NICIL uses same modus operandi it did under PNC
–‘We haven’t changed anything since then’
In the wake of widespread opposition-led criticism, and charges of corruption and other alleged malpractices at State-owned National Industrial and Commercial Investments Limited (NICIL), a decision was taken to kick off the fledgling televised programme, ‘Inside the Government’, by featuring the company’s Chief Executive Officer (CEO), Mr. Winston Brassington, thereby affording him an opportunity to clear the air on the matter, and at the same time salvage his now tarnished reputation. ‘Inside the Government’ is an initiative of the Press and Publicity Unit, Office of the President, and its host is businesswoman, Ms. Olive Gopaul.
The inaugural programming was aired last Sunday, May 13, 2012, on NCN CH 11. Broadcast will continue every Sunday at 18:30h.
The following is a verbatim transcript of that interview:

Olive Gopaul: Welcome to this special series on ‘Inside the Government’. This series will focus on the Government’s thrust to aid national development, and some of the challenges both the administration as well as stakeholders are faced with when executing these initiatives to aid in national development. In today’s programme, we will have an exclusive feature on the National Industrial and Commercial Investment Limited (NICIL), and joining us is Mr. Winston Brassington, the Chief Executive Officer (CEO) as we discuss some of the issues. The hot topic now is NICIL. Welcome Mr. Brassington! Let us get straight to business! Can you say when was NICIL formed, and what was its mandate?

Winston Brassington: NICIL was formed in July of 1990 by the PNC Government of the day. It is a company under the Companies Act. Its mandate is pretty much to subscribe for, invest, hold shares, hold investments, buy property, sell property, lease property… To do pretty much anything that one can imagine a company could do. So, it was formed a long time ago, not by this Government, under the Companies Act; registered as a private company with a mandate to basically be, in essence, a holding company; an investment company.

Olive Gopaul: And back then, the PNC Government would have outlined exactly the modus operandi of the company.

Winston Brassington: That is correct. The documents that were used to form the company, the Articles and the Memorandum, spelt out the powers of the company. And there is a list of 21 areas of what the company can do; so they went into great detail in defining the powers of the company.

Olive Gopaul: Ok. And this is how, using those mandates, you’re operating now?

Winston Brassington: That’s correct. We haven’t changed anything since then.

Olive Gopaul: Good. Now, when were you appointed Executive Director of NICIL?

Winston Brassington: I became CEO of NICIL in 2002. I was the Head of Privatization from 1994, and in 2002, the Privatization Unit and NICIL were operationally merged.

Olive Gopaul: When you took over, what was the state of the company?

Winston Brassington: Well, prior to 2002, NICIL’s financial statements were not being consolidated, and that is a requirement not only of the accounting rules of Guyana, but also of the Companies Act. And we went around… we set about to basically prepare NICIL’s accounts to meet international accounting standards, which were applied in Guyana. And that required us to basically prepare accounts, not simply for NICIL, but for NICIL and its entire group of subsidiaries, which were many. And that was a substantial undertaking; so, that was the state of play. And we set about to basically ensure that NICIL prepared its accounts in accordance with the accounting convention.

Olive Gopaul: Are there Articles in the Constitution that deal specifically with the Company’s finances?

Winston Brassington: Not specifically with NICIL. NICIL is a company formed pursuant to the Companies Act, and that is basically the document that we have to comply with, like any other company.

Olive Gopaul: I understand that Mr. Christopher Ram, along with his Company, Ram and McRae, played a part in furthering the development of NICIL. Can you say exactly what was his role?

Winston Brassington: Mr. Ram and Ram and McRae has provided consultancy services and accounting services to NICIL. In 2004, when we set about preparing for the first time consolidated accounts for NICIL, we hired Ram and McRae to help us organize that, and to provide training for our staff. So, Ram and McRae has been a consultant to NICIL going back to that time.

Olive Gopaul: Ok. Now, this is getting down to the interesting part of it: The finances. What is the Company’s current financial state?

Winston Brassington: The big question is: How much money does NICIL have today and…

Olive Gopaul: There’re lots of figures being thrown out there…

Winston Brassington: I wish they could be more responsible and transparent in how they do the arithmetic, because I have looked at these figures that they are throwing around, and its ‘jumbie’ arithmetic. NICIL, at the end of March this year, had a little over $700M in its accounts. Now that money, some of it is in escrow; some of it is committed; so that is the sum total of the entire monies held by NICIL. Of course, this doesn’t include money relating to the subsidiaries of NICIL, but that is the money that NICIL has. So, it’s not anything in the vicinity of what is being mentioned, and I think when politicians go out and make these statements, they should be accountable and responsible. They are trying to say we ought to do A, B, and C, but they don’t exercise any due care in what they say and do.

Olive Gopaul: Now, is it required by Law for the funds of NICIL to be deposited into a consolidated account?

