Fireworks could spark at AGM over NBS Berbice Bridge investment

Apr 15, 2009 News

– rumours of insider trading in CLICO bail out surface
Fireworks are expected to erupt at this month’s Annual General Meeting of the New Building Society (NBS) with allegations of irregular practices by the Board of Directors now surfacing.
The meeting is scheduled for April 25 at Cotton Tree Primary School on West Coast Berbice.
NBS has been in the news recently as it relates to what is being described as its questionable purchase of CLICO’s shares in the Berbice Bridge Company to the tune of approx $ 1.5B.
The fireworks are likely as shareholders are expected to seek answers for the disbursement of the huge sum in the Berbice River Bridge, since the NBS has been silent ever since the CLICO debacle began.
This newspaper has received information that the Directors of NBS knew that CLICO GUYANA was in serious financial difficulties, having flouted the law by over extending itself in investments in CLICO BAHAMAS, which is in receivership.
According to a letter writer (see page 5), from the outset, NBS was requested to invest $2 billion in the Berbice Bridge Company but the then Board was cautious and invested only $350M, having regard to the net worth of NBS despite strong lobbying by some Directors for the $2 billion investment.
Kaieteur News was also informed that in the latter part of 2007, another $350 million was invested in the Bridge Company for a total of $700 Million, which was the maximum amount NBS could have invested in compliance with the specific guidelines for Financial Institutions under the FIA.
The question now being asked is why then did NBS invest a further $1.5 Billion?
According to a source, two weeks before the NBS purchase, there was a run on CLICO because certain powerful persons who had substantial investments in CLICO got wind of the parlous state of CLICO and wanted their money back.
“CLICO had no money, and time was running out as the appointment of a Judicial Manager was imminent,” the source informed.
The source explained that a point to note was that the Chief Executive Officer of CLICO is the Chairperson of the Berbice Bridge Company and Dr Nanda Gopaul, who works at Office of the President, is the Chairman of NBS.
According to the source, Dr Gopaul is also the Chairman of GuySuCo. The CEO of CLICO is also a Director of GuySuCo.
The source pointed to the connections and questioned whether a conflict of interest of the highest degree was not observed by the various stakeholders.
“As a result of NBS purchase, many powerful persons got their money back…the NBS pension scheme which had investments in CLICO. But the ordinary people and other pension schemes did not get their moneys back,” the source informed this newspaper.
This, the source believes, is a blatant case of insider trading which makes the Martha Stewart case in the USA pale in significance.
“Remember that Martha Stewart was imprisoned for her involvement in insider trading. The Judicial Manager must publish the names of all who benefited. Did anyone also benefit from a commission for facilitating the sale and or purchase at such short notice? This will be a national scandal,” the source reasoned.
From all appearance the investment in the Berbice Bridge Company is being seen as the NBS clearly over extended itself just like CLICO GUYANA did in CLICO BAHAMAS. “Just imagine there was no physical meeting of the Directors to discuss the pros and cons of this major investment,” the letter writer said.

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