The Guyana Securities Council (GSC) has advised shareholders in the Guyana Stockfeeds Inc (GSI) to seek independent advice after conflicting reports by the company on the payment of dividends for 2012.
The council yesterday said GSI did not pay dividends for the 2012 financial year as it had publicly stated in its interim report for January to June 2013.
In a public advisory in yesterday’s Stabroek News, the GSC said that GSI published its interim report for the first half of 2013 in the September 20th, 2013 edition of Stabroek News and stated that it had paid dividends totalling $80M.
“The Guyana Securities Council was notified by several shareholders that they did not receive any dividend payments for that period,” the GSC, however, noted. As a result, the council said that it then contacted GSI and its attorney advised that no dividends were paid for the 2012 financial year.
The GSC said that it subsequently wrote to GSI on November 14, 2013 and November 25, 2013 stating that the January to June, 2013 Interim report was incorrect and must be corrected and disseminated in the same way as the incorrect interim report. The GSC said that to date GSI has not replied.
As a result, the council is advising all shareholders to seek independent advice.
Attempts to reach GSI Chairman and CEO Robert Badal for comment on the situation were unsuccessful as this newspaper was told that he was overseas.
In May last year, former Sunday Stabroek columnist Christopher Ram had commented on the results of the company for 2012 and found that an increase in sales of 13.3% did not translate into income and profits as margins were squeezed with raw materials and consumables accounting for 91% of revenue, up from 90%. He said the company continued to incur high professional fees of $71 million compared with $64.9 million in 2011. He further said the notes to the financial statements indicated that Guyana Stockfeeds Limited, a wholly-owned company incorporated under the laws of Trinidad and Tobago, undertook transactions amounting to $771 million on behalf of the Guyana company and also received $30 million as “Reimbursement of cost incurred.”
Ram also said that despite only a modest increase in the value of net assets, property tax rose from $11 million to $15.2 million, the reason for which was not immediately apparent.
He further noted that as a result of a challenge in the High Court of Guyana by the government holding company National Industrial and Commercial Investment Limited (NICIL), a shareholder of the company, the company was not permitted to issue any new shares until the outcome of the matter is fully settled. The regulator, the Guyana Association of Securities Companies and Intermediaries Inc (GASCI), has suspended trading of the company’s shares until the matter is settled, he added. It was also noted that the company was a defendant in two matters being addressed by the court but in both cases the company’s attorneys assured that it had a good defence.
The shares in Guyana Stockfeeds Inc are owned 85.87% Badal. Ram said he had heard complaints from shareholders that Badal treated the company like a personal property and was even inaccessible to them and he suggested that it would be a good idea for some arrangement to be worked out with the minority shareholders.