— investors breached investment agreement without sanction

Personnel at the Guyana Office for Investment (Go-Invest) have misplaced the files relevant to Chinese company Zhanghao Shipyards Inc.The company, which was granted concessions to the tune of $82.4M to engage in value-added activities, may have breached its investor agreement with Go-Invest.
This was revealed recently following the release of a forensic audit report last week on an audit which was conducted by Nigel Hinds Financial Services, of Go-Invest operations.
According to the report, dated September 30, 2016, the company, which is based at Coverden, East Bank Demerara, was incorporated in 2013, with the principal object of establishing a shipyard to build and repair local and foreign registered vessels.
The report stated that the investor applied for concessions related to their principal activity and was granted concessions in October 2013.
The auditing firm noted that the investor benefitted from concessions to the value of GY$82.4M to engage in value-added economic activities.
“However, all evidence suggests that except for building a model vessel, the investor is in breach of the IA entered into,” the auditing firm said.
The vessel, which was built with a capacity to ferry 200,000 tonnes of logs and six crew members, was launched in 2014 and was expected to be used by a sister company of the manufacturer which operated logging concessions at the time.
According to the auditing firm, its attempts to garner additional information on the agreement signed between the Chinese shipyard company and Go-Invest was stymied since the entire file on the shipyard could not be found by Go-Invest staff.
Later in the report, the auditing firm noted that an examination of the files of four investors including Zhanghao Shipyards Inc has revealed that Guyana did not benefit from concessions granted to these investors for more than G$2B since the investors all breached their investor agreements minus sanctions.
Among its recommendations, Nigel Hinds Financial Services said Go-Invest should ensure that it applications are properly filled, processed and filed.
In addition, the firm noted that concessions recommended for exemptions should be monitored to ensure Go-Invest database can provide the Ministry of Business with the necessary data to provide information on economic activity and the preferred areas of investment by investors.
The firm added that all concessions recommended by Go-Invest should be reconciled with the related exemptions granted by Guyana Revenue Authority (GRA).