CH&PA wanted free rein on $3B GGMC loan – documents reveal

Jun 10, 2015 News

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Details are emerging over the attempts by the former Government to transfer $3B from the Guyana Geology and Mines Commission (GGMC) back in January.

The High Court in early May had blocked the GGMC transaction with the Central Housing and Planning Authority (CH&PA) ruling that the loan agreement struck to transfer the money was null and void.
Documents now reveal that CH&PA had wanted restrictions lifted on the money, allowing the entity to use it for other purposes.
The proposal had sparked protests and criticisms that the transfer was highly unlawful.
Opposition members had accused the PPP/C of wanting the money to run its elections campaign.
In mid-January, days before announcing May 11 date for general elections, the previous Government under the People’s Progressive Party/Civic (PPP/C) in a Cabinet decision informed GGMC that it had approved a $3B loan.
The money was said to be for CH&PA to invest in the housing sector.
The Cabinet of Ministers, after facing flak, then amended the approval on March 3, saying that the loan was to support CH&PA for housing projects in mining communities.
However, the transaction became public knowledge not only because of the huge amount involved, but the fact that it was highly unusual.
Former Opposition Member of Parliament, Desmond Trotman, and CH&PA’s director, Ranwell Jordan, took the matter to court, with GGMC engaging law firm, Cameron and Shepherd, to offer its advice on the legality of the transaction.

The law firm, through attorney-at-law Ralph Ramkarran, S.C, in early February, cleared the loan.
However, a purported correspondence dated February 27 and addressed to Natural Resources Minister, Robert Persaud, by GGMC’s Chairman, Clinton Williams, indicated that CH&PA wanted a deletion of conditions in a revised loan agreement which blocked it using it to do other things with the money.
NOT ME!
Updating Persaud on the transaction, Williams disclosed that the Commission on January 29, 2015 approved the loan in principle. A draft loan agreement was returned to CH&PA for revisions and amendments.
GGMC demanded that CH&PA submit a repayment schedule, a loan guarantee from the Ministry of Finance, and a detailed loan investment proposal. But by February 27, CH&PA, which is the body charged with Government’s housing development, had failed to submit the requested documents.
Williams told the former minister that GGMC’s Board of Directors was not budging from its stance on the requested documents. Williams insisted that he was not an executive chairman and it would be virtually impossible for him to deviate from the mandate of the Board.
He said even if he approved the transaction with the Board’s authority, the $3B transfer could be rejected by the Commissioner as it would be illegal.
“The signing of the agreement by me would mean that I am engaging in an action that is not sanctioned by the board, illegal and could have adverse effects on my reputation, credibility and integrity with the end result being a loss of confidence of the Board of Directors,” Williams said in his correspondence to Persaud.
GGMC and CH&PA in a joint statement issued a month before (in late January) on the $3B transfer, said that the money was to be used for allocating 30,000 lots under the Adequate and Affordable Housing Programme in several areas on the East and West Demerara.”
GGMC, which reportedly spent over $7M in legal fees asking for legal advice, had reportedly approached Senior Counsel Edward Luckhoo and former Attorney General, Sir Shridath Ramphal, for advice, but they declined, citing conflicts of interest.
GGMC then settled on attorneys-at-law, Sir Fenton Ramsahoye and Timothy Jonas.
Independent Body
In his March 18th opinion, Sir Fenton pointed out that the Commission is an independent statutory corporation with its own legal personality and powers. It is not a creature of the Cabinet. While the Cabinet can make recommendations, the Commission is not obliged to be directed.
“The Cabinet directive of March 3rd, 2015 cannot lawfully impose an obligation on the Commission to transfer $3B out of its funds and resources to CH&PA.”
“The Cabinet as an institution is responsible for the general direction and control of the Government, but when Parliament in its wisdom has removed control from Central Government and vested it in a corporation of its own creation, the Cabinet cannot govern or engage in acts of governing the Corporation.”
He noted that once transferred, GGMC would have lost control and ownership on the money.
The transfer of the money as requested by the Cabinet in effect would make GGMC a mere rubber stamp.
He said that the transfer would have lacked legality and left the Commission at risk and liable to be made to account for the money.
“I am therefore of the opinion that the Cabinet decision of March 3rd, 2015, contravenes the principle of legality and the Commission cannot lawfully implement it,” Sir Fenton said.
On his March 19 advice, attorney-at-law, Timothy Jonas, of De Caires, Fitzpatrick and Karran law firm opined that from the two decisions by Cabinet, it can be deduced that the real purpose of the loan is not the advancement of mining.

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