NICIL rejects ‘totally unacceptable’ offer from Chinese company over GTT shares money

 -arbitration closer

Horace James

Head of the National Industrial and Commercial Investments Limited (NICIL) Horace James said yesterday that the offer made by Hong Kong Golden Telecom Limited (HKGT) in relation to the outstanding US$5 million for the purchase of government shares in the Guyana Telephone and Telegraph Company (GTT) was declined as it was found to be “totally acceptable”.

He made this disclosure during an interview with Stabroek News at his new office located next door to the Guyana Revenue Authority (GRA) on Camp Street. The building which housed the entity at Barrack Street, Kingston is currently undergoing major repairs.

“Well we didn’t accept it. The conditions weren’t suitable for us [so] we are back where we started”, James said.

The shares were sold to the Chinese firm in 2012. The deal was entered into by the PPP/C administration but only US$25 million of the agreed US$30 million was known to have been paid.

In March, 2016, State Minister Joseph Harmon and a delegation controversially travelled to China to engage in discussions regarding the outstanding money.

While it was later stated that Harmon had obtained documents which showed that the money was paid over prior to the APNU+AFC coalition taking office and efforts were underway to track the money, NICIL had said that it had not received the outstanding balance. The government later clarified that no such documents were received.

Since then the two sides were locked in negotiations. In February, James had said that a deadline had been set for the end of the 1st quarter to conclude negotiations.

Given the present situation, James told Stabroek News that government will now have to advise the entity “when and if” it should go to arbitration. “We didn’t settle anything with them”, he reiterated.

In December, 2016 it was revealed that NICIL was on the verge of preparing to begin arbitration to recover the outstanding balance. James had informed at that time, that the entity had already started consultations with the US lawyer that helped the company to draft the sales agreement. A firm in the UK was recommended for the arbitration aspect of the matter, he had said, before explaining that it was important that UK-based legal experts were used as the arbitration would take place in London.

“We will seek all the relief measures that the agreement grants to us, which will be among other things not only the recovery of our US$5 million but also interest, legal fees… We are going for the entire thing and also not only the signatory to the agreement, we are also going after the guarantor,” he had explained to reporters, while noting that NICIL’s lawyers had presented all the issues concerning the share sale and had advised that NICIL had a “very good chance” of getting all the relief that was being sought.

However, it was subsequently decided that NICIL would engage HKGT on a one-on-one basis as opposed to getting a third party involved.

James yesterday informed that there is a “strong possibility” that the matter will have to go to arbitration.

In February, this newspaper reported that NICIL was inclined to accept a US$3 million offer, which would soon engage the attention of Cabinet.  Harmon subsequently told this newspaper that the US$3 million payment was not finalised, before noting that government’s aim is to recover the entire sum owed.

“It is not final as yet. Nothing is final because we are still striving to get our US$5 million,” Harmon had said when contacted. He had confirmed that the Chinese company had made an offer. “Yes there had been an offer,” he had said, before adding that it is being considered because no one “throws away money.”

He had stressed on the fact that government is “looking to get all of our money. That’s an offer on the table. We’re looking at it.”

When asked if the proposed amount was one of the things that NICIL found unacceptable, James responded in the affirmative.  “The conditions were totally not acceptable to NICIL”, he said.

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