The depositors of Globe Trust Invest-ment Company Limited (GTICL), at the end of the mandatory one-month objections period have not rejected in writing to the reorganisation plan for the company.
Notwithstanding this however, GTICL Administrator Conrad Plummer said that in order to facilitate any letters that would have been posted, March 21 has been set as the deadline to receive any mailed-in objections. The reorganisation plan would see an immediate injection of US$3.5 million into GTICL of which US$1.5 million is for infrastructural works if necessary.
On February 7, Chief Justice Carl Singh approved the re-organisation plan of GTICL, after it was submitted on November 16, 2006. The shareholders had 30 days to appeal to the court if aggrieved. Plummer told Stabroek News yesterday that once the plan was not rejected by the depositors it will be ready for implementation.
After March 21, the investor will have to ensure that the funding is available, when requested by the Bank of Guyana (BoG). The BoG must approve the investor before the plan can be implemented.
Plummer said the BoG may ask the investor to send the money to Guyana and in that case the money will have to be housed at an institution, other than GTICL, until all transactions are made to hand over GTICL to the investor.
On February 19, Plummer held a meeting at the Georgetown Club with the depositors, where they were told of Justice Singh’s decision. At that meeting, the administrator had indicated that if the plan did not go through then the next move would be to move to the courts to modify the plan or to liquidate the company. The court has the power to accept the modifications or choose to liquidate the company. During that meeting, Plummer had told depositors enquiring about the collections of bad loans that 70% or 80% of GTICL’s loans are tied up in court cases and that on several occasions these cases are adjourned and in other cases files are reportedly missing.
The depositors had also shared concerns about whether the investor would send millions of US dollars here without any guarantee that a deal would be reached. On October, 31, 2005, the shareholders, in recognition of the state of the company and the value of their shares, by resolution, reduced the stated capital of the company from $300 million to $60 million, a decrease of 80%; in part to attract investors. This was done after several attempts to obtain an investor.
GTICL began operating in April 1991 and was licensed in 1999 to conduct depository financial business with authority to engage in trust business. However, in 2000 and 2001 a series of inspections by the BoG found the institution to be in breach of the Financial Institutions Act, and the BoG, with the intention to liquidate, seized the institution in September 2001. The BoG later appointed an administrator in December 2002, after the Chief Justice ordered the re-organisation of GTICL under the BoG as set out in Section 50 of the FIA.
