Joe Singh new Chairman/CEO, Sonita Jagan in as CFO
There were serious lapses in the internal financial controls of the Guyana Telephone and Telegraph Company (GT&T), says outgoing Chief Executive Officer, Yog Mahadeo.
Mahadeo’s shocking resignation was accepted on Thursday by the GT&T’s Board of Directors following a damning auditor’s report that found internal accounting systems were bypassed.
Yesterday, the GT&T Board of Directors confirmed reports by this newspaper that it has accepted Mahadeo’s resignation. 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.
Rachpaul and three others from the company’s finance section were given termination letters earlier this week.
An annual audit of the mainly US-owned company took a turn several weeks ago after auditors started probing irregular cheque payments to Martin Goolsarran, Programme Director of the National Communications Network (NCN) for the GT&T Jingle and Song Competition. Goolsarran reportedly placed almost $4M, representing payment to NCN cameramen and crew, in his personal bank account. The cheques were made out in his name. Other payments were blocked.
The revelations had also ensnared NCN’s CEO, Mohamed Sattaur.
Sattaur yesterday reportedly handed in his resignation while Goolsarran has been suspended for eight weeks by the NCN’s Board of Directors.
During a press conference at the Pegasus Hotel yesterday, 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.”
The official, who has been behind a major campaign to make GT&T more marketable, said that he met with the board and the report of the audit was discussed. He was the CFO for three years before being confirmed as the CEO two years ago.
“I had signaled to everyone that if those reports were adverse I will take the necessary actions…”
The official said that the next few weeks will be used to learn what the lapses in the internal control systems were.
Kaieteur News understands that GT&T has a number of systems in place which calls for three quotations before purchases can be made. These were bypassed on a number of occasions.
Saying that he was “hurt” by the lapses in the financial department, Mahadeo refused to take responsibility for his colleagues’ action in allowing these lapses.
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 revenues grew, with the company hooking up 15,000 new mobile subscribers. Some 16,000 new DSL connections were also made.
Mahadeo was not worried about criminal charges.
In addition to Rachpaul, internal auditor, Sachin Persaud; Caramchand Rambarran., Ten/10 Organizer and Richard Sukhdeo were also said to have had their services terminated.
The investigators reportedly took control of the computers in the finance department. They then ordered the four off the job pending the outcome of the investigation.
Conflicts of interests?
GT&T in a statement from Paul Bowersock, a member of the Board of Directors yesterday said that staffers are aware of strict business procedures.
“GT&T periodically, and as needed, reviews internal controls and compliance with our internal code of ethics and conflict of interest rules. Every employee is made aware of our strict business procedures, and we do not tolerate violations.”
In the course of the recent review, Bowersock said that it was 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.”
“Because this failure to adhere to the highest standards of conduct took place on his watch, CEO Yog Mahadeo has determined it is in the best interest of the company for him to resign his position. We respect Yog’s decision and appreciate the many achievements of the company under his leadership. Over the next couple of weeks, Yog has offered to help ensure that a smooth transition takes place.”
GT&T said that it did not envision any further personnel changes at this time.
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.
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