SARA case against QAII to come up for hearing next week

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Former Minister of Finance, Dr. Ashni Singh (left) and former head of the National Industrial & Commercial Investments Ltd. (NICIL), Winston Brassington

ON September 19, 2019, the State Asset Recovery Agency (SARA) will present its case before the High Court with evidence that pins former Winston Brassington-led National Industrial & Commercial Investments Ltd. (NICIL) with the alleged illegal leasing of the Sanata Textile Complex to Queens Atlantic Inc (QAII).

On the said date, the fixed date application filed by SARA against the company will come up for a hearing as the agency seeks a Civil Recovery Order for GY$2,701,619,960. The application was filed by Attorney, Ronald Bostwick, on behalf of SARA Director, Dr. Clive Thomas on August 22, 2019 on the basis that the sum was “wrongly denied to the people of Guyana” by reason of the unlawful conduct under the State Assets Recovery Act 2017.
On the set date, the applicant will present documentary evidence to Justice Diana Insanally of the affidavit of the SARA Director; the Cabinet decision of May 15, 2007; a letter from NICIL’s Chief Executive Officer (CEO) dated July 10, 2007; the minutes of the privatization board on October 18, 2010 and certified copies of the certificates of title passed to the respondent.

According to the document, NICIL wrongfully sold 18.871 acres of land on Plantation Ruimveldt, East Bank Demerara (EBD) to QAII. QAII, owned by Bobby Ramroop, best friend of Opposition Leader, Bharrat Jagdeo, was leasing the Sanata Textiles complex and entered negotiations for its purchase.

Queens Atlantic Investment Inc. being housed at the old Sanata Textile

The application indicates that the PPP Cabinet approved a formula for the terms of the sale that required a US$27M investment over three years and a sum of money reflecting a valuation of the property. However, the Winston Brassington-led NICIL, at the time, concluded the sale based on a formula suggested by the purchaser, resulting in an investment of just US$21M being accepted and QAII paying some GY$344.5M less than would have been payable further to the formula approved by Cabinet.

The Certificate of Title was passed to QAII and a Vesting and Transfer Order dated December 4, 2010 was made by then Minister of Finance, Dr. Ashni Singh.

“The [SARA] Director believes on reasonable grounds that the respondent obtained the said property by the unlawful conduct of NICIL’s then Chief Executive Officer at a gross undervaluation amounting to an unjust benefit to or enrichment of the respondent in the amount of G$2,701,619,960 with compound interest at 6.25 per cent annum over 9 years calculated,” the application states.

“NICIL through its then Chief Executive Officer breached its fiduciary duty to the State to first establish the true market value of the property at the time of sale in 2010 before entering into the Agreement of Sale and Purchase with the respondent.”
Whether intentional or not, the document presents that the breach of NICIL amounts to breach of the Law. The Cabinet decision document of May 2007, seen by this newspaper, shows that Cabinet approved that the Sanata Textiles Compound being privatised by QAII, under terms and conditions such as: – there would be a rent-free period of five years for the 6 acres printing and dying section; a 60 per cent reduced rental for the remaining 14 acres for the first five years and more.

The document also clearly stated that it provided for “an option to buy clause being contained in the lease, providing that the option is only exercisable after completion of the investment programme of US$27M and at a price determined by one or more acceptable valuers.”

The decision was signed by then Secretary to the Cabinet, Roger Luncheon.
This is not the first land scandal to rock the former People’s Progressive Party (PPP) Administration as the party’s current Presidential Candidate, Irfaan Ali is before the court, accused of defrauding the State of over $174M after selling the lands at undervalued prices.

The former minister of housing is accused of selling the lands to former President Bharrat Jagdeo; former Cabinet Secretary Dr. Roger Luncheon; and former ministers Priya Manickchand, Dr. Jennifer Westford, Robert Persaud and Clement Rohee; Director of Public Prosecutions (DPP) Shalimar Ali-Hack, and former army head, Gary Best and Fortune Developers Inc., Guyana.

He also sold lands at the locations to former General Manager of the Guyana Gold Board and daughter of former President, Donald Ramotar, Lisa Ramotar; former President of the Private Sector Commission, Ramesh Dookhoo; the son of former Labour Minister, Dr. Nanda Gopaul; Dr. Ghansham Singh; former Guyana Sugar Corporation (GuySuCo) Chief Executive Officer, Rajendra Singh; former president of the Caribbean Development Bank, Compton Bourne; Andrew Bishop, former Chief Executive Officer of the Guyana Lands and Surveys Commission; former Chief Executive Officer of the Guyana Water Inc. (GWI) Shaik Baksh; Safraaz Khan and George Hallaq.

After recently failing to secure a stay of the $174M ‘Pradoville’ land sales case, Chief Magistrate, Ann McLennan adjourned the matter until September 27, 2019.
Meanwhile, SARA has also filed proceedings against the Guyana Bank for Trade and Industry (GBTI) by Statement of Claim at the High Court for GY$274,117,404 for purchases GY$224M less than the most recent valuation of its headquarters outside the Pegasus Hotel in Kingston.

SARA has stated that its actions are in keeping with its mandate to recover, through civil proceedings, State property unlawfully acquired by a public official or any other person.