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No end in sight for Globe Trust

Feb 11, 2010 News

…two directors facing court actions dead

As time runs out, liquidators of Globe Trust and Investments Company Limited (GTICL) says that the possibilities of all the depositors being paid remains bleak with only a few months remaining before a mandatory deadline for court filings.
Court proceedings against several debtors are still in process with some matters dating back to 2001 against directors of the institution. Two of the directors who were accused of bringing Globe Trust to its knees have died. So far of the almost $800M, an estimated 20 per cent have been collected.
And even then, the depositors are not the first priority in the payment schedule as the liquidator, fees to the Bank of Guyana and salaries, would take preference.
In June, liquidators Nizam Ali and Company, will have to signal whether it will apply to the court to grant liquidation orders. In the meantime, the liquidators are facing an uphill task of tracking down the debtors who borrowed hundreds of millions of unsecured loans and then persuade them to pay.
Yesterday, according to Nizam Ali, things are not looking good for the depositors and while a mandatory court filing will have to be done in June, it is not being ruled out that a request for an extension of time will be done.
Several foreclosures are underway against delinquent debtors.
Last year October, Chief Justice (ag), Ian Chang, had ordered compulsory liquidation of the entity after an application by the Bank of Guyana.
Of the 5,000 depositors, some 3,000 have deposited $100,000 or less. This would mean that if there is a commitment to pay some of the depositors, it is unlikely that anyone would receive more than $100,000.
It was the second such application—The first was filed in 2002 when numerous depositors had attempted to intervene in the case.
Globe Trust began operating in April 1991 and was licensed in 1999 to conduct depository financial business with authority to engage in Trust business. However, in 2000 and again in 2001 a series of inspections by the BOG found the institution to be in breach of the Financial Institutions Act, and the BOG, with the intention to liquidate, seized the institution in September 2001.
Several attempts thereafter to attract an investor failed.

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