SOCU charges GBTI directors with contempt

-over failure to produce documents in court order

Less than a day before the High Court is scheduled to hear an application from the Guyana Bank for Trade and Industry (GBTI) on the production of key documents, the Special Organised Crime Unit (SOCU) yesterday charged the bank’s directors with contempt and they are to appear in a Georgetown Magistrate’s Court on Monday to answer.

Stabroek News was reliably informed that the charge was instituted based on the advice of the Chambers of the Director of Public Prosecutions (DPP) following a second review of the case file.

This newspaper was told that Chairman Robin Stoby SC, John Tracey, Edward Beharry, Suresh Beharry, Kathryn Eytle- McLean, Basil Mahadeo, Carlton James and Richard Isava have been charged with the failure to comply with a production order. They were all invited to SOCU’s Camp Street Headquarters, where they were charged.

The contempt proceedings stemmed from the bank’s failure to comply with a production order made by the acting Chief Justice Roxane George SC on August 29. The bank subsequently said in a newspaper advertisement that in areas where the laws may conflict, the bank takes the position that “its primary duty is to protect the interests of its customers” and maintain the confidentiality associated with its fiduciary relationship with them.

The bank has contended in its application for the variation of the order granted by Justice George that countless efforts were made to gather all the documents requested but it was discovered that some were either destroyed or could not be found. It insists that it has complied to some extent with the requests of SOCU as thousands of documents have already been delivered.

The documents are pertinent to the ongoing US$500M Guyana Rice Development Board (GRDB) probe being conducted by SOCU. The bank’s failure to hand over the documents has stalled the probe and has since led to a clash between GBTI and SOCU.

The bank’s recent application was made by law firm Cameron and Shepherd. Attempts by Stabroek News to obtain a copy of the application from SOCU proved futile.

According to the court documents, the bank and its directors sought to be relieved from having to produce documents referr-ed to in the order that was previously granted on the grounds that they have “either been destroyed by the Applicant after the Applicants’ retention period had expired or they have been lost and cannot be found despite diligent efforts of the claimant to find them, accordingly it is impossible for the Applicants to produce these documents.”

It was explained in the application that some of the documents were likely lost as a result of misfiling.

Alternatively, the court is being asked to grant an extension or stay of three weeks from the date of the order to enable the bank to make “further checks to seek to find and to produce such of those documents to which the order…refers which can be found after all extended efforts are made by the Applicant, in the category of documents thought to have been destroyed under the applicants’ retention rules or which cannot currently be found despite reasonable efforts of the applicant to find them to date.”

The bank and its directors are also asking the court for an interim stay of all further proceedings.

‘Unfair’

Shaleeza Shaw, the bank’s acting Chief Executive Officer (CEO), in an affidavit in support of the bank’s application, said that GRDB has been a customer since 1995 and this relationship has resulted in the processing of thousands of banking transactions each year. She pointed to the bank’s processing of receipts and payments to rice farmers and rice millers in or around crop time, that is June to August and November to February, each year. She said that GRDB became a more active account when it began to handle payments to rice millers under the PetroCaribe rice for oil deal between the Government of Guyana and the Government of Venezuela, sometime around 2010, which spurred the growth of the rice sector.

Shaw said during 2017, it became apparent that GRDB and its officers were the subject of a possible criminal investigation by SOCU and as a result of this requests were made by the unit for information “thought to be available at the Bank concerning the transactions of the GRDB and its officers for several years past.”

According to the CEO, the first sets of requests were made pursuant to court orders dated 14th February, 2017; 20th June, 2017; 29th June, 2017 and 25th August, 2017. She said that these requests were promptly answered as best as possible on 11th July, 2017; 9th August, 2017; 16th August and 6th September, 2017. “However SOCU expressed their dissatisfaction with the manner and degree of the bank’s answers and subsequently obtained a Production Order …directing production of the category of documents listed in the said order on or before 6th September, 2017,” she added.

She said that for security reasons, a copy of the said order will be laid over with the court when the application for variation is heard.

Shaw said in her affidavit that the bank sought to comply with the order made by Justice George and researched hundreds of thousands of documents in its archives for the periods in question, with a response that was given in batches on August 31, 2017; September 6, 2017; September 8, 2017; September 11, 2017; September 12, 2017 and September 13, 2017.