Winston Brassington: No-no! The Memorandum and Articles, or the Articles and By-laws as we call them today, provides for the funds to be held in NICIL, and for dividends to be declared, at the discretion of the Directors.  So, there is no requirement for the monies to be put into the Consolidated Fund. In any company, the distribution of profits is a decision of the Directors, and the Articles and By-laws of NICIL are no different. It clearly states, ‘at the sole discretion of the Directors.’ They may declare interim dividends from time to time; it doesn’t . Didn’t mandate them to do anything in terms of distribution; it leaves it totally within their discretion.

Olive Gopaul: Ok. So, given the pressure that NICIL is being bombarded with from the Opposition, particularly AFC, it is not mandatory that this money, whatever money that is being held by NICIL, be put into the Consolidated Fund.

Winston Brassington: That’s correct.

Olive Gopaul: Alright. Now, I would like to quote something the AFC is saying; that $50B  needs to be accounted for, and I quote: “This money which is being held in NICIL’s account accrued from the sale of assets that were owned by the people of the country. As a result, the money should have been placed in the people’s treasury. Instead, the Government has authorized NICIL to act as a sales agent who has pocketed the money in accounts under their control.” And this is quoted from Khemraj Ramjattan’s press briefing on May 4, 2012. What is your response?

Winston Brassington: As I have said before, I don’t know where he came up with that figure; it’s not grounded in reality. That’s the first point. The second point is the monies that are in NICIL’s accounts belong to NICIL; any assets, any monies that NICIL receives has to be accounted for in the books of NICIL; and NICIL does that. There’s no obligation… In fact, it would be a violation of the Company’s rules if we were to bypass putting the monies in NICIL’s accounts; it would be a violation of the Companies Act and the rules of the company if we were to do that. All of that being said, we have transferred substantial sums to the treasury from NICIL. Between 2002 and 2011, NICIL paid over nine billion dollars to the treasury in dividends. People don’t mention this; it’s in the estimates; it’s a public record each year how much monies are paid over. They don’t mention it, but NICIL accounts for the money, and we declare dividends from time to time. And between 2002 and 2011, NICIL paid over to the Treasury over nine billion dollars in dividends. Between the period 1994 and 2001, NICIL — and this is before I became CEO of NICIL — NICIL paid over to the Treasury $2.3 billion. But in addition to that, substantial sums were also paid over to the Treasury related to privatization. Our records indicate that between 1994 and 2011, approximately 12 billion dollars were paid over as privatization proceeds to the Treasury. Now, if anyone looks at the Estimates, there are usually two line items — divestment proceeds and dividends, and every year, the Budget and the Estimates of the company contains these numbers;  so this is public information. Now, the Auditor General also looks at this stuff in his audit, so I think that this issue has been blown totally out of proportion, because from our records, since privatization started under this Government, NICIL has caused to be distributed, either through the privatization programme or through NICIL, in excess of 20 billion dollars to the Treasury.

Olive Gopaul: Ok. Now, with every company, there is a manner in which the company operates; how the company goes about doing things. You said that there is a Board of Directors; now, what is the procedure that is required when an entity is being privatized? What is the procedure? What are the layers that you have to go through before it reaches the end point?

Winston Brassington: It’s a good question, because, nothing that we do is without a decision-making process that is above us. In 1993, the Government — the PPP Government — promulgated a privatization policy; and it was stated, laid out in a document called Privatization Policy Framework Paper. And it set out the principles under which privatization would be conducted to ensure a transparent system. One of the key aspects of this process was the institutional organisation which you’ll have; a technical unit called the Privatization Unit, which was simply a department; it wasn’t separate in Law. That privatization unit would report to a privatization Board, and the privatization Board is made up of six members: Three from Government; three Ministers, and three from the Private Sector, representing Labour, Consumers and the Private Sector. So, we have a stakeholder Board that is there. The privatization Board, in turn, makes recommendations on privatization to Cabinet; so every privatization that we have undertaken has gone through that process; every privatization.

Olive Gopaul: Ok. And there is a balance in the Board of Directors, representing every aspect of our society.

Winston Brassington: That is correct. All of the members of Civil Society have a seat at the Privatization Board.

Olive Gopaul: Ok. Now, let us talk about the auditing of the records. How up-to-date is the auditing of the records of NICIL.

Winston Brassington: NICIL, every year, within the first four months, NICIL, as a company, submits its accounts to the Office of the Auditor General. We have no choice in picking our auditors; it is set out in Law that the Auditor for the State sector is the Auditor General, and in Law, we have to submit everything to the Auditor General to be audited. So we submit our financial statements, which we prepare, to the Office of the Auditor General for audit. Now the office of the Auditor General has completed the audit of NICIL as a company up to 2010; they are about to start 2011 next week. They have completed NICIL; the audit for NICIL as a group up to the end of 2005. We have just recently received the consolidated audit opinion up to the end of 2005, and although NICIL, as a company, has had its audit completed up to the end of 2010, the Auditor General does not issue the opinion until all of the subsidiaries of NICIL have had their audit completed.

