Stockfeeds did not pay 2012 dividends as it stated – securities council

The Guyana Securities Council (GSC) says that Guyana Stockfeeds Inc did not pay dividends for the 2012 financial year as the company had stated in its interim report for January to June 2013.

In a public advisory in today’s Stabroek News, the GSC said that Stockfeeds published its interim report for the first half of 2013 in the September 20th, 2013 edition of Stabroek News and stated that it had paid dividends totaling $80m.

“The Guyana Securities Council was notified by several shareholders that they did not receive any dividend payments for that period”, the advisory said. The council said that it then contacted Stockfeeds and its attorney advised the council that no dividends were paid for the 2012 financial year.

Further, the GSC said that it wrote to Stockfeeds on November 14, 2013 and November 25, 2013 stating that the January to June, 2013 Interim report was incorrect and must be corrected and disseminated in the same way as the incorrect interim report. The GSC said that to date Stockfeeds has not replied.

The Council is advising all shareholders to seek independent advice.

In the May 5, 2013 Sunday Stabroek, former business page columnist Christopher Ram had commented on the results of the company for 2012. His assessment follows

Guyana Stockfeeds Inc

An increase in sales of 13.3% did not translate into income and profits as margins were squeezed with raw materials and consumables accounting for 91% of revenue, up from an already challenging 90%. The company continues to incur high professional fees of $71 million compared with $64.9 million in 2011. The notes to the financial statements indicate that Guyana Stockfeeds Limited, a wholly-owned company incorporated under the laws of Trinidad and Tobago undertook transactions amounting to $771 million on behalf of the Guyana company and also received $30 million as “Reimbursement of cost incurred”. It is unclear and perhaps unlikely that this sum is part of the $71 million in professional fees.

Despite only a modest increase in the value of net assets, property tax rose from $11 million to $15.2 million, the reason for which is not immediately apparent.

As a result of a challenge in the High Court of Guyana by the government company National Industrial and Commercial Investment Limited (NICIL), a shareholder of the company, the company is not permitted to issue any new shares until the outcome of this matter is fully settled. The regulator, GASCI has suspended trading of the company’s shares until the matter is settled. Apart from this issue the company is a defendant in two matters being addressed by the court but in both cases the company’s attorneys have assured it that the company has a good defence.

The shares in Guyana Stockfeeds Inc are owned 85.87% by Mr Robert Badal, Chairman and CEO of the company. I have heard complaints from shareholders that Mr Badal treats the company like a personal property and even is inaccessible to them. Perhaps Mr Badal prefers to have sole and exclusive control of the company. While that would be regrettable in the wider scheme of the participation of members of the public in the ownership of so-called public companies, it may not be a bad idea for some arrangement to be worked out with the minority shareholders.

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