Liquidator for Globe Trust and Investment Company Limited (GTICL), Nizam Ali, says that the future of stakeholders at that company appears gloomy.
Ali has since moved to the courts in an attempt to recover some of the money loaned without adequate security, but the judicial system has been described as “ridiculously slow.”
The liquidator has managed to recover some $40M from debtors ever since the process of liquidation began. According to Ali, depositors’ investment in GTICL amounts to $800M. However, the book value of the loans is $70M, which means that a significant amount of the company’s assets are impaired and likely unrecoverable.
Of the 5,000 depositors, some 3,000 have deposited $100,000 or less. This would mean that if there is a commitment to pay some of the depositors, it is unlikely that anyone would receive more than $100,000.
Last October, Nizam Ali and Sons, the same company that has been contracted to prepare a report on the CLICO (Guyana) accounts, was appointed Liquidator by Chief Justice Ian Chang (ag).
The Chief Justice issued an order for the compulsory liquidation of Globe Trust following a High Court application by the Bank of Guyana (BOG).
The company came crashing down after issuing many unsecured loans and conducting other dubious practices.
The BOG filed an application asking that an order be granted for the compulsory liquidation of GTICL as provided for under the Financial Institutions Act after an investment deal for the troubled institution failed to materialise.
It was the second such application—the first was filed in 2002 when numerous depositors had attempted to intervene in the case.
Globe Trust began operating in April 1991 and was licensed in 1999 to conduct depository financial business with authority to engage in Trust business. However, in 2000 and again in 2001 a series of inspections by the BOG found the institution to be in breach of the Financial Institutions Act, and the BOG, with the intention to liquidate, seized the institution in September 2001.
Several attempts thereafter to attract an investor failed.
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