Former Auditor General Anand Goolsarran says the National Industrial and Com-mercial Investments Limited (NICIL) is not a public corporation as Government purports and therefore moveable and immoveable property cannot be vested in it.
He made these remarks in an article published on Monday in the Stabroek News as part of his weekly ‘Accountability Watch’ columns. NICIL has been at the centre of a long-running controversy over the legitimacy of its actions and the state of its accounts.
“NICIL is a body corporate owned by the State and a private limited liability company incorporated under the Com-panies Act. While Section 6 of the Public Corporations Act permits the concerned Minister, by order, to reconstitute a company in which the controlling interest vests in the State into a public corporation, this was not done in respect to NICIL,” he said.
“NICIL is therefore not a public corporation in the context of Sections 3 and 6. It follows that section 5 is not applicable, and therefore moveable and immoveable property of the State cannot be vested in NICIL,” he said.
With regards to the establishment of public corporations, Goolsarran said that the Public Corporations Act 1988 provides for the dissolution of the Guyana State Corporation and the vesting of its assets in the State. “It also amends the law relating to the establishment and management of public corporations,” he said.
He noted that the Act defines “corporation” as: (a) Every existing corporation; and (b) Every public corporation established under Section 3 and every corporation which comes into existence as a result of the reconstitution of any body-corporate under Section 6, or merger of two or more corporations under section 7.
Goolsarran said that regarding Section 66 of the Companies Act, the Minister has not notified in the Gazette that any of the provisions of the Act, with or without modifications, have been made applicable to NICIL.
“Reference to Section 66 in an order does not satisfy the requirements of that section,” he said.
He noted that in all probability, the transfers to NICIL would have been made for zero consideration, as was the case of the transfer of Government shares in other state-owned/controlled entities as well as other investments. “As such, any disposal of such assets by way of sale would provide NICIL with a windfall gain if the proceeds are not paid over to the Consolidated Fund,” he said
Goolsarran noted that Section 23 of the Public Corporations Act empowers the concerned Minister to give specific directions in respect of: (a) the disposal of capital assets of a corporation; and (b) the application of the proceeds, including paying over to the Consolidated Fund the whole or part of such proceeds.
“Capital assets are those assets owned by an entity that are integral to its operations. As such, any disposal would be in relation to assets that are surplus to the operational requirements of the entity,” he said.
“The Minister did not apply Section 23 to the sale to third parties of numerous State assets that were vested in NICIL. Instead, he incorrectly used Section 8 that refers to transfers to corporations. Nor did the Minister arrange for the proceeds of the sale to be paid over to the Consolidated Fund. Instead, he allowed NICIL to retain such proceeds to be used at the discretion of its directors,” Goolsarran said.
He pointed out that the Minister of Finance has misapplied the provisions of the Public Corporations Act “in vesting billions of dollars of State assets in NICIL’s name; in selling them to third parties; and in allowing NICIL to retain the proceeds.” He said that the way forward should be a judicial review, should Government continue to defend its actions and not take remedial measures.