“However the response by the bank was deemed by the SOCU to be unacceptable for reasons inter alia of unacceptable format, method and orderliness of presentation, unacceptable method of certifying and non-production of some of the material thought to be required by the SOCU whether or not specified in the order,” she said,  while adding that the bank together with the directors were individually sent a threatening letter written by SOCU head Sydney James on September 18th, 2017, advising of the unit’s intention to seek contempt of court proceedings.

Clarifying

Shaw stated that with the assistance of Stoby, SOCU, through its head, was approached with a view to clarifying the difficulties and the alleged non-compliance of the bank. It is stated that a letter, dated September 19, 2017, was penned to James giving an undertaking that the problem will be urgently addressed.

According to the affidavit, James, in response, gave the bank seven days to resubmit the requested documents in a certified format and with an orderly presentation suitable to the needs of SOCU. “This indulgence from SOCU was promptly acted upon by the bank which was able to deliver the re-submitted documents in the required format that is to say, each page of a document stamped and signed as certified by Tuesday 26th September, 2017,” Shaw said.

According to Shaw, James has taken issue with the 70 members of staff and management information supplied, particularly the notion by the bank in its letter of delivery of the destruction of some of the documents, which were past the bank’s retention period and which occurred prior to any inkling by the bank of criminal investigations being carried out into GRDB and its officers, and its inability to locate others.

Shaw stressed that the bank directed its staff to “devote its energy” to complying with the requests of SOCU even in the “devotion of their weekend time” so as to achieve the objectives sought by SOCU. “Seventy members of staff and management have spent their working hours and overtime in seeking to put together the requested documents, with a total of 1,454 man hours spent,” she said.

Included in the affidavit is a computation of the staff and hours spent acquiring the information requested up to September 25th, 2017.

Shaw pointed out that the bank takes issue with James’ assertion that the non-production was “deliberate.” “The same is totally untrue and a [n] incorrect and misleading understanding of the Bank’s efforts,” she said.

She added that after a meeting on September 28th, 2017 between Stoby and James, the bank again wrote to SOCU requesting a further extension of time beyond the said 29th day of September, 2017 to make further searches for the documents not previously found by the bank. “It is to be noted that as of the 25th of September, 2017, a total of 9,000 plus documents were certified and delivered to the SOCU under the said production order and in the bank’s estimation only about 150 documents were not delivered for reasons stated aforesaid,”  she said.

Shaw went on to explain that GBTI inherited from Barclays Bank, the banking custom of “retaining documents described as ‘general correspondence’ for a period of three years. Other documents were kept for a period of five to seven years depending on their contents.” Attached to the application is an extract of the retention of period for general correspondence from the bank’s master list operated by the bank in excess of 20 years. It was stated that some of the documents being requested by SOCU were destroyed three years ago.

Shaw said in her affidavit  that of the documents listed, some are capable of having the content obtained from other documents which were supplied to SOCU.

Shaw went on to list a number of letters, foreign currency vouchers, wire transfers and cheques (which are mailed out to customers and for which no digital copy was kept prior to June 2016 when the bank’s Document Management System was put in place) which cannot currently be found.

“Complaints have been unfairly made that the bank should have made imaging copies of all documents as a fall back but this was not a requisite under the FIA nor was the bank able to commence imaging of checks from the year 2015 when the E Clearings system was introduced into the banking sector,” Shaw said, before adding that it was not until June, 2016 that the bank acquired the computer software and hardware to do document management, including scanning of banking documents. “In consequence no documents prior to the year 2015 would have been retained in digital format,” she said.

Shaw said that with the inability to fulfill all the requirements of SOCU, the bank on September 27th, 2017, commenced a special audit of the archiving system to determine the degree of errors that may have occurred in the archiving of documents. She said that 113 researchers were employed to “painstakingly” go through each year of filing commencing from the year 2010 to try and discover if the missing documents have been misfiled due to human error.

She stated that approximately 500 additional documents were delivered to SOCU on the 5th and 6th of October in addition to those previously submitted after a further expenditure of 3625.25 man hours in the process.

According to Shaw there was no response to the bank’s letters and a senior staff who helped in the delivery of the latest set of documents to SOCU on 6th October 2017 has since advised that James indicated that a file had been sent to the DPP for its advice regarding charging the bank for contempt.

The application will be heard at 1 pm today by Justice George.

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