oil and gas sector here in Guyana and that was a major area for him to reconnect to his Guyanese roots and from his grandfather to himself, servicing companies [in oil and gas],” Rampersad disclosed.
According to the CEO, Lall bought 51 per cent shares for $210 million and the monies were earmarked for two major projects for the company – a new cargo airline for additional airlift into and out of Guyana, and secondly, a new shipping line to move cargo between Guyana, Trinidad and Suriname.
“We felt very, very proud to be able to find somebody like this to be able to come back and invest in Guyana. We really, really did and so of course, there is a certain amount of hurt in the team, I would say, because we were at the [final] stage. But we really went out there and we were able to bring back somebody who would add significant value to Guyana,” Rampersad contended.
He noted that the company felt it was playing its part in bringing not just investments but network and skills from the Guyanese Diaspora back into Guyana in keeping with charges and pleas from President Dr Irfaan Ali.
Rampersad related that he is proud of the company they have built over the past nine years, adding that Ramps Logistics is still committed to continue working in Guyana especially since there are a lot of people depending on the company.
Without a Local Content Certificate, Ramps Logistics Guyana can still be available to provide its services to largely the non-oil and gas sector. But the CEO pointed out that a vast majority of its operations are catered for the oil and gas industry.
Meanwhile, hours after Ramps had disclosed that it was denied its Local Content Certificate on Wednesday, the Private Sector Commission (PSC) of Guyana said it fully supports the Government intention to take strong action against entities that are attempting to circumvent Guyana’s Local Content Law.
“The PSC is concerned by the ongoing practice to bundle contracts which often limits local businesses participating in the value chain. The Commission will continue its advocacy to ensure that the Local Content Law aids the utilization of Guyanese goods and services and supports skills development, and the training and employment of citizens,” the PSC said.
In fact, during a recent press conference, Vice President Dr Bharrat Jagdeo had spoken of foreign companies operating in Guyana who are consistently trying to beat the Local Content Act passed last year. Some of these manoeuvrings include the creation of shell companies and using some members of the Guyanese Diaspora to do so.
Questioned about this issue, especially since the fact that Deepak Lall only obtained a Guyanese Passport in 2021 can be seen as a “convenience” to his entry here, Rampersad contended that this is not the case.
In fact, he disclosed that the company was initially contemplating divesting the 51 per cent share to its Guyanese team before approaching Lall to invest.
“That was our original plan. So, before discussing anything with Deepak, that’s what we were originally planning to do. We had started to put everything in place… A few months ago, there was a lot of talk in the Guyanese media about companies trying to skim the [Local Content] law by giving shares to their employees. So at that point we decided… that instead of divesting to our employee, let’s bring in a shareholder, get the additional capital and later on this year, we’ll put together an employee-share ownership plan,” Rampersad explained.
As it is, Ramps Logistics currently has a five-member Board of Directors, three of whom are Guyanese inclusive of Lall and two foreigners. Additionally, Rampersad disclosed that of the 400 employees of Ramps Logistics Guyana, only two others are foreigners. (G8)