(GINA)
Government Representative on the Board of Directors of the Guyana Telephone and Telegraph (GT&T) Company, Winston Brassington, yesterday said that Government has formally indicated to the Atlantic Tele Network (ATN) its intention to sell its 20 percent share in the local phone company.

Brassington made these remarks during an interview with the National Communications Network (NCN) following the company’s annual shareholders’ meeting.

“We formally indicated to ATN that we would like to sell our 20 percent share in GT&T and we are first offering it to ATN. Should ATN decline to buy our shares, we would then seek to sell it to third parties,” Brassington said.

He said Government has been contemplating this decision for a while now.

“We have indicated to ATN that if they wish not to buy our shares, then we reserve the right to sell it to third parties. GT&T is an extremely profitable company; last year the profit after tax exceeded $4B from the year before, so we believe that our shares are valuable.”

In addition to this disclosure, Brassington said that Government opposed the accounts of GT&T for last year on the basis that they did not consider the six percent advisory fee to be a legitimate expense.

Last year, he highlighted, following a number of questions on the advisory fee, Government abstained from voting on the accounts.

Brassington explained that the 1990 sale agreement with ATN and the Government of Guyana stated that management services may be provided by ATN or by its subsidiaries, provided that they are approved by the Board.

“We do not consider the advisory fees to be management services, because despite inquiries, they have not been justified as representing legitimate management services; therefore we can’t conclude that any of those payments represents value for services rendered,” he contended.

He said that Government views the advisory fee, which is quite significant, as a distribution. Within the last five years, Brassington said over five billion dollars in advisory fees has been paid, averaging over a billion dollars per year.

“The company’s revenue last year exceeded $19B, and if you take 50 percent of that in the last 10 years it has been approximately $10B, and since the privatisation of GT&T over $15B in advisory fees has been paid,” Brassington stated.

“We believe that the advisory fees should be treated below the line as the distribution. They would therefore not be eligible as a deductible expense, so taxes will have to be paid on the amount and The National Industrial and Commercial Investments Limited (NICIL), as a 20 percent shareholder on behalf of Government, would be entitled to 20 percent of that,” he said.