US$500M PetroCaribe rice deal…SOCU recommends contempt charges against GBTI directors

Oct 08, 2017 News

-Questions raised over bank’s presence on GRDB board

Directors of the Guyana Bank for Trade and Industry (GBTI) are facing contempt charges.

Former GBTI CEO, John Tracey, was also a director at GRDB.

The Director of Public Prosecution (DPP) will have to decide whether the bank, controlled by the Beharry Group, deliberately refused to obey the production orders of Chief Justice Roxane George-Wiltshire. The Judge, on August 29, last, ordered that GBTI hand over specific information within seven days.
However, by September 7, the bank was refusing to cooperate.
The police Special Organised Crime Unit (SOCU), the unit which investigates financial crimes, has been attempting to get information on wire transfers and other details since last February, regarding a US$500M investigation at the Guyana Rice Development Board (GRDB).
This US$500 million represented credit from Venezuela for oil supplied under the PetroCaribe arrangement.
The story started in 2015 when the Coalition Government, on entering office, ordered several forensic audits to determine the financial health of a number of state agencies.
One was conducted on GRDB, an agency which collects fees and regulates the rice industry. The audit found several worrying things and the file was handed over to the police for further investigation.
GRDB was the same entity which handled the lucrative oil-for-rice deal with Venezuela.
Under the deal hammered out in the latter half of the 2000s, Guyana got oil and in turn, supplied rice. Guyana would pay part of the oil money up front and the rest over a number of years to Venezuela.
GRDB arranged for rice, taken from selected farmers and millers, to be shipped to Venezuela.

SOCU’s head, Sydney James

GRDB also collected hundreds of millions in US dollars in delayed oil payment monies from the Guyana government to pay rice farmers and millers.
SOCU wants to know where and to whom some of these monies went.
SOCU reportedly found that strangely, one of the directors on the GRDB was the former Chief Executive Officer of GBTI, John Tracey. He resigned earlier this year.
What investigators reportedly found strange is why GBTI was chosen over the rest of the commercial banks to be a member of the GRDB Board.
In February, investigators reportedly asked GBTI for information on several GRDB accounts, including details of wire transfers.
While other banks were cooperating, GBTI seemed reluctant, claiming in some instances that records could not be found, or that software changes had caused the unavailability of documents.
The bank went further to state that some of the information was not certified and it would be useless in case of a court case.
In August, an exasperated SOCU applied to the High Court for orders asking GBTI to hand over the information.
On August 29, the Chief Justice issued the production orders, giving GBTI seven days to hand over the records SOCU had requested.
The bank was granted some extensions by the SOCU investigators after the court deadline passed. However, by then it was too late. GBTI informed the court that some of the information asked for had been destroyed under the anti-money laundering legislation which allowed for documents to be shredded after seven years.

DPP, Shalimar Ali-Hack

Investigators believed that GBTI deliberately dragged its foot on the matter, allowing the seven years to pass.
On Friday, GBTI’s last ultimatum elapsed.
Investigators are reportedly now pursuing the DPP to have the GBTI directors charged for contempt.
Last week, Government officials, while not naming GBTI, confirmed that they have received complaints of non-cooperation of a bank.
The matter was raised with the Ministry of Finance, which controls the Bank of Guyana- the regulator of the financial institutions.
The case is being looked at with much interest not only because of the US$500M involved; but also it is testing the waters of new anti-money laundering laws and the fact that a bank is coming under so much scrutiny.