SARA files court action to recover US$16M from Queens Atlantic, GBTI

Sep 07, 2019 News

In what could be a test of the country’s capacity to handle sensitive matters involving state assets, the courts have been approached for the recovery of more than $3B.

The GBTI property in Kingston

The Sanata Textile property

Two companies, including a major commercial bank, have been named in the cases.
According to the State Assets Recovery Agency (SARA), which has power to go after properties that belong to the country, it has filed proceedings in the High Court seeking Civil Recovery Orders against Queens Atlantic Investment Inc. (QAII) by way of Fixed Date Application, and against Guyana Bank for Trade and Industry (GBTI) by Statement of Claim.
SARA explained that both claims in the court were made under the State Assets Recovery Act 2017 and are for the recovery of $2,701,619,960 and $274,117,404 respectively, including interest.
“QAII was leasing the Sanata complex and entered negotiations for its purchase. Cabinet approved a formula for the terms of the sale that required a US$27M investment over three years and a sum of money reflecting a valuation of the property.”
SARA noted in its statement yesterday that NICIL (the National Industrial and Commercial Investments Limited), a state unit charged with investments and privatisation, however, concluded the sale based on a formula suggested by the QAII, resulting in an investment of just US$21M being accepted and the company paying some $344.5M less than would have been payable further to the formula approved by then PPP/C Cabinet.
Sanata Textile is a sprawling compound in Ruimveldt Industrial Site that sits on prime property.
SARA is contending that QAII did not fulfill its investments promises yet benefitted from an additional discount. On the property, QAII built drug bonds, installed printing presses and is running a newspaper, Guyana Times.
With regards to the GBTI matter, the claims by SARA have to do with a piece of prime property at the Kingston seawall area. The bank has built its corporate headquarters there.
According to privatisation documents found by SARA, the bank had submitted the fourth highest of 14 bids in a tendering process. It was questionably awarded the right to purchase the property for $224M, less than the most recent valuation of the property at that time.
“Cabinet had determined that the valuation would be the basis of the floor price in the event of a sale of that property,” SARA disclosed.
SARA has been given significant powers to go after state properties that it believes are stolen or have ended up illegally in the hands of others.
The entity explained yesterday that the State Assets Recovery Act (SARA) mandates it to recover, through civil proceedings, state property unlawfully acquired by a public official or any other person.
“The Act provides for investigations leading to the granting by the High Court of Restraint and Civil Recovery Orders in respect of unlawfully acquired property. The Act also allows SARA to engage in international cooperation in the recovery of stolen assets of State that are outside of Guyana. The State Assets Recovery Act of 2017 was passed in Parliament on 13 April 2017 and assented to by President David Granger on Thursday 4 May 2017.”
It was pointed out that the State Assets Recovery Act is part of the Guyana government’s efforts to fight corruption.
The filing of the actions would represent the state’s most significant cases against private businesses.

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