Waterfront land undersold to BK: Former APNU/AFC Govt warned in 2019 of criminal charges
The former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government was warned since 2019, that the sale of over 2.553 acres of prime waterfront property valued at over $5 billion to BK International, for “overly generous” terms, would attract legal sanctions.
Prominent lawyer and former President of the Guyana Bar Association, Ronald Burch-Smith was contracted by the former APNU/AFC Government through the then Public Infrastructure Ministry to give his legal opinion on the prospective sale of several buildings and prime lots on the Demerara riverfront, to BK International.
At the time, BK International was looking to exercise its option to purchase the land, which it had been leasing from the National Industrial and Commercial Investments Limited since December 2006. At the time of the lease, there was an option to buy at $110 million. However, there were other clauses in the contract that had to be fulfilled for them to get the property at that price. BK had stopped paying rent for the property after they expressed an intention to purchase it in 2009.
This figure was arrived at because BK International, at the time, had owed almost $100 million in accrued rent (the company was required to pay $10 million per year). BK International was therefore looking to wipe out its debts and acquire the transport for prime land in its entirety, in one transaction.
“It appears from a letter reviewed by me dated 31st March 2017, that BK International proposes to pay the original option price, 1 year’s annual rent of $10 million and to receive transport. Similar terms have been rejected by NICIL in the past,” Burch-Smith documented in his advice.
It was documented that NICIL had refused to sell the land to BK International, on the grounds that the company had not held up its end of the lease agreement and was thus not entitled to purchase the land at the rates in the agreement.
BK International would eventually halt the payment of rent and NICIL took the company to court for the unpaid rent in 2013. As of 2019, when the option was sought, the matter had still not been concluded in the commercial court.
Below market value
Importantly, Burch-Smith interviewed staff at both the then Ministry of Public Infrastructure and the Transport and Harbours Department (T&HD), who all expressed concern at the former APNU/AFC Government’s efforts to sell the land below market prices.
According to Burch-Smith in his legal advice, the staff were “of the general view that the proposed terms of the sale would result in the transfer to property to private ownership at disproportionately low rates”.
“In the exercise of their joint or several discretions, public officers should be concerned about whether a decision to sell Government land at overly generous prices can result in civil or criminal sanction to them personally. This is so particularly where the sale involves no obvious benefit to the public by facilitating important or valuable investment or as the result of a public tender. In the latter case, a public tender creates no obligation to sell and may not be an appropriate legal justification for entering generous commercial terms,” Burch-Smith further advised.
Burch-Smith made it clear in his legal advice that the sale of the property to BK International would be difficult to justify and expose all those involved to criminal charges, save for the President who enjoys immunity from Cabinet decisions. He had also urged that the matter not be treated as a solely commercial issue and that care be given to the possible criminal implications of the sale.
Disregard legal advice
The former APNU/AFC Government eventually did the opposite of acting in a careful manner, going on to vest the land to BK International after the payment of just $20 million and spark criminal charges against former Finance Minister Winston Jordan who appeared in court on Tuesday and was released on $3 million bail.
Jordan appeared before Chief Magistrate Ann McLennan where he was not required to plead. The former Finance Minister is expected to return to court on February 14, 2022.
It is alleged that Jordan, being and performing duties of Minister of Finance and being the concerned Minister for the National Industrial and Commercial Investments Limited (NICIL), a company owned by the Government of Guyana, between Wednesday, February 26, 2020, and Friday, July 31, 2020, wilfully misconducted himself by acting recklessly when he signed NICIL (Transfer of Property) Order No 50 of 2020, which was published in the Official Gazette, transferring to and vesting to BK Marine Inc absolutely, all buildings, erections, stellings, platforms, and further appurtenances, that is to say, Mudlots 1 & 2, F of Mudlot 3, A, B & D, situated at North Cummingsburg, Georgetown, being over 2.553 acres, by paying $20,260,276 for the property valued over $5 billion and being sold at a price that was grossly undervalued to such a degree as to amount to an abuse of the public’s trust and without reasonable excuse or justification.