I was clean on NICIL’s financial affairs – Winston Brassington

Mar 07, 2012 News

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…but evidence points to questionable deals

Head of the National Industrial and Commercial Investment Limited (NICIL), Winston Brassington, has

justified his stead at the helm of the Privatization Unit.
Brassington chose to respond to queries about his integral role in having established Queens Atlantic Investment Inc (QAII).
Brassington in his missive to the Guyana Times and to the State Media (Guyana Chronicle) said “I have done my job with honesty and integrity and can stand up to whatever scrutiny is brought to bear.”
In 2008 when the illegality of the QAII deal was exposed, his colleague in government transactions, Geoff Da Silva, who headed the Guyana Office for Investment (GO-Invest) in speaking on the deal involving Brassington was forced to admit, “We made a mistake…We thought it was covered in law.”
The forum at which Da Silva made the revelation was “Guyana’s Privatisation and Taxation Policies and Practices” organised by the administration, in retaliation to comments made by local businessman, Dr. Yesu Persaud.
Persaud had said that concessions similar to those granted to QAII should be given to other local companies. This attracted a sharp response from none other than the then Head of State, Bharrat Jagdeo.
Concessions?
According to figures released by the Privatisation Unit, during the hosting of this seminar on Government’s privatisation and taxation policies and practices, between 2003 and 2007, the Guyana Office for Investment (GO-Invest) also granted some 285 companies concessions.
Up to 2002, 14 companies were either partially or totally divested while from 2003 in the second phase of privatization, 26 entities were privatised.
According to a Privatisation Unit report from 2003 there were 99 transactions from 29 Government entities. These were broken down into 26 privatization deals, 46 real estate transactions, and 27 restructuring/wind-up deals.
Of the 26 privatisation transactions, four were not advertised with two of these ending up in an employee sale in the case of Guyana National Newspapers Limited and an employee/management buyout in the case of Surapana Farms.
Of the remaining 22, three were negotiated and finalised after inadequate responses from advertising. These include Linmine and Aroaima Mining Company/Bermine.
Queens Atlantic Investment Inc (QAII) was actually a fourth but the seminar made no mention of the QAII deals in the initial presentations.
According to the Privatisation Unit, while proceeds from Phase 1 were more than $1.1 billion, gross proceeds from Phase Two exceeded $23 billion from privatisation/real estate transactions between the period 1994 and 2007.
At that time, in response to the queries surrounding the QAII investments, Brassington told the seminar that after the Chinese occupancy of the Sanata Textiles Complex in Ruimveldt came to an end in 2006, the government decided to tender for investment proposals.
The advertisements for the proposals were issued in December 2006 and ran until February 2007 after it was extended from January.
He also added that given that there was no suitable response from investors, at that time the government approached QAII to formulate a proposal.
In May 2007, QAII submitted its business proposal which the Privatisation Unit approved that very month. On May 15, 2007 Cabinet approved the lease proposals.
Brassington also admitted that what was advertised and the negotiated deal were different.

However, to regularize the deal with QAII, the government moved to amend the legislation contained in the Fiscal Enactments Act. This Act was subsequently amended in the National Assembly after several hours of lively debate, especially in the context of the QAII deal involving the Sanata Textile Complex in Industrial Site, Ruimveldt.

Stinking
“It stinks to high heavens…Officials should all be charged and placed in jail…If a Minister breaks the law then there must be a price to pay,” were some of the sentiments expressed during that debate.
The then shadow Finance Minister, the late Winston Murray, during that debate had pointed out that the legislation only went to the House in the wake of sustained criticism of the grant of the concessions to QAII.
“What is our concern is the granting of concessions that were illegal and had no place in the legal system…this law seeks to cover some aspects that were done outside of the law,” Murray had said.
One of Brassington’s critics, Chartered Accountant and Attorney-At-Law, Christopher Ram, said that if the NICIL boss “is so clean” then these are several simple questions that he should be able to answer easily.
Christopher Ram charged Brassington to inform the nation why it is that the entity has not been filing annual reports or annual tax returns. He sought to get answers also as to why Brassington has not been facilitating the laying of the audited accounts of NICIL in Parliament.
Ram also charged Brassington to say why the agencies which he heads and are under intense scrutiny, have not been keeping their public records up to date.
The accountant said that Brassington sat at the helm of a vehicle that has seen the diversion of state resources away from the Consolidated Funds. These are being utilised in a manner not consistent with the objectives of NICIL, according to Ram.
Brassington also spoke of the Auditor General’s Office being empowered to audit the books of PU/NICIL. The most recent Auditor General Report to be tabled in the House as it relates to NICIL says   however: Inventories with a value of $1.177B were not subjected to a physical count at year end and the provision of $943.8M was based on a fixed percentage. (2002).
“Included in receivables due within one year was an amount of $1.323B which represented receivables of the Guyana Oil Company Limited (GUYOIL).”
However, it was noted that no provision was made for the sums of $573.480M and $309.155M,
Representing receivables from GPL and GEC respectively, which were included in the total amount shown. (2002)
Share certificates in support of the amounts shown as Stated Capital in respect of the Bauxite Industry Development Company, Guyana Pharmaceutical Corporation, Guyana National Newspapers Limited for 2009. Share certificates for National Edible Oil Company for both years were not presented for audit examination.
As it relates to privatisation proceeds, between 1994 and 2007, in excess of $23 billion was realised from the privatisation of public companies and real estate. But not all of the monies came directly into the revenue coffers.
Brassington, when asked about the deposit of the $360 million accrued from the sale of a plot of land to John Fernandes Limited, said that the money went to NICIL, a government holding company.
When monies go to the public treasury, Parliament must decide on its release. However, when it goes to another fund, there is no need for Parliamentary intervention.
Critics
Only recently, too, while speaking on the issue of Brassington and NICIL, financial point man for A Partnership for National Unity (APNU) and former Finance Minister, Carl Greenidge, who is one of the key architects in establishing the holdings entity, said that NICIL was never meant to be a “slush fund” for the government.
The former Finance Minister was also adamant that APNU will be pushing for an investigation of all NICIL’s operations and especially in relation the disposal of assets in the time of Jagdeo’s Presidency.
He said that one of NICIL’s roles was also to assist the Minister of Finance in formulating policy on how the assets would be managed.
Greenidge was adamant that NICIL was “not envisaged as a slush fund or an entity to hand over state assets to friends, cronies and associates of the PPP party or anyone else…It was supposed to be managing assets in a manner consistent with the national interest.”
Brassington in his missive to the state-controlled media, said that he and the entity he runs have always been open to scrutiny by inter alia, parliamentary bodies.
Immediate past Chairperson of the Public Accounts Committee, Volda Lawrence said that Brassington has never appeared before that committee to provide any explanations on any expenditure.
She pointed out that for an agency to be brought before the PAC for further scrutiny, a report has to be tabled in the House but this was not done for several years.
Carl Greenidge recently warned that “if Mr. Brassington believes that he operated properly within the law then he has nothing to worry about.”
Alliance for Change Khemraj Ramjattan had also warned that Brassington’s resignation from PU/NICIL will not mean he will get off ‘scot-free’ and that he will be called upon to account.

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