The Auditor General stipulated that GAIBANK foreign exchange losses should be charged to the consolidated fund but this was not done
I refer to Mr Justin McKenzie’s SN letter dated January 7, and captioned, ‘Why did GAIBANK never approach the government to make good foreign exchange losses?’ and state that this task was completed, but the PPP/C government did not do its job, even though they accepted the Auditor General’s report and submitted same to Parliament. The Minster of Finance submits the audit report to Parliament, and since the government of Guyana is the sole owner of GAIBANK, it is their responsibility to make the necessary decisions, having been so advised by the Board of Directors and the Auditor General. In fact, the Auditor General, as part of the good governance structure in the country, stipulated in his letter of December 31, 1993 that the foreign exchange losses should be charged to the consolidated fund based on the Laws of Guyana, Chapter 75:01. Unfortunately, the PPP/C government did not do its job and trying to pass the blame will not work. Had that action been taken, profits as reported by the Auditor General were G$876.0 million with a net worth of G$1,268.3 million (Auditor General letter of December 31, 1993).
On the subject of the Government of Guyana currency devaluation, it is obvious that GAIBANK had no control over the exchange rate with which Mr McKenzie agrees, and it would have been illegal to impose repayment terms on clients at the new exchange rates, as this would have violated their original loan contacts. Furthermore, Mr McKenzie states, “…all through these years GAIBANK’s bottom line progressively got worse since it was necessary to find more G dollars to repay US dollars borrowed.” This is further proof that Mr McKenzie agrees that it was not mismanagement but the devaluation of the currency over which GAIBANK had no control.
On the claim that rice millers obtained cement at US$1.00 per sack when the black market prices were higher is an interesting ‘after-work argument in a social setting.’ I suppose Mr McKenzie would have preferred GAIBANK to charge black market prices for the IDB financed cement, but obviously, if GAIBANK were to engage in such a black market, it would have been an illegal act, linking the institution and the IDB loan with corruption. In such circumstances, the Auditor General would have had cause to qualify his audit report and the IDB would have withdrawn its support, since this would have been a criminal event, with the police taking up the matter. This of course never happened, so Mr McKenzie should apologize to every rice miller, and the Ministry of Agriculture should disassociate itself from the letter written by Mr McKenzie.
I would not dignify the statements by Mr McKenzie on the subject of party hacks and opportunistic adventurers whom he claims received loans alongside the rice millers who were engaged in cement corruption. However, what I would strongly recommend is that since Mr McKenzie has so much detailed information on these persons, and he has access to the files at the Guyana National Cooperative Bank, he should without delay go to the police and have legal proceedings started against these persons.
Finally, Mr McKenzie writes his story in the mode of someone who was directly engaged in all these transactions. Unfortunately, after checking with former GAIBANK staff, I was reliably informed that no Justin McKenzie worked at GAIBANK.
C Kenrick Hunte