Chinese Company does not want to pay full amount owed on GTT shares - Prime Minister

Chinese Company does not want to pay full amount owed on GTT shares – Prime Minister

May 22, 2017 News

– Reminds Guyana about drawbacks of pursuing litigation

By Kiana Wilburg

The Chinese company that owes Guyana US$5M on the controversial GTT shares is not interested in clearing the debt in full. Hong Kong Golden Telecom Company (HKGT), the company that bought Government’s shares in GTT, wants to pay a reduced amount.
This is according to Prime Minister and First Vice President, Moses Nagamootoo.
The Parliamentarian said that a delegation from the Hong Kong Company was in Guyana and they acknowledged that the US$5M is owed.
The Prime Minister said that the Hong Kong team held talks with NICIL and they placed on the table, an offer to pay “x amount.”
The First Vice President said that while he does not know the exact offer, it is not the full amount.
“It is a reduced amount on the grounds that they were offered senior shares in the company. This was a side agreement with the previous government. I understand that the negotiation was near breaking point. NICIL representatives insisted that they wanted the full amount.”
Nagamootoo, a seasoned lawyer, said that he asked the team if they had an addendum to the contract or something written to support the claims of a side agreement.
“But they didn’t answer that,” the First Vice President added. He noted however that the team will be returning to Guyana soon.
Furthermore, the Prime Minister reminded that the contract regarding the controversial GTT shares had stipulated that any arbitration or court proceedings as regards the agreement should be done in England.

Prime Minister, Moses Nagamootoo

“The company’s fallback position is that if you had to go to trial, it will cost the Guyana government US$1.5 to take lawyers and so on and the court could make a judgment that would give them time. Therefore they are saying we are offering you upfront now. You don’t have to spend a lot of money and we can pay you as quickly as possible.”
The Prime Minister said that the company is of the realization that “Guyana needs money” but his “private feeling” is that the costs to pursue the case should not deter Guyana from going after what it is rightfully owed.
“You can’t possibly approach the matter this way (thinking) that litigation may cost you. We could very well win the case and the court could award in favour of us.”
Additionally, Nagamootoo is of the belief, that since the company is based out of China, there will be an inclination to “deal fairly” with Guyana.
He said that the companies from China would be under an obligation to “deal fairly with third world countries.” He said that “China wants to help countries like Guyana.”
“In official circles it would not look favourably trying to cut corners with a poor country. They would come under more pressure than us to pay up.”
It was last year that the National Industrial and Commercial Investments Limited announced that Guyana would be pursuing the route of arbitration in the United Kingdom in hopes of recovering the outstanding US$5M from the sale of Government’s shares in GTT.
This was according to Head of NICIL, Horace James.
James had said, “We are in the process of executing all the relief measures that are in the sales agreement in order for us to get it back. We have engaged our lawyers in the USA, and we are using the lawyer who was involved in the sales agreement process and who helped us to draft the agreement.”
“They recommended a company in the United Kingdom to help us in the arbitration whenever that time comes and when we are going there.”
The NICIL officer added, “It is important that we use a UK company because the arbitration will be held in London.”
James said that NICIL is not only going after the recovery of the US$5M, but also interest costs, legal fees, the signatory for the agreement and even the person who guaranteed it.
“So that process has started, and our lawyers have presented all the issues concerning the shares and said that it is a very good chance that we could get back the money.”

MYSTERY DOCUMENTS
James was reminded that Minister Joseph Harmon, who is also a NICIL director, had brought back some documents from his infamous China trip which he received from Hong Kong Golden Telecom Company (HKGT), the company that bought Government’s shares in GTT.
In this regard, he confirmed that Harmon indeed submitted such documents.
When Kaieteur News asked to see the document submitted by Harmon, James declined to share it, stating that it might be used as part of the arbitration proceedings.

INITIAL ARRANGEMENT
It was in 2012 that NICIL sold the Government’s investment in GTT for US$30M of which the sum of US$25M was received. The balance, US$5M, was to be paid within two years.
But there have been conflicting stories since that initial arrangement.
At one point, the nation was told that Guyana’s former Ambassador to China, David Dabydeen, facilitated a debt write-off to HKGT.
HKGT is a subsidiary of Datang Telecom International Technology (Hong Kong) Company Limited.
Kaieteur News understands that the purchase agreement between the Chinese company and Guyana was framed in such a manner that in the event of any legal issue, Guyana or HKGT would have to petition the United Kingdom courts.
NICIL had said that in an attempt to avoid costly and lengthy adjudication of the matter in the English Courts, it called on the government to encourage HKGT, through diplomatic channels, to honour its contractual obligations.
NICIL said that HKGT alleged that following a series of communications with the former Guyana Ambassador to China, HKGT was assured that it was not required to pay the balance of US$5M.
This was because HKGT had not been granted the same minority protection rights enjoyed by NICIL—that is, two representatives, instead of one, on the GT&T Board of Directors. HKGT alleged that it was initially promised two seats by the then Government of Guyana.
NICIL said that HKGT also alleged that the decision to waive the US$5M was contained in a side agreement.
NICIL noted that it has not been able to verify HKGT’s claim of waiver and has requested the assistance of the Government of Guyana to verify the validity of HKGT’s assertion and the documents they produced to support same.