– says Chris Ram is ‘dead wrong’

THE Private Sector Commission (PSC) said it has noted the response from the public to its release on the intended legislative action for reduction of tolls payable to the Berbice Bridge Company and wishes to reiterate its position that it will not accept governmental interference in the management of private companies.It noted that government’s role in Private Limited Liability Companies extends to regulating and enforcing compliance with existing laws. The Private Sector Commission, cognisant of the free market policies which have driven growth in Guyana for the past twenty-five years and allowed a strong private sector to develop and flourish, is of the opinion that private investment must be guaranteed protection from any form of governmental interference with legal investment strategies, most paramount of which is pricing for products and services that directly affects shareholders’ legitimate right to investment returns. It is only in the context of such protection that private capital can be harnessed and directed into infrastructural projects which are of crucial importance to the nation but which may be beyond the financial capabilities of government or the capability of government to efficiently manage.
In its previous release on government intervention in the Berbice Bridge Company, a private company, the Private Sector Commission stated that “the Company is 80% owned by Guyanese private sector interests, including pension funds and 20% by an institutional investor, the National Insurance Scheme (NIS), that also holds non-voting preference stock in the Company and provides one of the few opportunities for good investment returns on Guyanese workers’ NIS contributions and may also be considered critical to the future of the Scheme.”
Mr. Christopher Ram has since written to the press challenging the Commission’s statement and positing that Government owns 76% of the issued shares of the Company but intentionally ignoring the above. The PSC said it stands by its statement since the Government, through NICIL, no longer owns the 950 preference shares in the Company as these were purchased by an institutional investor, the NIS. “Mr. Ram is dead wrong to use the NIS ownership of the preference shares as synonymous with Government ownership and control,” the PSC stated. These preference shares are non-voting shares which carry no vote at the Shareholders’ Meeting.
The NIS is an institutional investor with a mandate to provide social security benefits to the workforce in Guyana; health benefits, retirement benefits, etc. It is not an investment tool of the state which generates income for the consolidated funds.
Long term liabilities, other than the preference shares, representing more than 80% of LTL are financed from private sources, Commercial Banks, companies, etc.
“With respect to the NICIL Special Share, which Mr. Ram points to as evidence of government ownership, as Mr. Ram should be aware, this is a common safeguard provision inserted into the Articles of Amendment to protect the interests of the people when assets are privatised,” the PSC stated.
This Special Share is usually referred to as a ‘golden share’ and has no financial interest in the Company. It merely allows its holder to prevent the company from acting outside of its mandate and would come into play if, for instance, the Company sought to utilise the bridge as collateral for a debt for a project unrelated to managing and operating the bridge.
The ownership structure outlined above clearly establishes that the Government has no direct investment in the Berbice Bridge Company.
The ‘mind-boggling ignorance’ to which, as Mr. Ram refers, is more appropriately applied to his contention that the legislature can dictate the pricing strategy of a private limited liability company in which it has no direct shareholding and consequently no control.
“Would Mr. Ram, with his expertise in Company Law, specify precisely how his position is supported?” the PSC questioned.