NICIL VS Guyana Stores Limited…Brassington grilled over audit reports
The High Court action between the National Industrial and Commercial Investment Limited and Royal Investment Inc. which owns and operates Guyana Stores, was again called up before Justice Roxanne George-Wiltshire, yesterday.
Royal Investment Inc. is headed by proprietor Tony Yassin. NICIL is being represented by Rafiq Turhan Khan, while Yassin is being represented by Senior Counsel Rex Mc Kay and Edward Luckhoo.
Royal Investment Inc. has been sued by the Privatisation Unit/ NICIL for failing to pay the balance of US$2 million for the 70 million shares in Guyana Stores which the company acquired for US$6million.
At yesterday’s hearing, Head of the Privatization Unit, Winston Brassington, was cross-examined by Senior Counsel McKay about several annual audited reports of Guyana Stores Limited. Brassington was first asked if he had ever seen Guyana Stores’ 2000 audited report. The witness said that he had never seen it. There was no objection for the document to be tendered into evidence. Brassington was questioned about the authorization of the payment of dividends. According to the witness he was aware that the payment was authorized by the shareholders. The witness was then asked if it was paid out of profits of the company, to which he answered in the affirmative.
Senior Counsel McKay then proceeded to question the witness about the audited report of 1999 and the minutes of a board meeting. Brassington was then asked whether he had sought approval from the board for a loan of $300M from Republic Bank.
According to Brassington that loan was to pay dividends. The lawyer cautioned the witness to answer directly instead of giving a lengthy explanation.
Brassington was then reminded that he had said that he had paid the dividends from profits, but is now claiming that it was paid from the loan. The witness was then asked if he was knowledgeable about the Companies Act section 50. Brassington replied in the negative.
He was then asked if he was aware that he was in violation of the Company’s Act, to which he said that was not his understanding. The witness admitted that by October 1999, a buyer for Guyana Stores Limited was identified.
Senior Counsel McKay suggested to the witness that he was stripping the company of its assets before the sale since several items were being sold prior to Yassin taking control.
It was noted that during one of the board meetings, that the loans which were taken would have to be repaid by whoever gained ownership of the company. A letter which was written to Brassington by the Finance Manager at Guyana Stores sought to have several issues clarified.
However Brassington told the court that he did not remember the letter, but would not deny that it was sent to him. He was then asked about the steps he took to meet the requests the finance manager had raised. The witness told the court that he did not recall.
Senior Counsel McKay, then put the question to Brassington that he was making steps to reduce the assets of the company before handing it over. He denied that assertion by the lawyer. He was then asked if it would be true to say that the decisions Brassington made, caused Guyana Stores to suffer loss of profits.
The witness sought to give a long explanation, but was cautioned by the lawyer that he needed to be direct. “Don’t be shy…answer the question,” McKay told Brassington. The matter was later adjourned to September where it is expected that Nazham Ali will go into the witness box.
In an affidavit signed by Mr. Tony Yassin, he admitted that on October 4, 2000, he entered into an agreement with National Industrial and Commercial Investment Limited (Privatisation Unit) to purchase the shares in Guyana Stores Limited which was owned by the Government of Guyana.
Furthermore it was stated that before entering into the agreement with National Industrial and Commercial Investment Limited, Yassin was given various information memoranda on June 5, 1996 and packages in March 1999 in respect of the matters and facts which were peculiarly within the knowledge of the National Industrial and Commercial Investment Limited, Government and Privatisation Unit.
To these, the defendant stated, he had no access method of verifying through its own investigation and inquiry.