Olive Gopaul: How many subsidiaries are there?

Winston Brassington: It varies. Between 2002 and now, we have had over 20 subsidiaries; the maximum number of companies that we may have in any one year for consolidation is 14, because companies may be created, and companies may be dissolved. But this is a substantial number of subsidiaries by any count, and some of these are substantial companies, and they include Guyoil, National Shipping, NCN, National Printers, National Papers, a number of Electricity companies, property holdings… So, quite a substantial group.

Olive Gopaul: So, all these subsidiaries are being audited by the Auditor General’s Office, along with NICIL. And then they’re being consolidated. Can you say — I must say, for the record, that we’ve attempted to get a comment from the Auditor General to support what you are saying, but presently, he’s out of the country — being the Executive Director, what are some of the details that caused the Auditor General’s Office not to have the auditing done in a timely manner?

Winston Brassington: It varies; I think, on the one hand, you’ve got capacity constraints within the Office of the Auditor General; on the other hand, you’ve had some subsidiaries that were being late in submitting their accounts to be audited. As we speak right now, every subsidiary had submitted their financial statements at least up to 2010 to the Auditor General. Well, I think the delay in getting the audits started with, first of all, that we were doing a consolidation for the first time in 2002, and so it took a few years to get 2002 done. 2002 was completed, I believe, three years ago, and then ‘03, ‘04 and ‘05 followed. We’ve been very proactive, but the Auditor General has had limitations; every Auditor, if they pick an outside Auditor or sub-contractor Auditor, they have got to Tender; they have limited staff; they’ve got competing priorities; sometimes they have to travel out-of-town to do these audits. So, there are various reasons I think… I am of course not happy that the audits are not up-to-date, because it’s in our interest to do that; we have been proactive; we have been timely in submitting our part, and certainly we don’t like all of what’s going on. In fact, at the last meeting with the Auditor General, I said to the Auditor General that maybe in his Annual Report, he should indicate the reasons for the delays in completing the audit, because by Statue, in accordance to the Company Act, we ought to have submitted the accounts to Parliament a long time ago. And while we have submitted for NICIL up to 2004, and for the subsidiaries, we have submitted each of those that is available… In fact, within the last two years, the Minister of Finance may have submitted in excess of 80 sets of accounts or annual reports for subsidiaries of NICIL, from 2002 to date. But the Auditor General had not been putting in his report the reasons why it’s not completed; he just puts what is completed. And I said ‘it would be good if you can indicate if the agencies have complied with what they need to submit to you, so that you can complete your audit,’ because people then believe that it is the Agency that is not doing its job. But all we can do is produce the financial statements; it is the Auditor General who has to complete the audit. We don’t produce the audited accounts; the financial statements. We produce the audits conducted by the Auditor General. I am hopeful that within the next two months, the Auditor General has been working with us; he’s indicated that he hopes by the end of June the consolidated accounts of NICIL will be completed up to 2010. We are not far off; it’s coming; long in coming, but it’s coming.

Olive Gopaul: So, up to present, NICIL has been very transparent in its operation? Just to clear some issues out there based on what you are saying.

Winston Brassington: We don’t make the account public until it’s audited. With that being said, we have delivered the accounts as soon as they’re  audited; and, recognizing the consolidated accounts delay, we have laid in Parliament the audit of the subsidiaries as soon as they become available. Certainly, with respect to privatization, in 2008 we had a workshop on privatization, and we laid out every single privatization transaction, from a transparency perspective; then we put that of July 2008. Currently, it’s being updated, and we expect it will be reissued up to the end of 2011 by the end of this month. So… And apart from that, if there are questions in the public, we’ve dealt with a lot of issues: We’ve had press conferences; we’ve issued press releases… We believe that we’ve been open; we believe that we have been transparent. Recognize that we are not making decisions alone: We have a Board; we have Cabinet. So, there are internal checks and balances, and of course, there have been public discussions; and I’m hoping that once we complete the audit of NICIL — the Auditor General completed a lot — this would be behind us.

Olive Gopaul: Now, the records that have already been audited… have these been presented to Parliament in the past?

Winston Brassington: Yes.  There was a concerted effort in the last two years to make sure that was done; it is required by Law that every State-owned entity should submit, through its Minister, no later than nine months after the end of the financial year, the audited financial statement and a report to Parliament. This is being done for all of NICIL subsidiaries, once the audits are completed. And so, I don’t think that Parliament has seen as many accounts laid before it than it has in the last two years.

