Former Finance Minister Winston Jordan says that hostility from the Chinese contractor for the Marriott Hotel when government tried to get information on it could have possibly delayed auditing of the annual financial records but it is now up to state holding company NICIL to declare what is reflected in its records on the hotel’s balance sheet.
With records showing that Parliament in 2017 received the last financial report for the Marriott Special Purpose Company, Atlantic Hotel Inc (AHI), which was for the 2014 fiscal year, questions continue to mount on why the public has faced a seven-year blackout on the financial status of an entity that was built with state funds. The hotel opened in 2015.
“It was difficult trying to get what was owned by the Marriott because it was under the influence of the Chinese contractor (Shanghai Construction Group). It was touch and go. AHI did not have complete control over the Marriott. That is missing from the [Stabroek News] reports,” Jordan told the Sunday Stabroek last week. The APNU+AFC government had clashed with Shanghai Construction Group over several aspects of the construction and the handing over process.
“We could not also have sold the hotel without all the assets and liabilities and we were prevented from understanding that because the Chinese were in the hotel and the hotel was never handed over completely to the government. If you have an asset that you control and everything else, without all the challenges that we had you could have called in your auditors, your valuators and what not and what not, get a true price and can go out for a request for proposal or for tender. We could not do those things,” he added.
Jordan drew comparison to the similar difficulty in obtaining the remaining monies from government’s shares in the Guyana Telephone and Telegraph (GTT) which helped fund the Marriott to show the challenges faced when dealing with some Chinese businesses.
“When we (APNU+AFC) came in, our 20% of GTT was sold to a Chinese company (Hong Kong Golden Tele-com Company Limited) and we had the devil’s own job of trying to get to this money. When we came out we had won a case in court to sequester the dividends of the Chinese company and up to when we came out we had gotten back all the money…. The man who they sold to, he paid all of US$5M and he claimed he paid off the remainder before we came in [to office in 2015]. We had the devil’s own job to get that and until we got to sequester his dividends, only then we got some,” he said.
Former Auditor General Anand Goolsarran had pointed out that examination of the Auditor General’s report for 2018 indicated that the audit of AHI’s accounts for 2015 was completed and the related report issued. Similarly, his 2019 report indicated that the audit of the 2016 accounts was also completed and the related report issued.
He pointed out that “These audited accounts are required to be laid in the National Assembly within six months of the close of the financial year, but it is not clear whether this was done.”
Performing
A loan contracted by AHI to build the Marriott has had to be removed from its books as the hotel’s revenues are insufficient to service it. Critics say that the public should be able to inspect the financial reports to examine how the hotel is performing as the former PPP/C government had been adamant that it was a feasible project.
Jordan explained that when the financial reports are completed they are given to the subject minister and then handed to Cabinet after which they are sent to the National Assembly to be laid.
He said that while he cannot recall specific dates for the last reports he received, he is confident that all the information he collected went to Cabinet and when the examination was complete they were passed to Parliament if required.
The former Finance Minister reasoned that whatever date parliamentary records show as the last for receiving reports on AHI, it would mean that was the last report he had gotten and given to Cabinet.
“Whatever would have been given to me by NICIL was sent to Cabinet and then forwarded to Parliament. If Parliament only have records for then it means I would not have gotten anything else,” Jordan said.
Checks by Stabroek News at the Parliamentary Library show that it received the Auditor General’s report on AHI for the fiscal year 2014 in 2017 and that a report was laid in the National Assembly right away. “That is all that we have on record,” the Assistant Clerk of the National Assembly said. Stabroek News is unaware of whether this report was circulated and distributed to the media.
Jordan said that the onus now lies with the Auditor General to produce the reports and to press NICIL for the information he needs. He said that he doesn’t believe there is a blackout on information since NICIL has never said it did not have what was asked for.
“It is the Auditor General. He has information but he requires additional information from NICIL. He has said he has information up to 2019 but required additional information from NICIL. So the records are not missing. They are with the Auditor General,” Jordan said.
“Also, NICIL hasn’t said they don’t have the record. All they have said is they are not talking to you [Stabroek News]. You have gone to NICIL and they have refused to answer you. That is the area you need to look at,” he said.
Told that even when NICIL was under his government’s administration no specific financial details were forthcoming on AHI, Jordan maintained that NICIL’s administration now has the information needed. He said, “NICIL is a continuous organization. It is not as if administrations change you start over. It is a continuous administration. Therefore, the new administration ought to give the history of it as long as the history is unvarnished. The history is unvarnished. You [NICIL] answer the best you know how.”
Not forthcoming
Auditor General Deodat Sharma says that auditing of the financials of AHI for the years 2016 to 2021 is ongoing but his office is not to be blamed for the seven-year blackout as the process was delayed because the documents it had requested from NICIL were not forthcoming.
“We are at about 2017. In the 2020 report you would be able to see that under NICIL. It [the process] was delayed and it was delayed under NICIL’s part not producing the information for the queries that we had,” Sharma told the Stabroek News two weeks ago.
“We would have sent queries and they took a long time to answer and rectify those. I could remember one of the issues was the assets register and the accountant at Marriott was to put all of those together. They took a while to settle those queries. We only had years 2015 and 2016 if you didn’t close 15 and 16 you can’t move on. That was the issue there. 2015 and 2016 took quite a while,” he added.
Sharma explained that from 2015, the process of auditing for the special purpose company that NICIL set up for the Marriott Hotel hit a snag because the APNU+AFC government had requested that a forensic audit be completed.
“The audit was done through NICIL. It is a joint company arrangement. They had to prepare the accounts and they delayed the issuing of it for quite some while.”
That audit was undertaken by former Auditor General, Anand Goolsarran, who had advised that the Marriott Hotel be sold.
This newspaper has reached out to current head of NICIL, Radha Krishna Sharma, given that his agency is the parent company of AHI. Sharma, however, said that he would not comment. Asked if he was not concerned about the affairs of its subsidiary, an agitated Sharma had responded, “I have treated your questions with respect and answered that I do not want to answer. Let us not go further than that.”
Goolsarran has said too that the APNU+AFC government erred in not selling the Marriott Hotel and the current PPP/C administration should.
Jordan said that not getting the information on assets was one issue why the hotel could not be sold.
“Mr. Goolsarran continuously said that we should sell it…if we had gotten a good deal we would have sold it. The fact that we did not sell it means we did not get a good deal. People saw the hotel when we came in as a fire sale. There is no way we could have sold the hotel under those circumstances,” he said.
“It is not as if we wanted to keep the hotel. We said very clearly, if we got a good price or good deal we would dispossess ourselves of the hotel. Our government was not in the business of owning business. We said that very plainly,” he added.
The decision under the PPP/C government to build the Marriott had been mired in controversy and the issue now is to determine if could be financially viable as is or should be sold. With more top-end hotels being built and the hotel beginning to age, observers say that the Marriott will struggle to attain sufficient occupancy.
