NICIL breaking laws by retaining public funds

-Ram

Chartered accountant and attorney Christopher Ram is challenging Minister of Finance Dr. Ashni Singh and Head of the Presidential Secretariat Dr. Roger Luncheon over the propriety of the National Industrial and Commercial Investments Inc (NICIL) retaining and spending the funds it receives from the sale of state assets.

Ram, saying the funds are public assets, argues that the law dictates that NICIL should transfer them to the Consolidated Fund.

In a letter to this newspaper last week, Ram called Luncheon’s description of NICIL as a “private company” by with the legal right to withhold public funds “misinformed” and “mischievous.”

Speaking at a press conference last week Monday, Minister Singh defended NICIL’s modus operandi and stated it was in compliance with the Companies Act. “NICIL’s operations are completely consistent with what is provided for in the Companies Act and one cannot argue that NICIL funds should come into the Consolidated Fund and not argue the same for any other government company,” he added, saying there are several other companies that are state-owned that operate under the Companies Act and conduct their activities, including retaining revenues and meeting their costs. “NICIL is no different in this regard,” he further emphasised.

“It is sad and even dangerous, that individuals with the power to make major decisions over the resources of the country and the lives of its people can be so deficient in their knowledge and reckless in their actions,” Ram, however, said.

That Dr Luncheon informed the media that there are 20-something articles that underpin the creation of NICIL and none of them says that money from NICIL has to be put in the Consolidated Fund, is wrong, Ram wrote.

“In fact, the Articles of Continuance of NICIL comprise nine articles and it operates under, and is classified by the Companies Act 1991 as a “Government Company.” The Act imposes on NICIL the following obligations over and above those imposed on companies generally:

1. That sections 48 and 49 of the Public Corporations Act dealing with accounts and audits apply;

2. NICIL is required to submit to the Minister of Finance an account of its transactions and audited financial statements no later than June 30 of the following year; and

3. The Minister of Finance is required to lay in the National Assembly the statement of transactions and the audited financial statements no later than September 30, i.e., within 90 days of receiving them.

“The public is reminded that the Chairman of NICIL is Dr. Ashni Singh and the Minister to whom he must submit the report and accounts is the same Dr Ashni Singh. If it was only these breaches of which he is derelict, it would still be a serious matter. But there are more, and worse.

The Government of Guyana ‘vests’ lands and other properties in NICIL – on whose Board also sit Drs Luncheon and other Cabinet members – which then sells the assets and pockets the money. The government also uses NICIL to collect dividends from Guyoil, GT&T and other investments which are also retained by NICIL,” Ram said in his letter.

Ram suggested that the NICIL “scheme” has become a ruse to get around Article 216 of the Constitution, which requires that all revenues raised or received by Guyana to be paid into and form one Consolidated Fund.

“By their own boasts, NICIL has collected tens of billions of dollars and not paid these into the Consolidated Fund. To any ordinary person, so far as the land transactions are concerned, NICIL is merely an agent for the government. Therefore, the monies it collects should be paid over to the Ministry of Finance to be deposited into the Consolidated Fund,” Ram said.

He added that instead, “in an arrangement which in neighbouring Trinidad would be considered criminal,” NICIL’s board uses the funds “as a second budget to do the things which the Finance Minister would not be comfortable in bringing to the National Assembly.”

Ram suggested that the courts in Guyana, and, if necessary, the Caribbean Court of Justice, should be invited to address the situation.

Acting Auditor General Deodat Sharma revealed last months that he will dedicate a special section of his 2011 report to examine issues related to NICIL and the Lotto Funds.