Olive Gopaul: I want to read a Motion that Mr. Greenidge is pushing; Mr. Greenidge has indicated in the National Assembly, by way of a Motion, for urgent commissioning of an independent financial audit of the operations of the National Industrial Commercial Investment Limited (NICIL) and the Privatization Unit. Would you welcome that call?

Winston Brassington: Well, first of all, whatever is done, we’re committed to being open, but we also have to be guarded by one of the provisions in Law. As I said before, we have no discretion on picking the audits for NICIL; the Audit Act specifically states that the Auditor General audits for all State-owned entities. Now, there was a big controversy — which Mr. Greenidge himself would know — where the previous Auditor General (whom I believe was Mr. Goolsarran) had said that he was prevented from auditing the Privatization. And the Audit Act ensures that only the Auditor General is responsible for auditing State transactions. So, whoever auditor had it done has to comply with the Law. Unless Mr. Greenidge proposes that the Law be amended — and there is a logic why the Law is where it is, because you can very quickly say ‘We don’t want the Auditor General auditing this; put it outside.’ But then, there are other reasons why it wouldn’t be done.  So, I have gone before the Economic Services Committee to answer questions on aspects of my job before; we’ve had public workshops, where I mentioned the Privatization workshop announcing the transparency in what we do; we have been proactive in trying to get the audits done… Parliamentarians have access to ask questions and receive answers. It is my understanding that in at least in the Ninth Parliament, there has never been a parliamentary question raised that hasn’t received an answer. Additionally, the Public Accounts Committee of Parliament overviews the Auditor General Office; the Auditor General reports directly to that Public Accounts Committee. So, Members of Parliament can ask any question I will expect of the Auditor General; so, there are many ways to get the information they are seeking, but I believe we have to be first guided by what the Law states, and as it stands right now, I believe that such a proposition would not be consistent with the Law.

Olive Gopaul: Now here is another allegation being thrown against NICIL: The AFC has called for NICIL to be subject to total scrutiny in the Economic Service Committee of Parliament, citing the numerous instances of obscure financial dealings. What are your comments?

Winston Brassington: Well, it’s kind of related to the previous question. As I said, there are many avenues to obtain information: Questions from Parliamentarians to obtain information; inquiries through the main committees of Parliament, including the Public Accounts Committee and the Economics Service Committee; and I think you have to be guided, too, by what the provisions of Law require for disclosure. NICIL operates as a company, and what should be the first principle, or test, is how we’re adhering to the Companies Act and to the disclosure… And, indeed, I am disappointed that we are not up-to-date to lay in Parliament the audited accounts as of  a current date, but I’ll explain why that is so; but I don’t believe that you can simply change the rules of the game of how things should happen; what matter should be looked at, and how you look at it, by saying ‘We don’t want this,’ and ‘We want that’… But, I’m all for openness, and I’ll be happy, subject to being guided, that it is proper and appropriate within the Law to fully cooperate and answer questions.

Olive Gopaul: And, within the years that you’ve been at NICIL, all transactions would’ve been in keeping with the Companies Act.

Winston Brassington: That’s correct, bearing in mind that the Companies Act doesn’t speak to privatization per se; and that’s why you have the privatization framework paper. But, yes!

Olive Gopaul: Alright; this is on a more personal note now. Is there a personal reason why NICIL is being attacked by AFC? You’ve been accused of having $50B when you’ve said this is no way; this funding is not out there. You’ve explained to us that the Company operates within a transparent manner; it’s been started by the PNC Government, and when you came in, you were able to tidy up the company. Now, is there a personal vendetta of sorts against the company?

Winston Brassington: It certainly would look like that. You know, in recent weeks, everyone who would see me would say, ‘Winston, why are these guys going after you and NICIL?’ I think it is political theatrics; it’s political grandstanding; it’s irresponsible; maybe even dishonest behaviour on the part of some politicians who believe they can say and throw anything at you. But they are not being accountable or responsible for their statements, and at the same time, they ignore the avenues that are available in the Parliament: Access to the Public Accounts Committee; access to questions… They are ignoring those, and making a big affair of this. So, it’s a show! And I think that one of the reasons that they are going after us is because the same way they cut the LCDS (Low-Carbon Development Strategy), which will jeopardize the ‘hydro’, they want the ability to be able to cut any project, regardless of the development benefit; and because NICIL operates on its own, in terms of being able to invest money paid as dividend, and doesn’t go to the consolidated funds for money, it doesn’t have that power. But I also believe that they are trying to derail the commitment for the government to participate, through NICIL, in the Marriott Hotel project.

Olive Gopaul: That’s a bigger issue by itself. But, anyway, we’re out of time. I must say thank you so much for coming on ‘Inside the Government’ and clearing some of the speculations being made out there about NICIL. And to all the viewers, join us next Sunday at 18:30hrs for  another episode of ‘Inside the Government’, and on Wednesday at 19:30hrs for a rebroadcast. Thank you very much.