Ramps Logistics Guyana tells court it could face ‘financial ruin’ without Local Content Certificate

Oct 22, 2022 News

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– Says 100 workers could be laid off

– US$$ Millions worth in contracts could be lost with a dozen or more companies

By Kiana Wilburg

Kaieteur News – Ramps Logistics Guyana Inc., a company with Trinidadian parentage, says it could face ‘financial ruin’ if it is not granted a Local Content Certificate by the Local Content Secretariat. In fact, the company said it would run the risk of losing a number of multi-million dollar contracts and left with no choice but to significantly downsize its operations.

The details of this state of affairs were outlined in its affidavit to the High Court. The company has asked for a judicial review of the Secretariat’s refusal to grant it the certificate and to place it onto the Local Content Register. In its submissions seen by Kaieteur News, the company said it believes the actions by the Secretariat were unlawful since it has complied with the letter of the law.

An affidavit by Samantha Cole, a 34-year-old Guyanese national who serves as the Logistics Director of the company outlined an account of exchanges with the Secretariat.

Cole said she was appointed to the Board of Directors on May 17, 2018 as Corporate Secretary. Given her positions, Cole has custody and control of key records of the company.

Cole said Ramps is engaged mainly in the provision of logistics services in the petroleum sector. It provides customs brokerage, freight forwarding, marine agency services, third party logistics, and immigration services.

She said on or about April 12, 2022, Ramps made an application for a Local Content Certificate of Registration and to be entered into the register as a Guyanese company. At the time of the said application, she said 51% of the issued shares of the Applicant Company had been issued to Deepak Lall, a citizen of Guyana. Mr. Lall, she said, was born outside of Guyana to a Guyanese father and was entitled to Guyanese citizenship by virtue of Article 44 of the Constitution of Guyana.

The other 49% of the issued shares of the Applicant Company were at the material time held by Ramps Logistics Ltd., a company incorporated in Trinidad and Tobago on June 25, 2001. The authorized share capital of the company was initially made up of 100 ordinary shares with a nominal value of $1 each.

On or about January 18, 2022, Cole said the Applicant Company amended its Articles of Incorporation to increase its authorized share capital and to create new classes of shares. The authorized share capital was increased from 100 to 10,000,000 ordinary shares and two classes of preference shares were created. To date, Cole said no preference shares have been issued by the Applicant Company to anyone at all.

Cole said the ordinary shares of the Applicant Company were valued by Independent Valuator, Mr. Krishendath Maharaj, on the basis of the financial position of the company as disclosed in its financial statements. The total value of the 1,000,000 (one million) shares that were issued to Deepak Lall, and which constitutes 51% of the issued shares of the company was given as US $1,000,000. Cole said, Deepak Lall paid for the said shares by way of transfer of funds from Scotia Bank, Trinidad and Tobago to the Applicant Company.

At the date of the application, April 12, 2022, Cole said there were 19 persons in executive and senior management positions in the company. She said 89 percent of these positions were held by Guyanese nationals. Cole said the Applicant Company supplied the Local Content Secretariat with a list of its executive and senior management employees which contained their names, national identification number, taxpayer identification number, NIS number, the position they were employed in, whether they were full-time or part-time employment, and their nationalities.

At the date of the application, she said Ramps had 128 employees in non-managerial and other positions, all of whom are Guyanese. Considering this standing, she said the company was in full compliance with the requirements of the Local Content Act.

DEALINGS WITH SECRETARIAT

Cole was keen to note that there was no prescribed form or list of requirements which had been developed by the Secretariat as at March, 2022. As a result, the Applicant Company wrote to the Director of the Secretariat, Martin Pertab, on the March 31, 2022 seeking guidance on the manner in which the application was to be submitted.

Following several exchanges, the company was asked on April 20, 2022 to provide the identification card for Deepak Lall, Articles of Incorporation, Notice of Change of Directors, a Director’s Consent from Deepak Lall, and Special Resolution of shareholders, among other documents.  Additional documents were also provided.

However, on June 8, 2022, Cole said a notice was sent to the company stating that its application was refused by the Minister. Its legal team asked for reasons for this. It was later told that the information provided was insufficient for proper compliance evaluation to be done by the Secretariat.

Court documents show that the reasons offered by the Secretariat for refusal to issue and/or grant a Certificate of Registration can be summarized as follows: the company only had an authorized share capital of 100 ordinary shares of $1 each, Deepak Lall and Ramps Trinidad had 51% and 49% of the total shares valued at US $1,000,000 and US $960, 000 US respectively. Citing section 28 (2) of the Companies Act and the absence of any amendments to support the change in the maximum number of shares, the Director of the Secretariat concluded that the Applicant does not satisfy the 51% beneficial ownership requirement under the Act. The Secretariat also flagged the absence of no Share Certificate or Share Register and related company resolutions to support the issuance of shares to Lall and Ramps.

Additionally, the Secretariat explained that the most recent annual return showing the allotment was not submitted and this was a requirement under section 153 of the Companies Act. Further, only a draft unsigned financial statement which did not set out total number of issued shares was submitted to the Secretariat.

It was also noted by the regulator that the Board of Directors was comprised of only 60% Guyanese Nationals and not 75% as required by the Act. Finally, the Secretariat said the Declaration of Beneficial Ownership did not show who the beneficial owner of Ramps Trinidad was, and that there was an inconsistency between the place and date of birth in the declaration and the Articles of Incorporation of Ramps Trinidad.

Ramps in response said the demands by the Secretariat were unlawful and not in keeping with its statutory powers. It said too that the specific requests for information listed as the grounds for refusal were not made to the applicant beforehand. Ramps said it also resubmitted all the documents cited as missing in the initial application. This was done in July.

Ramps also accused the Secretariat of actively discouraging persons from conducting business with it since it did not have a certificate.

Cole said during the period July to August, 2022, a number of customers of the Applicant Company  informed it that at monthly supplier meetings with the Secretariat they were specifically advised against using Ramps because it does not have the required certificate.

The Applicant Company she said was also informed by employees of Schlumberger Guyana and verily believed that they were instructed by the Secretariat not to use the services of Ramps Logistics. She said too that employees of International SOS, Baker Hughes, G-Boats, Frank’s International and CGX have also informed the Applicant Company that at various times and on various occasions they were told by the Secretariat to discontinue doing business with it (the Applicant Company).

Kaieteur News understands that several purchase orders of the Applicant Company submitted by Baker Hughes to the Secretariat were rejected, which encouraged Baker Hughes to re- tender its business.

Cole said the Applicant Company wrote to the Secretariat on August 30, 2022 enquiring if it had assessed the additional documentation it submitted and that time was of the essence. Cole said the Secretariat’s response was that it is delayed with a considerable backlog.

Ramps told the court at this point that without the certificate in a timely manner, it faces ‘financial ruin’. The Applicant Company said it has been contracted by two dozen or more entities operating within the petroleum sector, all of whom have threatened to cease doing business if it fails to secure the grant of the Certificate of Registration.

Ramps said almost all of its earnings are derived from the petroleum sector and if its application is not heard and determined on an urgent basis, then it is also at risk of being permanently deprived of tens of millions of United States dollars in earnings. The company said it will also be unable to sign a major US$25M contract with Exxon.

It therefore appealed to the court for an expeditious hearing which is set for November 11, 2022.

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