The appointment of Nizam Ali and Company as liquidators of Globe Trust and Investment Company Limited (GTICL) is expected to be made shortly for the wind up to begin, formally bringing an end to the bankrupt institution brought down by the issuing of unsecured loans and other dubious practices.
Chief Justice (ag) Ian Chang recently issued an order for the compulsory liquidation of the company following a High Court application in June by the Bank of Guyana (BoG). The central bank is expected to meet on the matter and also make the formal appointment.
Nizam Ali of the accounting firm told Stabroek News on Wednesday that he is awaiting word from the BoG, but disclosed that once a formal appointment is made his company is ready to begin liquidation by following the procedure as set out in the Financial Institutions Act.
Under the Act, the liquidation would proceed with notices for claims first being advertised. The actual process would proceed firstly with the company covering any expenses it incurred including unpaid taxes, followed by any financial obligation it might have to the BoG. The deposits are then catered for, but only up to $100,000 each. Globe Trust has around 6,000 to 7,000 depositors.
Within the past month GTICL reached a $7M settlement with the Guyana National Industrial Company (GNIC) reimbursing the company for pension funds it had held in the capacity of a trustee. The company is currently in talks to settle in relation to another pension fund that it had held for its employees. GNIC had approached the High Court asking that Globe Trust return to it treasury bills, some Banks DIH shares and proceeds of two accounts held by Globe Trust at Citizen’s Bank; one of them being for $12 million; it was all returned and they agreed to settle for the $7M.
An attempt was also made by five depositors to intervene in the High Court hearing but the Chief Justice dismissed the application by attorney-at-law Roger Yearwood ruling that it had no merit since the time for the parties to apply to intervene had expired.
In June the BoG had filed an application asking that an order be granted for the compulsory liquidation of GTICL as provided for under Section 51 (b) of the Financial Institutions Act (FIA) 1995 after an investment deal for the troubled institution failed to materialise. It was the second such application – the first was filed in 2002. In 2002 numerous depositors had attempted to intervene in the case.
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.
Several attempts thereafter to attract an investor failed. Stabroek News was told that close to 87 investors had expressed an interest, but that no serious attempts were ever made to follow through with proposals.
The most promising in recent months had promised to inject funds into the institution but had not done so.
