…warns that State can lose $1B if Govt does not halt privatisation
-says move premature, calculated to benefit a strong APNU/AFC supporter
Government has recently advertised for sale NICIL’s shares in Guyana Stockfeeds Ltd. (7% ownership) in a move that the PPP views as pre-mature, highly suspect in terms of timing, and calculated to benefit one significant AFC/APNU political supporter and contributor, Robert Badal.
The PPP on Monday stated that it views the sale as an act of corruption, given the various pending court matters surrounding the NICIL ownership interest and related matters.
“Most notable is the fact that, in 2008, NICIL won a High Court case restoring its 38% shareholding in GSL, but since Mr Badal’s appeal, the case has languished in the Court of Appeal. Rather than resolving this matter and restoring its 38% shareholding, the Government’s sale of its current 7% shares (without the remaining shares), stands to deprive NICIL of its true value, worth over one billion dollars,” the PPP has stated.
According to that party, the “timing is also suspect”, since there has been little or no privatisations since the APNU/AFC took office.
“No announcements were made in the budget. It is not even clear if the Privatisation Board, appointed in 2015, is operating, and what’s the current policy of APNU/AFC on privatization. One only has to recall the 1992 World Bank report on the PNC privatisation era, which criticised the PNC programme as lacking transparency and accountability. APNU/AFC seems destined to return to this era,” the PPP posited.
“Under the PPP administration policy framework, all privatisations required the Privatisation Board and Cabinet’s approval. Today, the NICIL Stockfeeds share-sale lacks transparency and accountability, and is being pushed through without any clear institutional framework for privatisation. One can only assume that, rather than define the role of the Privatisation Board, and before waiting for NICIL to regain its 38%, the AFC/APNU Government is hell-bent on depriving the State of millions of US dollars, and granting, through the back door, an exit to the court matter that NICIL won over 10 years ago, but which has since been stuck in the Appeals Court, stranding hundreds of millions of potential Guyana dollars”, the PPP has said.
“The situation is further exacerbated by the fact that GSL is a publicly traded company, with court matters restraining the payment of dividends pending the NICIL court matter, and the Stock Exchange halting trading due to these same reasons. The APNU/AFC Government is ignoring settlement of these matters in rushing through a sale,” the PPP contended.
The PPP has said it views the proposed sale as intending to benefit Badal, and “considers this to be a matter of political influence and payback to Mr Badal”.
Why else will the AFC/APNU Government ignore the pending court matters where NICIL stands to regain its 38% shareholding, millions of dollars in pending dividends, and settlement of normal trading on the Stock Exchange before looking to sell its shares,” it queried.
The party noted that it is a well-known fact that GSL, although a publicly traded company, has been operated by Mr. Badal in a manner that is prejudicial to its minority shareholders, particularly the second largest shareholder, NICIL.
“Over the 20+ years since the privatisation to Mr. Badal of 35%, Mr Badal has quietly taken majority control of the company, and then used the company at the expense of its other shareholders.
At the genesis of NICIL “38% shareholding” are Badal’s efforts to undercut the Government shareholding in 2000, when it increased the authorised shareholding of GSL from 700,000 shares to 100,000,000 shares, or over 140 times.
The PPP maintains that it “views this sale as premature and aimed to support Mr. Badal, a strong AFC/APNU supporter and funder. If the sale proceeds, then NICIL/Government is likely to lose over G$1billion,” the PPP has declared.
The PPP calls on APNU/AFC to investigate the multiple court cases brought against Mr. Badal and objections filed with the Stock Exchange, and determine if Badal has abused his rights as CEO and Director of GSL. APNU/AFC should also investigate the transfer pricing used by Badal, when other major stockfeeds companies have been buying inputs at a much cheaper price that Badal.
The PPP calls this privatisation without a transparent valuation and without resolving the court matter an act of corruption intended to benefit a strong political contributor at the expense of the State.