Former Chairman of the Board of the National Insurance Scheme (NIS) Dr Roger Luncheon has committed to providing a comprehensive response to the published results of the forensic audit of the scheme in a week’s time.
“I am prepared to do what is professionally responsible but I have not been invited to respond. It is the responsibility of the auditor and or the authority that committed to having a forensic audit to have the principals respond to a draft before a finalised report is filed. Inviting comments from the principals allows for correction of misrepresentations. I have not been given official access to the report and will not respond to what I’ve seen in the newspapers until I can verify the information,” Luncheon told Stabroek News.
He added that having been Cabinet Secretary for 23 years, he is familiar with audits for which the recognised procedure is to offer the principals the right to respond
Asked if he would be willing to access the report, which has been made publicly available on the ministry’s website, Luncheon said that he would “download the report and share it with the seven members of the board who have been replaced and we will come up with a response within one week.”
The audit, conducted by Ramesh Seebaran and made public on the Ministry of Finance’s website, noted, among other things, that “Cabinet had significant input over the board and made certain decisions which the directors accepted without any discussions, analysis and due diligence to determine the merits of the decisions.”
One such decision was the $2.59B investment in the troubled Berbice Bridge Company Inc. (BBCI) as well as other investments which have left the Scheme in a dire condition.
According to the report, this investment into “a company (BBCI) which is making losses and which has many issues surrounding its going concern” was executed by the last board of the Scheme “without proper due diligence.” Instead, the board “accepted decisions made by Cabinet.”
The report notes that in the minutes of the 445th Board of Directors (BOD) meeting, it is stated that “the chairman (Dr Luncheon) informed directors that approval was given by Cabinet for National Industrial and Commercial Investments Limited (NICIL) to sell 950,000 preference shares held in BBCI to NIS at par value.”
It goes on to state that Cabinet’s decision was “countenanced by directors,” who in effect made no attempt to determine whether the investment was in the best interest of the scheme.
This decision came exactly one meeting after “directors expressed a disinterest in the BBCI investment offer” and “the chairman expressed concern about the inordinate risk concentrated in the portfolio.”