NICIL should have appealed Guyana Stockfeeds share dilution decision to CCJ


Robert Badal

The People’s Progressive Party (PPP) says state holding company NICIL should have appealed a Guyana Court of Appeal decision on the share dilution by Guyana Stockfeeds Limited (GSL) in 2000 to the Caribbean Court of Justice.

It also accused Robert Badal, the Chief Executive Officer of GSL of involvement in practices which were detrimental to minority shareholders and the state but beneficial to him and the companies he was affiliated with.

In a press release, the PPP also took aim at Badal’s close relationship with the Alliance for Change (AFC) which is part of the governing coalition.

The release earlier this month was a follow up to PPP General Secretary Bharrat Jagdeo’s comments about GSL shareholding held by National Industrial and Commercial Investments Limited (NICIL) and Badal’s response which was published subsequently in the Kaieteur News.

Stabroek News made numerous efforts to contact Badal who is also the owner of the Pegasus Hotel,  for comment on the PPP claims but was unsuccessful.

According to the release, Badal in the newspaper article spoke to the status of the court matter brought by NICIL against GSL on its 2000 Rights Issue and the 2008 decision of Justice Jainarine Singh which rendered the 2000 Rights Issue (and subsequent bonus issue) illegal, null and void. 

The 2008 High Court decision returned NICIL shareholding to 38% from the diluted 7%. The release added that Badal in the newspaper article “contemptuously” argued that the High Court decision was tainted and influenced by the PPP administration and that the Appeal Court decision of 2017 validated the reduction of the NICIL shareholding from 38% before the Rights Issue and Bonus Issue to 7%.

In trying to set the record straight, the party explained that in September, 2008, Justice Singh issued a decision that Badal’s Rights Issue and Bonus Issue, diluting NICIL from 38% to 7% was, illegal, null, and void. 

The PPP pointed out that in late 2008, Badal, instead of honouring the High Court decision and restoring NICIL to its former 38% shareholding, appealed and obtained a “stay of execution of Justice Singh’s ruling. 

“The matter languished in (the) Court of Appeal until 2017, some 10 years later when the matter came on for hearing, with the Court of Appeal ruling in Mr. Badal’s favour”, the release said, while adding that at the time of the hearing of the appeal, NICIL was under the control of APNU+AFC Government. 

According to the release, it is not clear if NICIL, under APNU+AFC control, defended the case properly or at all but after the High Court ruling was overturned by the Appeal Court, NICIL chose not to appeal the matter to the CCJ.  As a result NICIL’s shareholding was left at 7%.

“It is a well-known fact that Mr Badal was a significant supporter of the AFC and coalition Government.  He campaigned for the AFC.  He financially supported the AFC.  He took out full page ads in support of AFC and the APNU+AFC coalition.  He spoke at rallies under the APNU+AFC banner.  One therefore questions whether APNU was simply rewarding Mr Badal by not defending the court matter and not appealing it to CCJ”, the release said before adding that one also can question why the State Assets Recovery Agency (SARA) is not investigating this matter.

According to the PPP, Badal engaged in numerous practices to the detriment of the state and minority shareholders.  Among the examples listed were the incorporation of a company in Trinidad, with the exact same name—Guyana Stockfeeds which was used to conduct billions of dollars of transactions on behalf of the Guyana based company.

When NEOFI, an edible oil company, solely owned by Badal ran into financial trouble, it was the local company that bought over the asset thus bailing out the company owned 100% by Badal.


The PPP also cited the reversal of the sale of Popeyes from GSL to his own name for his own benefit and the failure of GSL to attract profits in keeping with the significant growth and new investments.

The PPP alleges that because of the dealings with related companies, these “lost” profits were likely enjoyed by companies owned or related to Badal.

The PPP then went on to explain why the dilution of GSL shares from 38% to 7% deprived the State of revenue

The press release explained that in October 1997, Badal bought 35% of the shares of GSL, costing approximately $650 per share. On a proportional basis, NICIL retained 38% with implied valuation of US$$980, 000 the press release pointed out.

In 2000, with sales and profit increasing significantly from 1997, the book value of each share was over $1000 but under the Rights Issue in year 2000, each share was sold for only $15.

“NICIL’s dilution from 38% to 7% that occurred in 2000 reduced its shareholding then by over US$1M.  Today, this value is at least 5 times as much given that GSL sales has increased many times over”, the release said.

It added that NICIL made many arguments before the High Court, most importantly, that Badal had significantly underpriced the shares in his Rights Issue in year 2000 to the detriment of any minority shareholder who did not subscribe.  Although the Rights Issue increased the number of shares by over 400%, only $35M Guyana dollars was raised.

According to the release, Badal’s stated reason for use of the funds, was to build a wharf on land owned by NICIL, for which permission had not been granted.  “As such, the use of proceeds was for an illegal action or one where no permission existed.   Mr. Badal acquired almost all remaining shares not subscribed for, at the heavily discounted price, thus personally benefitting from his action”, it was stated.

It was stated that in 2017, given the significance of the loss of shareholder value to the State flowing from the Appeal Court ruling, NICIL Directors ought to have referred the matter to the Caribbean Court of Justice (CCJ). 

“This did not happen.  One can only assume that given Mr. Badal’s influence as a significant political contributor and supporter, that the APNU+AFC administration looked the other way”, the release said.

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