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Luncheon mum on profitability of GT&T shares sale
Two years after Government sold its 20 percent shares in Guyana Telephone and Telegraph Company (GT&T) it remains tight-lipped about the financial transaction.
Cabinet Secretary,
Dr. Roger Luncheon
Cabinet Secretary Dr. Roger Luncheon during his weekly post-Cabinet press briefing at the Office of the President, yesterday, would not reveal whether Government received the outstanding US$5M from the US$30M deal. He also declined to comment on whether Government’s decision to place the proceeds of the sale in the National Industrial and Commercial Investments Ltd (NICIL)’s coffers was a profitable one, earning more than the annual US$2.5M in dividends.
According to Dr. Luncheon, he would not be specific as to whether all the monies were received but assured that all the proceeds that were earned from the sale of the shares are retained in the coffers of NICIL.
The shares were reportedly bought by a Hong-Kong-based company, Datang Telecom Technology and Industry Group.
Dr. Luncheon said it would be easier to say where Government has the money than to say who bought the shares. However, he believes these disclosures might have been made before.
“I think I can ascertain who the purchaser of the shares was or is, but you may recall there was some controversy about the uses to which those funds would have been put and my understanding is that they have remained in the coffers of NICIL, unspent and probably uncommitted and remain in the coffers of NICIL,” he said.
The controversy, the Cabinet Secretary speaks of, is accusations of Government investing US$20M in the construction of the Marriott-branded hotel in Kingston through NICIL. It is argued that a portion of the US$25M from the shares was used by NICIL in the venture.
In November 2012, leader of the Alliance for Change Khemraj Ramjattan accused the government of being secretive despite the hefty sum involved and the importance of the transaction. He had said that the proceeds are reportedly being used to illegally fund the Marriott Hotel in Kingston – something that Government would not confirm.
“The money should be placed in the Consolidated Fund, the account for all of Government,” the AFC Leader said.
Even with this appeal, two years later the money is supposedly still in NICIL’s coffers.
“It is not sitting idly gaining no interest,” Dr. Luncheon said. “When a customer puts money in the bank, the bank owners spend that money gaining an interest. That interest allows the bank owner to pay the customer an interest and make a profit.”
According to the Cabinet Secretary, similarly, Government has put the proceeds in NICIL as an investment. He said Government would not have put the proceeds in a non-interest account. The money is in a fixed deposit.
From Dr. Luncheon’s explanation it could be deduced that Government placed the proceeds into NICIL giving the holding company money to invest, probably in the hotel or another venture. Essentially, the money or interest earned would be paid to Government and also make a profit for NICIL.
The sale of the shares was also looked at as a means by Government to liberalise the telecommunications sector.
Ramjattan had said, “While we support liberalization of the telecoms sector and we are also supportive of privatization of certain sectors, the small band of individuals must stop the abuse of state funds.”
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