CHAIRMAN and Managing Director of Guyana Stockfeeds Inc. (GSI), Mr. Robert Badal, at the conclusion of the company’s Annual General Meeting held at the Pegasus Hotel on Friday last (16th May, 2014), introduced a handwritten “statement” to the meeting attacking the Securities Council, which was read out to the shareholders by Mrs. Priya Nauth-Badal, Company Secretary. Mr. Badal then asked the shareholders to endorse the “statement” by a show of hands.

The “statement” was not, however, made available to the shareholders and its presentation to the meeting for endorsement was contrary to the provisions set out in Articles 112 of the Companies Act governing the conduct of the meeting.

The “statement” was released to the media and published in the Kaieteur News last Sunday (18th May) and demands the resignation of Chief Executive Officer, Cheryl Ibbott, and Legal Officer, Shawn Allicock, of the Guyana Securities Council.

Guyana Stockfeeds Inc. (GSI) had been castigated by the Securities Council in a Public Advisory for misleading its shareholders by claiming, in its Interim Financial Report published for January – June 2013, that it had paid shareholders dividends amounting to $80,285,557, when, in fact, the company had not paid the dividends.

The truth is that, in 2008, the Court ruled in favour of an action brought by the National Industrial & Commercial Investments Limited (NICIL) against Mr. Badal’s attempt to unlawfully reduce the Government of Guyana’s shares in Stockfeeds from 38% to 7% by means of an illegal Rights Issue giving Mr. Badal almost 80% ownership of the company, under the guise of raising capital for the construction of a wharf illegally on, and through, NICIL’s land.

Mr. Badal, rather than restore the government’s shareholding as ordered by the Court, appealed the decision which is still to be determined. Mr. Badal, however, improperly declared in his 2013 Interim Report that dividends of $80M were paid and, as a result, mislead the shareholders prompting the Advisory by the Securities Council.

The Court, in fact, ruled that the business affairs of Stockfeeds were being carried out oppressively, that the company had not complied with the Companies Act and that the Rights Issue was illegal, null and void and issued an order restraining any further issuance of shares or increase in the defendant’s shareholding or any changes to the share register of the company.

NICIL’s challenge to the declaration and payment of the $80M dividend for the year 2012 was based on the prevailing ruling of the Court effectively preventing the payment of dividends on a share record that was based on an illegal Rights Issue which is still to be determined by the Court.

Mr. Badal’s reaction to the challenge was to threaten to have NICIL’s representative forcibly removed from the 2013 meeting and to become abusive, informing the 2013 AGM that he intended to pay the dividends immediately and that no Court could stop him. The payout would have, of course, resulted in Mr. Badal receiving 80% of the $80M payout.

At the most recent 2014 AGM, as we have pointed out above, Mr. Badal misrepresented the foundation for the Court’s ruling restraining the payout of dividends and was openly critical of the Court.

It is said that people who live in glass houses should not throw stones. There are other questionable arrangements with regard to the management of Stockfeeds which its Chairman and Managing Director may wish to explain especially which, to quote him, “in other jurisdictions”, may have led to his resignation/removal as Chairman and Managing Director.

Guyana Stockfeeds, for instance, each year, purchases billions of dollars in goods and services from a company called Guyana Stockfeeds Inc. created in Trinidad & Tobago by Mr. Badal. The Trinidad & Tobago company is not, however, as one would expect, a subsidiary of Guyana Stockfeeds in Guyana. It is solely owned by Mr. Badal who directly profits from the sale of these goods and services from Guyana Stockfeeds Inc. in Trinidad & Tobago to Guyana Stockfeeds Inc. in Guyana.

For example payments were made from GSI (Guyana) to GSI (Trinidad & Tobago) for goods and services (that can be done by GSI/Guyana directly) amounting to $909.9M in 2010, $852M in 2011, $771M in 2012 and $1.3B in 2013.
To add insult to injury, GSI (Guyana) paid Badal’s GSI (Trinidad & Tobago) “management fees” of $30m per annum for the last 5 years and in 2013 paid for all operating costs of maintaining GSI (Trinidad & Tobago) amounting to $52.3M. The proceeds from these transactions are pocketed by Mr. Badal.
Then there is the case of Mr. Badal’s disposal of the Popeye’s franchise ownership. Mr. Badal, as the sole shareholder of El Dorado Restaurants Inc., sold the Popeye’s franchise to Guyana Stockfeeds Inc. in 2007 for $123M. Some 3 years later, however, in 2010, Mr. Badal was offered a higher price for the Popeye’s franchise than the price he sold it for to Stockfeeds in 2007.

Instead of Stockfeeds shareholders profiting from the new offer for the Popeye’s franchise, Mr. Badal promptly rescinded the 2007 sale of the franchise from El Dorado Restaurants Inc. to Stockfeeds, pocketing the profit from the sale as the sole shareholder of El Dorado Restaurants Inc.

When this extraordinary financial “sleight of hand” by Mr. Badal was challenged by NICIL’s representatives at the Stockfeeds 2011 AGM, Mr. Badal offered the specious explanation that Stockfeeds had not paid El Dorado Restaurants even though Stockfeeds “Cash at bank” was in excess of $304M at the time he reversed the sale.

Another transaction that invites explanation regarding Mr. Badal’s stewardship as Chairman and Managing Director of GSI relate to Mr. Badal’s El Dorado Trading Company Ltd and National Edible Oils and Fats Inc (NEOFI) which purchased 4.2 acres of land at Farm from GPC and GoG in 1997 for US$540,000. On NEOFI’s failure to complete payments, on 10th April 2002, NEOFI (owned by Badal) assigned its rights, interests and obligations in the Agreement of sale for the land to GSI.
In 2003, GSI issued a letter of Guarantee paying for the land and in 2003 the property was transferred to GSI.
In the 2013 Annual Report, land disposal totalling $178M and equipment valued at $35M and sold for $139M were recorded without any notes or explanations. Verbal indications revealed that Mr. Badal recorded and exited the property from GSI to himself.