Latest update March 31st, 2023 12:59 AM
Jul 21, 2009 News
When New Building Society (NBS) held its Annual General Meeting on April 25, last, to approve the accounts for the year 2008, the shareholders had voted to repatriate the more than $715M it had invested in UK Treasury Bills causing the company to lose some $200M.
Chartered Accountant and former Director at NBS, Christopher Ram, had been mandated to prepare the terms of reference on the strategy that would be employed to achieve the goal.
To date this has not been done and it appears that the Board of Directors is now flouting the shareholders mandate.
On May 28, a mere 33 days after the shareholders mandated the company to repatriate the money, NBS wrote to Ram informing him of their position.
The document stated, “with regards to the Society’s Pounds Sterling Investment and repatriating within three months, it was the consensus that we should not tie ourselves up to these timelines, as the society does not have a liquidity problem, and in light of the sensitivity and upward movement of the exchange rate of the pounds sterling, the board would review this matter at a more opportune time.”
Ram subsequently forwarded his Draft Terms of Reference for the adding that, “when I agreed to prepare a TOR I had anticipated a greater level of co-operation from the Society so that the document could reflect the circumstances and needs of the organisation.”
He noted too that, “except for a single meeting I had with you and Mr. Majeed, any co-operation was grudgingly reluctant and I am disappointed that even such common courtesy of taking/returning telephone calls by you and the Chairman in connection with the TOR was not extended to me. Notwithstanding this, I remain committed to the completion of the document and would be pleased to receive your comments or meet with you or other representatives from the society to finalise the document.”
When asked for a comment yesterday, Ram said that the directors were seemingly not serious about the affairs of the company, adding that, “this is the kind of obscenity and arrogance we have to deal with.”
As it relates to claim that the pounds sterling was experiencing an upward movement, Ram said that this was a normal occurrence for any currency in that its value would fluctuate, but added that the investment was not in the best interest of the company as it will continue to lose on that investment.
In April last, Ram along with several other shareholders, led a group called the concerned members of NBS, attended the meeting where they were successful in effecting some change on the agenda of the business of the AGM.
The group also took umbrage at the violation if the Financial Institutions Act as it relates to arguments that the NBS was in violation of the FIA, Ram had requested from the Bank of Guyana the reasons for this and presented the AGM with a commitment from the BOG to regularise NBS.
The document signed by the Bank’s governor, Lawrence Williams, and addressed to the Chairman of the Committee stated, “I wish to advise that the Bank has already taken steps to bring the NBS under its direct supervision.
“The action taken by the Bank has been endorsed by the Authorities and the necessary legislative changes to give effect to a prudent regulatory regime are being drafted. Until such time as the legislative changes are enacted, the Bank will continue to engage the NBS on general issues of safety and soundness through authorised inspections and offsite surveillance.”
It was confirmed by Chairman of the Board of Directors, Dr. Nanda Gopaul that “it is important to note that the Bank has conducted several inspections of NBS upon the authorisation of the Minister of Finance in keeping with the NBS Act. The last such inspection was as on May 31, 2007.
“Following every inspection, the findings have been communicated to the Minister of Finance and the Chairman of the Board of Directors of the NBS.
The findings of the inspections point to a healthy mortgage portfolio and general compliance with the NBS Act, notwithstanding some management issues.”
According to Ram, this imminent move would have serious implications for the purchase of the bonds held by Colonial Life Insurance Company (CLICO) Guyana as it relates to the Berbice Bridge. According to the accountant, it would then be considered a high concentration investment and some of it would probably have to be sold.
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