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NICIL vs. Guyana Stores court battle…Brassington tenders investment proposal, faces further questions
Executive Director of National Industrial and Commercial Investments Limited, Winston Brassington formally
NICIL Director, Winston Brassington
tendered the proposal for investment in Guyana Stores Limited, (GSL) after he returned to the stand to face further questioning in the court battle between NICIL and Royal Investments Inc (RII).
The entity which owns and operates Guyana Stores Limited is facing court action by the Privatisation Unit/ NICIL for failing to pay the balance of US$2 million for the 70 million shares in Guyana Stores which the company acquired for US$6million.
The matter is continuing before Justice Roxanne George-Wiltshire at the High Court in Georgetown.
After tendering the document yesterday, Brassington faced further questioning from Senior Counsel Edward Luckhoo.
Luckhoo is representing businessman, Tony Yassin, the proprietor of Royal Investments Incorporated.
Under cross examination, Brassington noted that he was not sure that Royal Investments was not incorporated at the time the proposal was submitted.
Luckhoo then asked him whether in reference to the document tendered he would be correct in saying that there was a consortium of ownership at that point in time – one of those being Salmo Corporation, which was owned by Mr. Yassin.
Brassington replied, “Yes.” He noted that subsequent to the proposal, Royal Investments Inc. was selected as the preferred investor. He said that it was around 1999.
The Attorney then drew Brassington’s attention to a letter dated 7th June, 2000 addressed to Reeaz Khan
Guyana Stores CEO, Tony Yassin
(at the time a director of RII) and sent by him (Brassington). He was asked to read that letter for himself.
The attorney then asked the witness whether he agreed that the letter terminated the agreement between Royal Investments Inc. and NICIL. “No,” Brassington replied.
He however accepted that effective June 15, 2000; Royal Investments Inc. was no longer the preferred investor.
Brassington also agreed that negotiations with Royal Investments Inc. had been brought to an end, and had also ended the relationship with Reeaz Khan. He accepted that it was after June 7, 2000, that he met Yassin. When asked by the attorney about the negotiations between himself and Yassin, Brassington said that he “cannot recall.”
He later accepted that he had negotiations with Mr. Yassin as part of Royal Investments Inc. The NICIL director said that Reeaz Khan was part of those negotiations. He said that the meetings were held at the office of the Privatisation Unit.
Brassington said that he could not recall whether a letter on the matters was mentioned in that discussion to Royal Investments, but accepted that if he did write, the letter would be in the “bundle of letters” he has addressed to Yassin.
Yassin also returned to the witness stand for the continuation of his cross-examination by attorney Rafiq Khan. The attorney questioned the GSL owner about the sustainability and competitiveness of his business with regards to the Hire Purchase accounts.
The attorney pointed out that just a few doors away, there is Courts, the largest hire purchase business in Guyana. He then suggested to Yassin that GSL faces great competition from Courts in terms of hire purchase. The businessman accepted, but did not agree to the suggestion that Courts offers a wider variety of goods for Hire Purchase than GSL. Khan then suggested that down the road, there is the Singer Company, which to a large extent engages in the hire purchase business and also provides competition for GSL.
“There are also other businesses in Guyana which offer hire purchase business which provide some competition to GSL,” Khan pointed out. The attorney went on to note that based on the exhibits tendered between 1997-2000, GSL had seen a decline in business due to the hire purchase competition.
Yassin said that this was so to some extent. He did not agree, however, with the suggestion that Royal Investments Inc. was not able to introduce any innovative measures to recapture the hire purchase business in the last 14 years.
“When Royal Investments Inc. took over GSL in 2000, the employees were given the option of staying on with GSL or take their severance and leave. Would you agree with me that a large number opted for the severance?” Khan asked
“Yes.” Yassin replied, but he noted that GSL was owned by the Government at the time, therefore, they had to bear the cost.
The matter has been adjourned until March 23.
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