Nizam Ali, the liquidator for Globe Trust and Investment Company Limited (GTICL), is in the process of settling with large depositors and based on funds recovered the payout is likely to be around 5% across-the-board.
Globe Trust’s 900 depositors who invested over $100,000 in the failed institution would receive what the liquidator described as “a dismal refund.” The liquidation law prioritises persons classified as small depositors, which meant those accounts had to be cleared first. “It is really bad but we are working with what we have,” Ali said on Tuesday, while noting that letters have already gone out to depositors. He said that persons are likely to visit his Camp Street office this week for the payments.
Some of the large depositors had invested close to $2 million dollars in the failed institution, but Ali emphasised that the discretion for the refund does not rest with his company. He observed that many of those persons who invested heavily in the company are not going to be happy with the cheques his office has prepared.
The law ranks priority in a particular order beginning with liquation expenses; unpaid claims for taxes; wages and salaries; fees due to the Bank of Guyana and deposits not exceeding an amount of $100,000 dollars followed by depositors over $100,000 dollars. The law also states that unclaimed monies are turned over to the general reserve funds established under the Bank of Guyana so depositors can go at anytime and claim the money. Ali pointed out that debt recovery is still poor, but insisted his company would pursue the existing court matters to the end; the majority of the court cases are against former directors of the institution, two of whom are now deceased. “We are going after them, the directors, [and] one in particular who owes Globe Trust a substantial amount of money,” Ali said. He was optimistic that some of the directors who borrowed big loans are going to repay the company when the court grants favourable judgment.
Matters had been filed against former Chief Executive Officer Stephen Backer; Jonas Sampson who is deceased; Peter Britton, who is also deceased and Loaknauth Persaud, among others.
Globe Trust’s debt collection has slowed despite attempts by the liquidator to reclaim some of the $750 million handed out in unsecured loans; the majority of Globe Trust debtors have ignored repeated calls by Ali to repay, and only a tiny fraction of the funds has been recovered.
Chief Justice (ag) Ian Chang granted an order in September last year for $45M to be made available for payouts to small depositors. Some 3,050 persons were on register and classified as small depositors.
