Brassington made brother second largest shareholder in Hand in Hand Trust
“In 2009, a Brassington became the second largest shareholder in a Brassington-privatized company…This is not only corruption: it meets the test of fraud,” Ramjattan
There is enough information in the public domain to establish beyond a shadow of a doubt that Winston Brassington, the Executive Director of the National Industrial and Commercial Investments Limited (NICIL) abused the financial information that he was in possession of, when he purchased for his brother, Jonathan, a $225M stake in Hand in Hand Trust Corporation, says Chairman of the Alliance for Change (AFC) Khemraj Ramjattan.
Ramjattan is the person who first blew the whistle on the questionable transaction involving the Brassingtons.
As such the Parliamentarian says that Head of State, Donald Ramotar, will be undergoing a strenuous examination as it relates to his resolve to address corruption in Guyana on the Brassington matter.
Ramjattan explained that he will be seeking A Partnership for National Unity (APNU’s) support in bringing to the House, legislation to deal with the issue of the abuse of insider information as has been aptly demonstrated in what is now being termed the ‘Brassington’s quandary.’
Commenting on a column by Attorney-at-Law and Eminent Chartered Accountant, Christopher Ram, Ramjattan says that it illustrates the depth of the quandary emanating from the sale of shares in Hand in Hand Trust Corporation.
Ramjattan says that the party will be looking to have in place the legislation to curb the practice, but it will essentially have to be assented to by President Ramotar.
This will be the test of the President’s resolve to tackle corruption.
In Ram’s article he pointed to the deficiencies in the Guyana Legislation. Ram said that: – “More developed markets and economies have been grappling with the phenomenon of insider dealing for decades. These almost invariably deal with the use of information by “insiders” a term generally defined to mean directors and officers but which in some cases include a 10 per cent shareholder as NICIL is in Hand-in-Hand Trust.”
Ram posited that “the rationale here is that of the fiduciary obligation imposed by law on those in a position of trust, an obligation owed in any case to the company and not to any shareholder or member of the public.”
He says that Guyana’s general laws on the use of insider information are not well developed and any progress appears to have ceased with the Securities Industry Act 1998.
“The 1991 Companies Act was an improvement over the Companies Act it replaced, but as far as insider trading goes, it deals with the concept only in respect of narrowly defined transactions and persons…The Financial Institutions Act and the Securities Industry Act are both limited in their scope and only to companies within the ambit of those two Acts.”
The FIA’s provisions deal with conflicts of interest involving directors and officers and the disclosure of customer information, while the SIA defines “insider” to include a person (an outsider) who is informed of a material confidential fact by an insider.
This is not unlike the UK Criminal Justice Act 1993 which creates a distinction between a primary insider (a person who has direct knowledge of inside information) and a secondary insider (a person who learns inside information from an inside source).
Under this definition, “Winston Brassington would clearly be, at the very least, a secondary insider, except that the SIA deals only with a certain kind of company.”
Ramjattan in his query asked as did Ram, whether Jonathan Brassington knew of the offer of the shares in Hand in Hand Trust through a public advertisement or by way of his brother Winston, who would have known of the offer as a shareholder representing NICIL.
He suggested that in any other Caribbean country, Brassington would have already been prosecuted.
Ramjattan told this publication that he is privy to information which suggests that the President may not be too pleased with the affair involving Brassington and his brother, Jonathan.
In 2002, NICIL headed by Winston Brassington, privatized Guyana National Cooperative Bank (GNCB) Trust and kept 250,000 shares in the new company, Hand in Hand Trust Corporation.
Seven years later in 2009 the Board of Directors at Hand in Hand Trust Corporation expanded the shares in the company from 2.5 milllion to 7.5 million.
Winston Brassington bought an additional 50,000 shares for NICIL and 2.25 million shares in his brother, Jonathan Brassington’s name.
Ramjattan has labeled this transaction as another in a string of incestuous dealings. He said that in 2009 “a Brassington became the second largest shareholder in a Brassington-privatized company…This is not only corruption: it meets the test of fraud.”