Sacked GT&T’s CFO breaks silence … Yog Mahadeo stopped $3M questionable payment
… after NCN official submitted invoices in his name
Almost $4M was paid over to Martin Goolsarran by the Guyana Telephone and Telegraph Company (GT&T) based on invoices he submitted in his name.
A third invoice submitted between January and February was blocked by GT&T’s Chief Executive Officer, Yog Mahadeo, after the matter was brought to his attention.
These were among some of the details that are now being released that sparked a scandal that, after the dust would have settled, two top executives from two companies would be left without jobs.
Goolsarran is the Programme Manager of the state-owned National Communications Network (NCN). He was suspended for eight weeks, starting last week, for depositing the money into his personal bank account. Chief Executive Officer Mohamed Sattaur has resigned and President Donald Ramotar accepted the resignation.
On Thursday, Mahadeo resigned after an internal audit by GT&T’s US-based headquarters found that internal controls were breached under his watch. Mahadeo had publicly stated that should the audit find anything adverse, he would step down from the position he has held for two years now. He was the company’s Chief Financial Officer for three years prior to that.
On Friday, GT&T’s sacked CFO, Royston Rachpaul and three of his colleagues were served with termination letters relating to breaches found during the audit. The three were internal auditor, Sachin Persaud; Caramchand Rambarran., Ten/10 Organizer and Richard Sukhdeo.
Speaking with Kaieteur News yesterday, Rachpaul admitted that his letter of termination spelt out the breaches as the reason he was fired.
“… some internal control breaches were found. Obviously I was pretty much the person put in charge and on that basis, I was terminated.”
The internal audit team from Atlantic Tele Network (ATN), parent company of GT&T, was due in Guyana several weeks ago to conduct routine annual checks on the telephone company.
However, reports that an investigation had been started at the NCN to investigate suspicious payments by GT&T for the TV production of the Jingle and Song Competition, prompted the auditors to start looking at a number of specific issues.
Shortly after arriving, Rachpaul and the three officials from the Finance Department of GT&T were sent on leave and not allowed on the GT&T premises. Laptops and other records were seized.
According to Rachpaul, one of the major issues that auditors were looking at was the purchase of stocks, including t-shirts. Before purchases can be made, GT&T is required to ensure three quotations from suppliers are in. On occasions these were not adhered to.
Rachpaul could not recall instances where GT&T’s local internal auditors would have reported to him on breaches of the controls.
Regarding the payment to Goolsarran, the former GT&T official disclosed that he was presented with supporting documents to release monies, over $3.9M, to Goolsarran. The reasons advanced were that NCN’s cameramen and crew hired to record the Jingle and Song Competition had to be paid and delays would have jeopardized the event.
According to Rachpaul, GT&T had invested almost $100M in the competition and it was unthinkable to delay payment.
However, GT&T’s CEO and Rachpaul turned down a request to release the remaining $3M since the same reasons were again being advanced.
By this time, in February or so, filming was already completed so the GT&T officials refused to release more monies to Goolsarran, Rachpaul said.
During the first payments in December, Mahadeo was unaware that cheques were made over to Goolsarran.
Rachpaul denied that there was any major fraud at GT&T to the tune of $1B as is being reported in some media.
“There are no financial irregularities at the company.”
Another report that Rachpaul owns a parts shop at Vreed-en-Hoop, West Demerara, was also refuted.
“Absolutely not true. The last two years, under Yog Mahadeo’s watch, GT&T has improved in leaps and bounds. There was a five per cent increase in revenues in 2011 year on year.”
Rachpaul does not envisage any criminal charges as he was “not involved in anything criminal. “I don’t expect any.”
On Friday, GT&T said that it had accepted Mahadeo’s resignation… a resignation that had come as a shock.
Former CEO, Major General (rtd) Joe Singh has now been named Chairman of GT&T and will assume the role of acting CEO.
Former CEO, Sonita Jagan, will now be acting as the new Chief Financial Officer in place of Royston Rachpaul.
During a press conference at the Pegasus Hotel, Friday, Mahadeo disclosed that he will remain for a few weeks to hand over. He refused to link Sattaur’s resignation to his.
“The board has basically informed me that there were lapses in internal controls. I have not been updated what these controls were.”
Payments to several promoters, suppliers and marketing agencies have been blocked by GT&T in recent weeks to facilitate the audit. Several persons doing business with GT&T have also been questioned.
In the past 18 months, GT&T has spent up to $1B on popular promotions including the Jingle and Song Competition, Ten/10 Softball, Gospel Concert, Colorfest and Feel The Beat, among others.
According to the outgoing CEO, in 2011 revenue grew, with the company hooking up 15,000 new mobile subscribers. Some 16,000 new DSL connections were also made.
GT&T, in a statement from Paul Bowersock, a member of the Board of Directors on Friday said that the audit found that the actions of some individuals have been inconsistent with the company’s high ethical standards regarding internal business practices and conflicts of interest.
“Accordingly, the Board has decided it is in the best interest of the company to make some changes in personnel. The board has replaced our CFO, Royston Rachpaul, and three additional staff reporting to him.”
Guyana had 20 per cent shares in GT&T, shares that it has now sold to an Asian company.
The rest is owned by Atlantic Tele Network, a US-based company.