Unwarranted attack on independence of GSI Board

Apr 16, 2009 Letters

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Dear Editor,
I have recently read in SN edition of April 9th, 2009, what seems to be a comment on my earlier letter decrying the journalism of Adam Harris and Kaieteur News (see KN’s edition of April 5th 2009) by a Ms. Marcia Nadir-Sharma, in which the writer is questioning the level and number of related party transactions between a company in which I am the majority shareholder Guyana Stockfeeds Inc. (GSI), and me.
In her letter, Ms. Nadir-Sharma asserts that the majority of the Board of Directors of GSI either work for me or are related to me.

For the information of readers who are not members of GSI and are not au fait with the company, its Board of Directors consists of Messrs. Andrew Pollard and Nigel Cumberbatch, my wife Mrs. Nauth-Badal, and me. Mr. Pollard is a respected commercial lawyer in private practice with eminent Chambers, and Mr. Cumberbatch is one of the foremost agronomists in Guyana. Neither is employed at GSI, and neither are they related to me.
Ms. Nadir-Sharma appears to have descended to an untruthful, gratuitous and completely unwarranted assault on these gentlemen in a vicious attempt to try to prove her claim of a lack of independence by the Board.

Ms. Nadir-Sharma questions GSI’s purchase of the assets of the National Edible Oils and Fats Inc. (NEOFI) (“which are now idle”). However, she omits to inform the public that with this purchase, GSI assures itself of supplies of raw materials at half the cost of imports.
The purchase was done since 2001at half its market value, was disclosed in the annual report of that year, and approved by shareholders at the Annual General Meeting of Sept. 2002. In fact, GSI has already recovered its investment.

What Ms. Nadir-Sharma has carefully omitted to say is that it was her own company National Industrial and Commercial Investments Limited (NICIL)’s mismanagement which led to NEOFI and its assets becoming idle in the first place.
She also questions the acquisition of Popeye’s fast food franchise by GSI. However, if she had troubled herself to consult the Annual Reports which are sent to NICIL as a shareholder, she would have seen that for the years 2007 and 2008, Popeye’s has already repaid just under one-half of its purchase price. Again this investment which was acquired at a third of its market value was approved by all shareholders at the Annual General Meeting in July 2008.

She would also have observed that I have not yet called on GSI to pay the purchase price for this franchise.
However, little details such as these probably escape the critical eye of Ms. Nadir-Sharma.
Ms. Nadir-Sharma notes a relative decline in the profits of the company. In case she may not have noticed, this has been a global trend with raw materials skyrocketing in price, while manufacturers like GSI forego taking profits to cushion their core customers; in GSI’s case the hard working Guyanese farmers.
Had she taken the trouble to debrief the NICIL representatives who attended the Annual General Meetings of 2006 and 2007, they would have told her this was fully ventilated at those meetings, and shareholders understood and approved.

Ms. Nadir-Sharma blithely asserts that dividends have been almost negligible.
This assertion is duplicitous to say the least, as when NICIL managed GSI, the dividends it paid to shareholders were under $1 million each year! In contrast, since I have taken over GSI, the company’s dividend has increased steadily.
GSI paid $48 million in 2005, $48 million in 2006, and $96 million in 2007!
This was forcefully pointed out to Ms. Nadir-Sharma’s boss, Mr. Winston Brassington, by shareholders at an Annual General Meeting at which he was shouted down when he attempted to make a similar point.
Ms. Nadir-Sharma facilely questions related party transactions between GSI and a similarly named company in Trinidad and Tobago.

She asks what are the reasons for several large payments by GSI to that company and questions the transparency of these.
However, had she taken the trouble to attend the Annual General Meeting for 2007 held on 12th July 2008, she would have learnt that this company advances payments for raw materials for GSI without security, sources spare parts for it, collects hard currency receivables for it, and the payments she questions were mere reimbursements for the payments made by it for GSI.
Were it not for this offshore working capital support, GSI would have been unable to ensure reliable supply of feeds to the local poultry industry given significantly higher cost of grain shipments and local banking limits.

Additionally, much of this is stated in the audited Annual Accounts for the years 2007 and 2008 which she has copies of.
In the light of the above, I have no alternative but to conclude that her diatribe in which she carefully omits to present a full factual picture to the readers, is the latest step in NICIL’s campaign of harassment and disruption directed against GSI and me.
If she has genuine concerns, I take this opportunity to invite her to attend the next Annual Meeting on 30th April 2009, at which she can receive full information on all or any transactions or issues raised by the accounts.

She mentions that the Court had ruled in favour of NICIL on two occasions, the latest being on April 7th 2009 when NICIL secured an interim injunction.
While I am not at liberty to explore the merits of these matters their being sub judice, I can point out this “ruling” was merely an interim one granted ex-parte (after hearing only one side) and GSI will have its opportunity to be heard.
I can also observe that Justice Jainarayan Singh’s ruling – which is under appeal – had the effect of depriving a number of shareholders (including myself) of our property without affording us a hearing, which is one of the grounds of appeal.
Robert J. Badal,
Chairman, Guyana Stockfeeds Inc.

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