Dear Editor,
I refer to the article entitled `Will NICIL be different’ by Rawle Lucas in the Sunday Stabroek Business Page of2015-10-11. I cannot believe that Mr. Lucas does not know what is correct and would set out to deliberately mislead the public so!
What am I referring to? His claim in that article, that:
“The PPP/C Government intended to sell the hotel to private investors for US$8 Million. In exchange, it would give up two-thirds of the ownership of the company. The people of Guyana would have ended up subsidising the purchase of the private investor to the tune of US$22 million”.
In the following paragraph he reinforces the false claim of a subsidy, stating:
“The (PPP/C) Government behaved as if it was holding a bad asset and needed to sell it at a deep discount in order to get it off its hands”.
No such thing. No deep subsidy. No bad asset. No discount. No loss of US$22 million by the Government and people of Guyana. No giveaway. No corruption, but a professional job well done, for the good of the people and country of Guyana.
I find it hard to believe that Mr. Rawle Lucas does not know what is the abc in business and accounting!
Companies are financed by a combination of monies coming from Owners, (called equity) and loans from Lenders (called debts).
It is the two together, equity plus debt, which finance the company. When someone sells or buys equity in the company, the debt obligations remain part of the company. These who loaned money continue to have their claims on the company. The loan obligations are not attached to the owners of the equity.
The above is an early lesson in business and accounting and I cannot believe that Mr. Rawle Lucas does not know the above.
Why does he choose to be so wrong?
Yours faithfully,
Sam A Hinds
