Gov’t vows to recoup more than US$2M owed by Guyana Stores Limited

By Michael Younge

Tony Yassin

Executive Secretary and head of the Privatisation Unit, Winston Brassington on Tuesday, said the government of Guyana is still owed US$ 2 million (G$ 400 million) for the privatisation and sale of Guyana Stores Limited (GSL) more than a decade ago. If interest is added at a modest rate of 12 per cent per annum, that figure would be G$ 1.2 billion at the end of 2012/ 2013.
Brassington was at the time speaking during a press conference organised by the Finance Ministry and the Privatisation Unit following the public release of a comprehensive report titled “Privatisation In Tables: Phase Two (1993-2011), by President Donald Ramotar last Friday.
Kaieteur News publisher Glenn Lall and Tony Yassin are reportedly the two major shareholders of GSL. Shareholders had raised concerns about the operations of GSL, which used to be the country’s premier store. One shareholder has expressed concern regarding whether GSL was being used as a source of funding for the various business interests of some shareholders. The shareholder added that the lack of disclosure of the true state of affairs of GSL raises considerable concern about what will be left to the minority shareholders and the possibility of dividends. It also raises questions on whether the company’s affairs are being managed in the interest of all shareholders, or for the benefit of a few directors.
“Governance is totally out of the window, and no one seems to care about it,” a minority shareholder who asked to remain anonymous had stated. Another concern was whether GSL had paid its taxes. “With companies in trouble with the GRA, we could wake up and find out that GSL had not paid its taxes to the GRA, and end up losing the company.” GSL at a minimum is liable for turnover tax and property tax in any given year. Other taxes are also applicable.

Broken agreement
Questioned by media operatives about the status of repayment of taxpayers’ monies, Brassington explained that the matter is engaging the attention of the courts of Guyana following the privatisation board’s inability to recoup the monies owed as part of the original agreement brokered back in October 2000.
At the press conference, which was televised live from the studios of the National Communications Network, Brassington indicated that the privatisation board had given the green light for the government to sell 70 per cent of Guyana Stores Limited to Royal Investments Incorporated at the cost of US$ 6 million. At that time, Tony Yassin was reportedly the principal director and negotiated the deal with the government, on whose part the board was acting.
Brassington advised that only US$ 4 million had been paid by the company to date into the coffers of the National Industrial and Commercial Investments Limited (NICIL) which signals a breach of the agreements as negotiated back in 2000.

Glenn Lall

Brassington stressed that the company which was experiencing some financial problems had been given up to 2002 to pay the remainder of the monies, but never did.
“When that didn’t happen, the privatisation board engaged Mr Yassin to try to amicably resolve the matter and that failed… we were left with no option but to litigate, and that matter, unfortunately, has been in the courts for a very long time”.
Asked how long he expects that the proceedings would last, given the time that has already been elapsed and the fact that the deal has not yet received closure, the executive secretary declined to give any opinion, owing to the various considerations and factors involved.

Other court action to be filed
He noted that the lawsuit before the courts only addresses one aspect of monies owed to the State by the Royal Investments Grouping, pointing out that the Board would be taking action on two other critical matters, which have resulted in massive revenue loss thus far. As a matter of fact, theBoard can only proceed once the ongoing trial is wrapped up.
Brassington told media operatives that the government is still going to proceed with litigation to recover the almost Gy$ 100 million balance on the promissory note.
The government also plans to move to the court, using its Property Holdings Company, which has 1500 shareholders, to recover a string of multimillion-dollar properties and resources which the state was unfairly deprived of since the negotiation of the deal.
These are properties that were occupied by Guyana Stores and which were either supposed to have been bought or relinquished, according to the privatisation report. “Some of these properties are prime pieces of real estate, including the Garage property on Water Street, the Electrical property on Main Street, the branch in Berbice and the branch in Lima,” Brassington reported.
The Auditor General had cited GSL for owing the State the outstanding fees, in his 2010 report, which was handed over to the Speaker of the National Assembly.