The Bank of Guyana (BoG) has applied to the courts for the liquidation of Globe Trust and Investment Company Limited (GTICL) after an investment deal for the troubled institution failed to materialise.
A High Court notice in yesterday’s Sunday Chronicle informed that the BoG had filed an application asking that an order be granted for the compulsory liquidation of GTICL as provided under Section 51 (b) of the Financial Institutions Act (FIA) 1995.
The notice said that GTICL and any other interested body or bodies are at liberty to show cause within 28 days of the second and final publication of the notice why the Orders applied for should not be granted. The matter has been adjourned to September 3 and will be heard by Chief Justice (ag) Ian Chang at 9:30 am.
Hundreds of small depositors were left in the lurch after the institution encountered trouble as a result of bad loans and other problems.
This move by the BoG signals that no investor has been found for the troubled financial institution. Up to March this year, the BoG was to decide whether to extend the deadline for a third time for a South American company to provide the required documentation in its bid to control GTICL or to move ahead with its liquidation. Earlier, on February 27 former GTICL administrator Conrad Plummer, during a press briefing at its Middle Street office, told the media that the lone interested investor had asked for an extension of the February 15 deadline to submit its application to Acquire Control of a Financial Institution, and this extension was approved.
However, the investor then sought an extension up to March. The February extension followed two missed deadlines on November 30, 2007 and January 24, 2008. Plummer had said that since he was not authorised to refuse the request, it was forwarded to the BoG for a response. Plummer noted that the next step would have depended on the answer to the investor’s request.
If the extension had been granted and adhered to by the investor and further agreement reached then the administrator would have seen the transaction through – which would have included an application to the courts to modify the existing approved plan under Section 51 of the FIA. However, if no further extensions were granted then the BoG would have needed to apply to the court again under Section 51 of the FIA to have a liquidator appointed and this is what it has now done.
GTICL began operating in April 1991 and was licensed in 1999 to conduct depository financial business with authority to engage in trust business. However, in 2000 and 2001 a series of inspections by the BoG found the institution to be in breach of the Financial Institutions Act, and the BoG, with the intention to liquidate, seized the institution in September 2001. The BoG later appointed an administrator in December 2002, after the Chief Justice ordered the re-organisation of GTICL under the BoG as set out in Section 50 of the FIA.
Several attempts thereafter to attract an investor failed.
