The liquidators for Globe Trust and Investment Company Limited (GTICL) announced yesterday that the way has been cleared for depositors with less than $100,000 dollars to be refunded almost ten years after the institution came crashing down.
Nizam Ali, who was appointed liquidator, said yesterday that around $45 million dollars has been made available for the payouts following a court ruling by Chief Justice (ag) Ian Chang last month. On register are 3050 persons classified as small depositors.
Ali said letters would be sent out on Monday for these depositors to visit the firm at its Camp Street location in another week’s time, but noted that payments would be made in batches of 100.
“…The process is moving at a faster pace now”, he said indicating that the disbursements signal the beginning of the end. Ali recently filed the Schedule of Steps in the High Court which is consistent with requirements in the law.
The Schedule of Steps has an objection period which ends on October 29, 2010, but Ali explained that whatever happens during that period does not preclude them from making the payments to small depositors and later, big depositors.
Globe Trust’s 1,000 depositors who invested over $100,000 will share in the remaining funds that were collected and according to Ali the remainder would be considerably smaller. Ali was not in a position to say what percentage big depositors are likely to get back, but he summed it up as “dismal”, adding that who gets priority is not within his discretion.
The law ranks priority in a particular order beginning with liquation expenses; unpaid claims for taxes; wages and salaries; fees due to the Bank of Guyana and deposits not exceeding an amount of $100,000 dollars followed by depositors over $100,000 dollars.
The law also states that unclaimed monies are turned over to the general reserve funds established under the Bank of Guyana so depositors can go at anytime and claim the money.
Ali noted that payouts were previously made to depositors who were part of thrift funds; pension plans and education trust funds. Ali noted that payments were recently issued to some 1202 persons who were part of education trust funds amounting to $30 million dollars.
Globe Trust’s debt collection has slowed despite attempts by the liquidator to reclaim some of the $750 million handed out in unsecured loans; the majority of Globe Trust debtors have ignored repeated calls by Ali to repay, and only a tiny fraction of the funds has been recovered.
But Ali continues to pursue debtors in the court and he disclosed that next month several of the matters are coming up for hearing. He noted that the majority of the cases are against former directors of the institution, two of whom are now deceased.
He mentioned that matters had been filed against former Chief Executive Officer, Stephen Backer; Jonas Sampson who is deceased; Peter Britton who is also deceased and Loaknauth Persaud among others.
On September 8 this year Ali held a public meeting with depositors of Globe Trust outlining what the Schedule of Steps involved. He said that a move was later made to the court for an interpretation of a section of the law governing the liquidation and a subsequent ruling by the acting Chief Justice paved the way for the small depositors to be paid.
In October 2008, Justice Chang had issued an order for the compulsory liquidation of Globe Trust following a High Court application by the Bank of Guyana (BoG).
The company came crashing down after issuing many unsecured loans among other dubious practices.
The BoG filed an application asking that an order be granted for the compulsory liquidation of GTICL as provided for under the Financial Institutions Act after an investment deal for the troubled institution failed to materialise. It was the second such application; the first was filed in 2002 after which numerous depositors had intervened.