NICIL to have special section in the Auditor General’s 2011 report – Deodat Sharma
“Who is guaranteeing that all monies belonging to the consolidated fund end up in the Consolidated Fund?”- Former Auditor General
By Rabindra Rooplall
The state-owned National Industrial, Commercial and Investments Limited (NICIL) had not filed an annual return for the past 20 years at the Deeds Registry. At the same time billions of dollars have been moved from the Consolidated Fund.
This is according to Christopher Ram, whose company Ram and McRae has been conducting reviews of Guyana’s budget for the last few years. He was speaking at a Good Business workshop hosted by Transparency Institute Guyana Inc (TIGI) yesterday at Moray House, Camp and Quamina Streets.
At the event was Auditor General (ag) Deodat Sharma, Canadian High Commissioner David Devine, Director of TIGI Chantalle Haynes, members of the diplomatic corps, former Auditor General Dr. Anand Goolsaran and special invitees.
According to Christopher Ram, the privatization of state assets used to be done by the Ministry of Finance and in accordance with article 216 of the constitution, the money must be placed in the Consolidated Fund.
However, over the past few years there has been an increasing tendency by the government whenever it wished to divert state assets, to vest those assets in an institution that is controlled by Cabinet and called (NICIL). The proceeds are then used by NICIL as it wishes, Ram said.
Ram questioned whether the Auditor General’s office is concerned that billions of dollars was moved by the government directly from the Consolidated Fund to NICIL, and if the Auditor General sought independent advice as to the constitutionality of the practice.
“As the holder of a constitutional office the Auditor General is not supposed to be seeking advice from the Executive, the Attorney General, as was done with the lottery funds…Have you sought advice on the constitutionality and the propriety of this practice that seems to go through the back door?” Ram questioned.
The Auditor General (ag) Deodat Sharma declined to answer the question but said that his office has been covering the audits of NICIL, but since it’s a separate company it has been audited separately. The subject Minister is responsible for laying those reports, independently, in Parliament, Sharma said.
He noted that NCIL has been audited up to 2004.
Adding that NICIL will have a special section in the Auditor General 2011 report for its review, Sharma said these will include all the sales and the proceeds that were given to NICIL.
Commenting on the issues, former Auditor General Dr. Anand Goolsaran said that the formation of NICIL in 1991 was intended to create an organization to manage the surplus assets emanating from the divestments under the previous administration.
“From what I see now coming back after seven years, things have spiraled out of control as far as NICIL is concerned. I don’t think the intention was to collect money, retain money and to spend money. I don’t think the intention was to still sell state assets.
“The documents which created NICIL should be checked to see if it is working in accordance with that, and if not that should be raised by the Auditor General,” Goolsaran emphatically said.
He explained that all public revenues have to be placed in the Consolidated Fund. This is not happening at present and is a serious concern.
Adding that the Consolidated Fund is managed by the National Assembly which has to sanction all expenditure, Goolsaran said. “Who is guaranteeing that all monies belonging to the Consolidated Fund is ending up in the Consolidated Fund?”
Dr. Goolsaran recently reiterated his position that the 24 per cent proceeds from the Guyana Lottery Fund from which the government has received several billion dollars should be turned over to the Consolidated Fund where it would be subject to Parliamentary Scrutiny.
He says that Office of the President’s action is tantamount to circumventing Parliament’s authority. “I also noted the 2010 report and there is a part in the financial statement which says that $33 billion was moved from special bank accounts into the Consolidated Fund.
“Those special bank accounts have been reported on for years. The explanatory notes say that the money has been transferred to the Consolidated Fund but I looked at the published accounts which should reflect the receipts and payments to the Consolidate Fund but I am not seeing it,” Goolsaran underscored.
NICIL was established under the former Companies Act and the Public Corporations Act to subscribe for, take or otherwise acquire and hold the government shares, stocks, debentures or other securities of any company, co-operatives societies or body corporate.
Among the most notable of the questionable transactions done in 2010 by NICIL was the transfer of Government land at Liliendaal and Pattensen, East Coast Demerara, to NICIL.
This land, 103.88 acres, was in turn sold to National Hardware Guyana Limited for $600M.
This is in direct violation to the Constitution and the Fiscal Management and Accountability Act which state that monies should be placed in the Consolidated Fund, from which it can only be withdrawn with parliamentary approval.
Another property was transferred from NICIL to Queens Atlantic Investment Inc. headed by Dr. Ranjisinghi ‘Bobby’ Ramroop.
This property, worth billions of dollars, has been identified as 4702 Plantation Ruimveldt, with an area of 18.871 acres. The sale price is still unknown.
There was no known advertisement of this transfer nor was there a tender.
With the absence of any annual reports for NICIL since 2002, there are no indications that any monies will be paid to the fund.