Winston Brassington, the Executive Secretary of the Government’s Privatisation Unit, sold a $370 million zinc bond belonging to Guyana Stores Limited (GSL) two years after the company was privatised.
This was the testimony given yesterday in the High Court by Mr. Tony Yassin, the Chief Executive of GSL.
Mr. Yassin took the stands for the first time in the long-running case on the privatisation of the company.
Mr. Yassin said that when he took over Guyana Stores Limited, as per the documents he used to sign the deal, he understood that the zinc bond, valued at $65.2 million, along with the land it was sitting on (valued at $65.2 million) was part of the assets he was acquiring.
He said that the bond was cleaned for use, but then one Sunday, two years after the deal was signed, he saw trucks moving out assets of the bond and he later learnt the bond was sold.
Mr. Yassin said when he asked Brassington what was happening, he (Brassington) did not respond.
Yassin is the President and Chief Executive of Royal Investments, the company which signed the privatisation deal on October 4, 2000.
He told the court that he took over ownership of Royal Investments in June 2000. At that time, he said Royal Investments was already the preferred bidder for 70 per cent of the shares in Guyana Stores, with its various departments and associated agencies.
Royal Investments had put in the bid in June 1999 and was accepted on October 22, 1999, Yassin said.
Yassin told the court that when he took over Royal Investments he was aware of the move towards securing 70 per cent shares in Guyana Stores, and that he had met with Mr. Brassington regarding the arrangements for the privatisation of the department store. The initial discussion, he testified, took place on June 19, 2000 and it was at that meeting that he was handed an Information Memorandum and an Information Packet.
These documents, he said, detailed the assets of Guyana Stores that were up for sale as part of the deal, and included a draft copy of the Purchase Agreement.
Mr. Yassin told the court that he relied on that information and he was not told, neither by Brassington nor anyone else, that he should not rely on the information in making a decision to go ahead with the deal.
Mr. Yassin said that on August 4, 2000, he was given a folder with additional documents, and that was the last set of information he received before the deal was signed two months later.
During his testimony, Mr Brassington had spoken of an information room on the business of Guyana Stores, which the investors could have used to carry out due diligence on the company.
Mr. Yassin said that he did not know of the existence of such a room and that Brassington never communicated with him regarding such a room. Brassington had earlier testified that he was not sure if the room was actually in existence when Mr. Yassin took over the company.
Also part of the deal, Mr. Yassin said, were agencies for overseas manufacturers, which had their own assets and staff. He testified that these agencies amounted to 42 per cent of the business that was bought over through the privatisation deal.
Mr. Yassin said that part of the assets bought over was the Diplomatic Shop, or the Duty-Free Shop, according to the information he received before signing the deal.
Senior Counsel Luckhoo, representing Yassin in the case, produced a Memorandum to Mr. Yassin, dated 16thNovember, 2000, from the Prime Minister. It included the stamp of Brassington as the Executive Secretary of the Privatisation Unit. That Memorandum, as read out in court by Yassin, stated that the government was ready to re-establish the Diplomatic Shop and would make arrangements for this to happen, and urged the company to take steps to facilitate the re-opening.
On February 25 last year, Brassington said that the Diplomatic Shop was not part of the transaction in the shares sale agreement.
However, “off hand” he was not able to say if this was particularly stated in the information pack to investors.
Also, on February 25, last year, Brassington told the court that at the time the Privatisation deal was signed, he was aware that some of the agencies under Guyana Stores no longer existed.
However, when asked to say what companies he knew for a certainty did not exist, he could not.
Senior Counsel Edward Luckhoo read out the names of several franchises to see if Brassington would know of their non-existence at the time the agreement was signed. Brassington responded “I don’t know” to at least 17 names called by Luckhoo.
The case is being heard by Justice Roxanne George-Wiltshire. NICIL is being represented by RafiqTurhan Khan, while Yassin is being represented by Senior Counsel Luckhoo and Rex Mc Kay, and attorney SasenarineGunraj.
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 (NICIL) 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 NICIL, the Government and Privatisation Unit.
To these, the defendant stated, he had no access method of verifying through his own investigation and inquiry.
The matter will continue on February 3, next.
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