NICIL vs Guyana Stores…Brassington tells court he had to reduce net current assets, to avoid buyer’s windfall

Oct 01, 2013 News

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By Latoya Giles

As the trial between the National Industrial and Commercial Investments (NICIL) and Royal Investments continued yesterday Mr. Edward Luckhoo continued his cross-examination of Winston Brassington.
Luckhoo dealing with the Audit report noted that no reference to the word Guarantee or Assumptions can be made from that Audit Report (NICIL #6) from the Auditor General.
Luckhoo said that a preliminary report was done and circulated to Brassington and Mr. Tony Yassin of Royal Investments by an accompanying letter sent by Mr. Wilson.  That letter was dated November 27, 2000 re Draft Audit Report. As the witness was questioned about the documents, he kept repeating “I don’t recall”.
Brassington was asked to read a copy of the letter. He said that he could not recall, but that he had no reason to doubt that he had received it. The lawyer then asked Brassington if he would agree that Mr. Yassin expressed his concern with respect to obsolete and slow-moving stocks. Brassington again could not recall.
The witness was then asked if he would agree if there is a right for the party to express concern under the Agreement. Brassington replied, “Subject to the agreement, Yes”.
Luckhoo further asked Brassington whether he could recall that Mr. Yassin on December 7, 2001 wrote the Auditor General a letter which was copied to the Prime Minister and yourself.   Even though a copy of the letter was shown to Brassington, he said that he did not recall the letter “specifically” but would not doubt it. That letter was later tendered into evidence as NICIL #32.
Luckhoo then asked Brassington to look at the letter, and to see if it was fair to say that Mr. Yassin was expressing disagreement with the statement of the Net Current Assets.  Brassington replied in the affirmative.
Luckhoo asked Brassington if he was aware that the Auditor General responded to Mr. Yassin’s letter. Again Brassington could not recall. The lawyer then pointed out that after Mr. Yassin had raised those issues, whether it would be correct procedure that a meeting be convened to address the concerns raised by Mr. Yassin? Brassington said that it would be one method of addressing the issue.
The witness was asked if he was aware, whether a meeting was convened to address those concerns raised by Mr. Yassin, Brassington said he could not recall. Luckhoo then asked Brassington if he had no specific recollection of attending such a meeting. The witness replied, “No”.
Luckhoo further asked Brassington if he recalled receiving a letter dated 21st January, 2002, regarding a meeting to discuss the Findings of GSL Net Current Assets Audit. Brassington said that he could not recall receiving the letter. The witness was asked if he had any reason to believe you did not receive that letter, and a copy of the letter was shown to Mr. Brassington.  Brassington replied, “No”.
Mr. Luckhoo then pointed out to the witness that the letter in the first Para. speaks of a request for a deferral of a meeting set for January 22, 2002 to discuss the findings of the GSL Net Current Assets Audit. The letter dated January 21, 2002 was tendered as NICIL #33.
Mr. Brassington was asked to read the first Para. of the letter, following which Mr. Luckhoo asked, “Now that you have seen a reference to the meeting, do you recall that such a meeting was set”.  Brassington said that he could not recall.  He said that there were several meetings with Mr. Yassin after the closure of agreement.
Attorney for NICIL and the Government Rafeek Khan in his reexamination asked Brassington if between the period – that is, the date of advertising – and the date of confirmation of the Preferred Investor if any dividends were paid.  Brassington replied, and said  that he was “not sure”.
Khan asked if prior to the signing of the Share Sale Agreement, was any Dividends paid. Brassington, in reply, said that various Dividends were paid in 2000. Khan noted that at the time of payment of the Dividends, Royal Investments Inc had not purchased the shares in GSL.
The lawyer then pointed out that it was stated that Dividends of $542M was paid in 1999.  Also a loan of $300M was taken.  Profits for Year 1999 were $51M.
The witness was further questioned about a letter written by Mr. Manniram Prashad – the Chairman of GSL in which Brassington said that they were taking steps to reduce the Net Current Assets of GSL.
He further told the court that at the time, GSL’s Net Current Assets was $600M and had we not reduced the Net Current Assets, we would have sold the Company and given the buyer a wind fall.  Brassington said that he could have been accused of giving the Company away.
NICIL and the Government of Guyana are suing the Guyana Stores Limited (GSL) majority shareholder, Royal Investments Inc, to recoup monies claimed following the privatization of the company.
NICIL/the Privatisation Unit moved upon claims that GSL failed to pay an outstanding balance of US$2 million of the purchase price of US$6 million for the acquisition of GSL. The matter was subsequently called up before the High Court in the latter part of 2010.

 

 

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