Guyana Stockfeeds Inc (GSI) yesterday called again on the Guyana Securities Council (GSC) to retract an advisory on the non-payment of dividends which GSI said was based on an erroneous conclusion.
Noting that it has been two months since it called on the GSC to issue the retraction, GSI said in a statement yesterday it can’t help but draw the conclusion that it is being targeted when one considers the inaction of the GSC on other matters.
On January 10th 2014, the GSC had issued a “Public Advisory” in the daily newspapers which stated that GSI had published its Interim Report for the period January – June 2013 showing that the company had paid dividends totaling $80,285,557 for the financial year ended 2012. The Advisory said that the GSC had been notified by several shareholders that they had not received any dividend payments for that period. The Advisory further said that it had contacted GSI and was advised that no dividends had been paid for the 2012 Financial Year.
The Advisory said that the GSC had written to GSI stating that the January – June Interim Report was erroneous and must be corrected and distributed in the same manner as the flawed Interim Report, and that up to the date of the Advisory, GSI had not complied.
The Advisory ended by advising shareholders to seek independent advice.
Following the publication of the Advisory, GSI said it wrote to the GSC on 20th January 2014, advising it that although the company had ratified the payment of a dividend for 2012, it had not been paid to shareholders as one shareholder – the National Industrial and Commercial Investments Limited (NICIL) had approached the courts for an injunction to prevent payment of the dividend. GSI in the statement yesterday noted that this injunction was subsequently discharged for material non-disclosure on the part of NICIL. Sometime after this, it said that NICIL again obtained an injunction restraining the payment of dividends which GSI is seeking to have heard. Meanwhile, out of respect for the court, GSI said it has not actually disbursed the approved dividend payments.
GSI said it sought professional advice on the GSC request for a correction of its Interim Report and was advised that on the facts that it provided, the published interim report was not incorrect.
Having obtained this advice, GSI said it wrote to the GSC providing a copy of the opinion and informing it that its previous request, and subsequent Advisory, were based on an erroneous conclusion. The GSC in its notice on January 10, 2014 had said that it wrote to GSI 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 up to date of the advisory in January, 2014 GSI has not replied. GSI’s statement yesterday did not say why it had not replied to the GSC last year.
GSI however said yesterday that given the publicity of the GSC Advisory, and the potential harm it posed to GSI’s business, GSI had requested that the GSC retract the erroneous Advisory forthwith, and give the retraction the same prominence it had published the erroneous Advisory.
Since some two months have elapsed since that request, GSI said it has no alternative but to conclude that the GSC has no intention of publishing a retraction of its “erroneous” Advisory.
“GSI is very disappointed that the GSC as a regulator would behave in such an irresponsible manner. Even if it had received complaints from shareholders, the GSC’s rush to (the) press was unwarranted. It could simply have directed shareholders to contact GSI’s offices, which would have provided them with the information above. Or it could simply have advised the shareholders to do what it ended up doing at the conclusion of its Advisory anyway – to seek private professional advice.
“Indeed, the precipitate nature of the GSC’s action, the prominence given to it, and the refusal to retract its Advisory, although it was then fully apprised of all relevant facts …in some jurisdictions …would have led to calls for an apology by the GSC and the resignation of its C.E.O”, the GSI said.
GSI said that when it considers how differently other companies committing serious transgressions have been treated by the GSC – the perception arises that there is a campaign of harassment by this regulator against the company. GSI cited what it said was the reticence of the GSC to become involved in stopping the CLICO debacle of several years ago, when the Caribbean multinational marketed “what was a security disguised as an insurance policy, to the unsuspecting Guyanese public without registering same with the GSC, or publishing a prospectus”. GSI said that this behaviour “wrought financial carnage among Guyanese investors, including the National Insurance Scheme, and could have been easily prevented had the GSC been minimally vigilant.”
GSI said that another public company, Property Holdings Inc. administered by Winston Brassington of NICIL had been in breach of the Companies Act for several years in failing to file Annual Returns as required by the Act.
“One would have thought this may have provoked a similar `Advisory’ from this vigilant GSC; however, again, its uncharacteristic shyness prevented it from taking any action. Despite the apparent attitude of the GSC, GSI nevertheless invites it to issue a retraction, belated as this may be”, GSI said.