APNU Parliamentarian Desmond Trotman has moved to the courts asking whether the US$25 million received by government from the sale of its GT&T shares qualifies to be paid into the Consolidated Fund rather than being in the coffers of National Industrial and Commercial Investments Ltd (NICIL).
In court documents filed last week by a battery of lawyers led by Senior Counsel Rex McKay, Trotman said that the money was collected by NICIL as “agent for the government” and “must be paid by NICIL into and form one Consolidated Fund.”
In the originating summons, the court was asked to determine whether the US$25 million collected and the balance to be collected by NICIL from the sale by government of its 20% shareholding held in the GT&T is money “raised” by the government which NICIL must forthwith pay into and form one Consolidated Fund pursuant to Article 216 of the Constitution and Section 38 of the Fiscal Management and Accountability Act.
The court is also being asked to determine whether NICIL has any legal authority to retain any part of the money it collected and the balance to be collected from the sale of the shares for “the purpose of defraying expenses pursuant to Article 216 of the Constitution or whether NICIL must await the payment of its expenses until they are approved by Parliament pursuant to Article 217 of the Constitution.”
Trotman is also seeking a declaration that pursuant to Article 216 and Section 38 of the Fiscal Management and Accountability Act, NICIL and its Chief Executive Officer Winston Brassington are bound to pay forthwith upon its receipt into the Consolidated Fund the sum and the balance to be collected by them from the sale of the shares.
NICIL, Brassington and the Attorney General are named as the defendants in the matter.
In his affidavit in support of summons, Trotman stated that NICIL was incorporated by the Government of Guyana on July 18, 1990 as a private company limited by shares under the provisions of the Companies Act, Cap. 89:01 and continued under the Companies Act, 1991, Act No 29 of 1991 and is defined by Section 344 as a government company.
He said that at the time of NICIL’s incorporation in 1990, 100% of its shares were allotted and issued to the Government of Guyana and that at the time NICIL was not incorporated by an Act of Parliament as an “authority” within the meaning of Article 216 of the Constitution.
It was also noted that in November 1990, GT&T was incorporated as a private limited liability company under the provisions of the Companies Act and the following year the government acquired for valuable consideration 4,125 shares or 20% of the shares of GT&T. The said shares were allotted to and registered in the name of the Government of Guyana and were the property of the citizens of Guyana, the court document stated.
Mention was also made to reports published by the Government Information Agency (GINA) and the Stabroek News about the sale of the shares and of U$25 million from the sale of the shares going to NICIL, respectively.
Trotman said that following the advice of his legal team, he believed that NICIL is “an agent of the state” and collects on behalf of the government and citizens of Guyana “large sums of money” from the sale of state lands, other state assets and dividends from other government-owned companies, which are other moneys raised or received on behalf of Guyana within the meaning of Article 216. He further stated that NICIL has a constitutional duty pursuant to the Constitution and the Fiscal Management and Accountability Act to “fully and promptly” pay into the consolidated fund all monies collected from these sources, including the US$25 million already collected by NICIL on account of the sale of the GT&T shares and the balance of US$5,000,000 due thereon to be collected.
He stated that according to Section 38 of the Fiscal Management and Accountability Act, all “public monies” received or received by government must be paid into the Consolidated Fund except monies credited to an extra budgetary fund and monies credited to a deposit fund. That money which is paid into the Consolidated Fund, which shall be managed by the minister or an official delegated by the minister can only be withdrawn if the conditions laid down in Article 217 and Section 16 of the Fiscal Management and Accountability Act are satisfied.
Further, he contends that Article 217 provides that no monies shall be withdrawn for the Consolidated Fund except to meet expenditure that is charged upon the Fund by the constitution or any Act of Parliament; where the issue of those monies has been authorized by an Appropriate Act or under Article 219.
When asked what had motivated government to dispose of its GT&T shares, Head of the Presidential Secretariat Dr Roger Luncheon had said that US$30 million was a lot of money even though the government was receiving a little over US$2 million a year from the telephone company in dividends. Government had retained 20% of the shares when it sold 80% to GT&T’s parent company ATN in 1991.
Since 1999, the Government of Guyana has received more than $35 billion in consumption, corporation and value-added taxes and sector analysts have said that these payments make GT&T one of the more profitable investments ever undertaken by the Government of Guyana.
