Dear Editor,
The Board of Directors of the New Building Society Limited (NBS) has reviewed statements appearing in some sections of the media attributed to particular spokesperson(s) calling themselves “Concerned Members.” These statements are considered slanderous/libellous, misleading and mischievous. The Society wishes to set the records right. It must be made clear that the Board of Directors has always and will always act in accordance with the Rules of the Society and good governance practices. We now wish to clarify the under mentioned issues:
Notice of meeting
The Notice of the Annual General Meeting and Agenda was first published in the Guyana Chronicle on April 3, 2009 and subsequently in other newspapers in keeping with the rules. The Notice and Agenda were also displayed at the chief office and all of its branch offices from the same date. A contributor to the ‘Business Page’ of Sunday Stabroek April 19, 2009 failed to mention that fact.
Pension scheme funds invested in Clico
The Society’s Pension Scheme currently holds a Flexible Annuity Policy of approximately $111M with Clico. This is contrary to speculation contained in the Kaieteur News of April 15, 2009 and ‘Business Page’ of the Sunday Stabroek of April 19, 2009, that the Society may have negotiated redemption of its Pension Scheme investment in Clico at the time of purchase of the bonds for the Berbice River Bridge. We repeat there was no trade off or insider dealings in this matter as suggested by so-called “Concerned Persons.”
Bank of Guyana oversight
The Bank of Guyana conducted three (3) inspections of the Society’s records, two of which were done in the last three years. The accountability of the Society is under the purview of the Minister of Finance who has the power to examine or cause to be examined the books of accounts of the Society. The Bank of Guyana or any other agency may be utilized for this purpose. We reiterate that we are guided by our own set of rules and the law under which we are governed.
Change of auditors
The Society received a nomination for an auditing firm to be appointed auditors for the year 2009 in accordance with the Rules of the Society. As required by the rules, the NBS informed the current auditors by way of letter and informed its members by an advertisement in the daily newspapers. We subsequently received notification from our current auditors of their desire not to seek re-election at the Society’s AGM on April 25, 2009.
The Board of Directors in accordance with the Society’s Rules does not appoint auditors, so it cannot be accused of removing the auditors. In fact, the board over the years has enjoyed cordial relations with Messrs Jack A. Alli, Sons & Company. The board and the management of the Society categorically deny that they had anything to do with the process of elections of the Society’s auditors. This is within the purview of the members.
Investment in the Berbice River Bridge Bonds
It is a fact that NBS purchased $1.5B in bonds in the Berbice River Bridge from Clico. The bonds were purchased at face value. The Society wishes to make it pellucidly clear that the investment is in the Berbice River Bridge and not with Clico and the bridge is fully insured. The acquisition of the bonds, we emphasize, is in the interest of our members and the Society as a whole.
Our bridge investment is merely 5.0% of total assets. Of the other 95.0%, 54.0% or $19.0B is invested in mortgage loans, amounting to 7,819 in number. This translates into an average mortgage loan of $2.4M. Our maximum exposure in any one security until recently was $8.0M. The investment therefore in the bridge is sound, justified and is the most lucrative investment opportunity currently available to NBS. Thus, the directors are satisfied that they have met their fiduciary obligations to the institution.
Profit
The Society recorded a profit of $288M for the year 2008. Had it not been for an exchange loss of $200M as a result of the depreciation of the pound sterling due to the global economic meltdown, the total profit for the year 2008 would have been $488M. The investment in the UK is guaranteed by the Government of the United Kingdom.
Of interest to members it should be noted that the investment in Britain has been there for decades, inclusive of the period when a self-styled “Concerned Member” was a member of the Society’s Board of Directors. The Society’s profits over the years had the benefit of a significant increase in the value of the pound sterling. Therefore the $200M losses for this year will have to be measured against those massive gains in previous years.
Financial status of NBS now
The Society has always been and continues to be very sound financially. It surpassed all of its key financial indicators, strategic goals and operational targets in achieving record earnings, despite many challenges during the year.
We wish to remind our members of the 2007 sinister plots which were designed to undermine the Society by the same so-called “Concerned Members” who predicted the downfall of the Society. However, the Board of Directors wishes to assure all members that the Society continues to be strong and will continue to be sound well into the future.
We regret that the media houses which continue to publish these inaccurate and misleading statements continue to do so without seeking our view on these matters. We hope that sacred tenets which form the basis of good journalism will be adhered to in the future. We equally hope that these facts will be published fully in the interest of fairness to the Society and balanced reporting.
Yours faithfully,
Ahmad M. Khan,
CEO/Director/Secretary
On behalf of the Board of Directors NBS
Ak I can’t stand the term ‘fully insured’. This makes it sound like either they don’t know what they are talking about (since the returns are not guaranteed and i doubt the NBS has purchased credit insurance) or they are trying to defend the decision after the fact. Either way it does not instilled confidence in the decision making process which is a shame as the bridge is reportedly making its revenue targets already.
The controversy could have been avoided if decision had involved an analysis by an independent advisor.
Can’t wait for Mr. Ram to sink his teeth into this one
Amad Khan are we to believe after that massive fraud allegedly by insiders and this madness with the midnight purchase of the Clico bonds in that bridge in the Atlantic River that all is well. After taking some 3 billion dollars of depositors money and tossing it around like candy you are asking people to “don’t worry be happy”. NBS has nothing to hide so why take the Annual General Meeting to Berbice when 80% of the members are in georgetown????.Bet there will be a heavy Police presence at this AGM meeting to keep people out.. You just signed the above letter so as to stay employed.
Bad governance will always result in entities such as NBS attracting criticism – even if some of what they do is good and even if their members have nothing to worry about. This is the result of the fear that is driven into stakeholders.
First, NBS cannot publish a notice on April 3 but expect members to review the report a few days before the AGM. Even if their rules permit them to send the report after the notice, good governance would require earlier availability.
Next, NBS cannot run away to Berbice and expect that 80% of their members would be happy – even if they have nothing to hide, persons would be suspicious.
Next, NBS cannot expect members to be comfortable with the Government having such a large hand in the Board. Enough said.
And finally NBS cannot expect members to trust an entity which only makes pronouncements when challenged and fails to address them until after repeated challenges. It is not the first time the matter of the bonds has come up so their belated arguments would be frowned upon, regardless of their merits.
Financially sound?Like how? Show me the money.
Where have we seen these declarations before? hmmmm lemme think? Clico? NIS?
Ah yes this is when the Pee Peed Poo was busy challenging the opposition to debate them on the bill put in parliament and how great the economy was doing and ummmmmm how the heee can o mee had a fiahwall around it, remember dat Prezzzo?
NBS is operating like government ministries!
anyone buying this nonsense from people that are intimidated into making these statements by the PPP cannot, should not and will not be taken seriously.
What evidence did this man profer in his letter to show us that NBS is sound?
Thank goodness my money is in scotia bank.