Chief Justice (ag) Ian Chang is likely to commence a liquidation hearing into Globe Trust and Investment Company Limited (GTICL) later this month following a High Court application by the Bank of Guyana (BoG) some two months ago.
After an investment deal for the troubled institution failed to materialize the BoG, which manages Globe Trust under the Financial Institution Act (FIA) 1995, approached the courts in July this year asking that an order be granted for the compulsory liquidation of Globe Trust.
Justice Chang upon hearing the application made by BoG ordered that an advertisement be placed in the newspapers for any person or body to show cause why the application should not be granted, and the Guyana National Industrial Company (GNIC) subsequently filed an application pursuant to the newspaper notice.
Ralph Ramkarran SC, filed the High Court claim for GNIC on the grounds that the company secured a court order from Justice Jainarayan Singh Jr on February 13, 2008 that orders Globe Trust to return to it a few treasury bills, some Banks DIH shares and proceeds of two accounts held by Globe Trust at Citizen’s Bank; one of them being for $12 million.
Yesterday Ramkarran argued before Justice Chang, that the sums being held by Globe Trust were held in the capacity of a trustee for the pension fund of GNIC. He said further that those monies were not available for distribution to any creditors.
Attorney for Globe Trust, Stephen Fraser then stated that Globe Trust did not have the funds available to satisfy the claim by GNIC for $12 million but that some other funds were available together with the treasury bills and shares.
The matter was then deferred to later this month for discussion between the parties for claims of settlements, and possibly for hearing. Senior Counsel Keith Massiah represented BoG.
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.
Several attempts thereafter to attract an investor failed. Up to March this year, the BoG was to decide whether to extend the deadline for a third time for a South American company to provide the required documentation in its bid to control GTICL or to move ahead with its liquidation.
Earlier, on February 27 former GTICL administrator Conrad Plummer, during a press briefing at its Middle Street office, told the media that the lone interested investor had asked for an extension of the February 15 deadline to submit its application to Acquire Control of a Financial Institution, and this extension was approved. However, the investor then sought an extension up to March. The February extension followed two missed deadlines on November 30, 2007 and January 24, 2008. Plummer had said that since he was not authorised to refuse the request, it was forwarded to the BoG for a response. Plummer noted that the next step would have depended on the answer to the investor’s request.
If the extension had been granted and adhered to by the investor and further agreement reached then the administrator would have seen the transaction through – which would have included an application to the courts to modify the existing approved plan under Section 51 of the FIA. However, if no further extensions were granted then the BoG would have needed to apply to the court again under Section 51 of the FIA to have a liquidator appointed.
