The Guyana Gold Board (GGB) is currently investigating allegations made to the Minerals Grievance Platform (MGP) that local large-scale gold trader, El Dorado Trading is connected to illegally sourced Venezuelan gold, a claim the company denied vehemently yesterday.
Meanwhile, following the allegation, the Royal Canadian Mint (RCM) has suspended the intake of El Dorado gold from the GGB until further notice.
El Dorado yesterday rejected the allegations which were filed with the MGP, saying that there is not “an iota or ounce of truth to the claims” and that the investigations will not only vindicate it, but show how easy it is for not only a company’s name to be tarnished, but a country’s entire sector put in fear of blacklisting because of “haters or fear of competition”.
“The matter is being investigated by the Gold Board,” Chairman of the Gold Board and Bank of Guyana Governor Gobind Ganga told Stabroek News yesterday when contacted for comment.
El Dorado Trading is a Guyana Gold board client while the GGB is a customer of RCM. As such, complaints from the Mint have to be registered with the Gold Board here.
It has been noted that El Dorado Trading is the only local company which supplies gold to the Gold Board that is then supplied to the Canadian Mint.
Chief Executive Officer of El Dorado Trading, Tamesh Jagmoghan told this newspaper yesterday that he was not worried and that anyone could file a grievance but that when such action is taken, it not only puts a business establishment under a negative spotlight but the country could be impacted. He said he would hope that when the investigation is completed and his company’s name is cleared, a lesson would be learned by the person or persons who filed the grievance about the implications it could have.
“Totally untrue! There is no trace, not the slightest … that Venezuelan gold is seeping into our supply chain. We welcome the investigation because we are confident that the public will see this as just what it is,” Jagmohan said.
But he said he understands that given global standards and protocols that the Mint would procedurally put on hold any acceptance of metal from a company whose name has been tied to a severe complaint such as trading with sanctioned Venezuela.
Following prior correspondence and calls between the RMC and the Guyana Gold Board about allegations levelled at El Dorado, the RCM wrote to the General Manager of the Gold Board, Eondrene Thompson, on August 19 informing of the suspension of El Dorado gold.
“Further to our letter of August 13th 2020 and our call earlier today, this letter is to inform you of the latest developments related to allegations leveled against El Dorado and the Mint’s response,” the letter, signed by Andrea Kniewasser, Director, Regulatory Affairs (Compliance), stated.
LBMA
It continued, “Last week, the London Bullion Mark Association (LBMA) contacted the Mint to advise that a grievance has been filed via the Minerals Grievance Platform (MGP) (of which the LBMA is a co-partner), connecting El Dorado to illegally sourced Venezuelan gold. Please be advised that the Mint is suspending any material from El Dorado coming into the Mint’s supply chain effective immediately and until further notice.”
The letter said that the Mint confirmed that all Advance Shipment Notices for GGB must continue to include the identification of all gold dealers and/or customers whose material comprises the shipment.
And from the correspondence, it seemed that the Mint had requested of the GGB compliance-related documents and information on any investigation underway.
“With respect to the outstanding compliance-related documents requested in our letter of August 13th as well as details of any GGB measures and/or investigations underway, kindly advise us when we can expect to receive the information as prompt attention to this matter is needed,” the letter said.
When contacted, the Gold Board General Manager told Stabroek News that she did not want to discuss the issue because of the ongoing investigation. “There is an ongoing process and I am not too keen on discussing the matter,” she said.
Questioned on her decision, she explained, “My discussing that will more than likely interfere with the process…it is a situation under review,” Thompson said.
Asked if the Board had discussed the matter, she said that she could not speak for the Board and referred the newspaper to Chairman Ganga. Ganga would only say that the investigation is ongoing and he too cautioned about the sensitivity of the issue.
Sources close to the investigation told this newspaper that from initial findings over the more than three-month period, there has been “no evidence to substantiate the claims” against El Dorado.
“No one has even seen any Venezuelan sell to the company. And if they did, they must come forward with the evidence. You have to understand that there is no way to really trace gold but common sense would show a lot things. Gold prices are currently high and local miners are finding the metal. This country doesn’t trade in U.S dollars that is needed for trade in Venezuela and Guyana currency is of no value there. These allegations are serious against this country also,” the source said.
Jagmohan echoed what the source said as he noted that his company has been in the gold and diamond business for over 30 years and would not risk being globally blacklisted or having this country blacklisted for trading with Venezuela.
“We have one of the most robust AML (Anti-Money Laundering) policies in place to ensure full compliance in this sector. We are in full compliance and we ship gold all over the world. The gold business predates Venezuela and no one here traded with them then so I don’t see how now. We have been in this for 30 plus years and have the most spread out gold dealership. Why would we put that at risk? We here in Guyana don’t need illegal gold because we can make the quotas. Prices are high and our people are working here, legitimately,” he said.
Jagmohan said that his company even hired a business advisory firm, Binder Dijker Otte to undertake an audit of the company and gave permission for the findings to be shared with the Gold Board and any other oversight body that may want to verify compliance.
“We were asked about our supply chain and that was why we did it. We have to do it and show that we can withstand scrutiny. We must be able to withstand any allegation because we understand the nature of the industry and there will be persons who would complain for one reason or another. We must be prepared to deal with this by law,” he added.
The El Dorado CEO said that he takes serious his company’s standing with the know-your-customer or know-your-client (KYC) guidelines and LBMA recognition. In financial services, KYC requires that professionals make an effort to verify the identity, suitability and risks involved with maintaining a business relationship. The procedures fit within the broader scope of a bank’s AML policy.
The LMBA is the de facto standard, trusted around the world for gold and silver credibility. It is a wholesale over-the-counter market for the trading of gold and silver, according to its website.
“We have a country to protect and should not allow a biased allegation to jeopardise what we have. We are very strict and know the repercussions,” Jagmohan stressed.
