As the end of the sixth year without an investor draws to a close, the 6,000 to 7,000 depositors of Globe Trust and Investment Company Limited (GTICL) will yet again have to wonder if and when the court ordered restructuring of the entity will be completed.
Investor Hywhey Investment Incorporated (HII) in June failed to meet the criteria set out by the Bank of Guyana (BoG), as regards a re-organization plan by GTICL’s court-appointed Administrator Conrad Plummer.
This newspaper understands from a source that since HII’s withdrawal another investor has shown interest in the entity and meetings were to be held with the BoG last week to discuss the next steps to be taken in this regard. Contacted yesterday, Plummer promised an update on the issue but that information was not forthcoming up to press time. It is not clear if the re-organization plan will be modified. In the absence of an investor, the entity would face liquidation.
HII fell out of the running, after it was given 21 days in a letter dated May 21, this year, to show in writing, why the administrator should not proceed under Section 51 of the Financial Institutions Act (FIA).
Section 51 of the FIA states that wherever in the consideration of the administrator, the re-organisation plan is deemed inequitable or requires changes, the BOG can move to the High Court to have the plan modified or to have the company liquidated.
The BoG had asked HII to transfer US$3.5M to Guyana by November 3, 2006 before its application was considered.
The request to transfer the money came after the BoG notified the investor that it was not favourably inclined to consider its application. But after representation by Plummer, the bank decided that if the investor transferred the US$3.5M to Guyana, it would consider the application. HII did not do this within the 21 days given, which ended on June 11.
The re-organisation plan had called for an immediate investment of US$3.5M (with US$1.5M for infrastructural work if necessary). This plan was approved in the High Court on February 7, and received no objections from the depositors in March.
In accordance with the FIA of 1995, the BOG seized possession of GTICL in September 2001 and applied for the company to be liquidated, after a breach of the FIA was found. But the court ruled for reorganization.
Before HII emerged as the potential investor, there were 84 enquiries, with approximately 55 termed “casual discussions” and the other 29 at different degrees of seriousness.
