Apr 29, 2015 News
– They have no clue what to do- Ram
The incumbent People’s Progressive Party/Civic (PPP/C) released its Manifesto on Saturday last with
no action plan on how it is going to return the National Insurance Scheme (NIS) to financial stability if re-elected to govern Guyana.
NIS remains in deep trouble following its investment in two companies that proved to be financially disastrous.
NIS invested an accumulated $6.5B in the Colonial Life Insurance Company (CLICO) and the Berbice Bridge Company Inc (BBCI); $5.5B in CLICO and the remainder in BBCI.
Experts have said that the absence of proper management on government’s part is what landed NIS in its current financial dilemma.
But the same Party that has been in government while NIS made these two bad investments has failed to outline a turnaround plan.
The negative effects of Guyana’s handling of the collapse of the Colonial Life Insurance Company (CLICO) and its subsequent impact on the NIS are continuing to be felt some six years later.
With CLICO Bahamas in winding-up proceedings, it is still unclear whether Guyana will ever get back that money. Government has remained largely silent on this investment with criticism still lingering over the manner in which the money was invested in the first place.
When asked on Monday, why nothing is in its Manifesto with regards to how government will revive NIS, PPP/C General Secretary, Clement Rohee gave all assurance that “something has to be in there
(the manifesto) about NIS, I am sure.”
However, checks and double checks proved otherwise.
In an invited comment yesterday, Attorney- at- Law and Chartered Accountant, Christopher Ram told Kaieteur News that he is not surprised that PPP failed to make such provisions in the manifesto.
He said that he is convinced that the incumbent has “no clue” what to do. “NIS was already in a bad situation after CLICO then they (government) went and made it worse with the investment in the Berbice Bridge.”
Ram said that it seems as if the government just prefers to ignore the dilemma of the Scheme “but they will not be allowed to ignore it, they will not be allowed to do so at all.”
Expressing fear of “irreparable financial damage,” to NIS, Ram on behalf of three pensioners, last week, wrote to Chairman of the NIS Board Dr. Roger Luncheon requesting information on almost $1B in preference shares in the Berbice Bridge Company Inc (BBCI) for which the scheme is receiving no dividends.
Ram said that he was seeking relevant information for the purposes of pursuing legal action to secure the Scheme’s interest and the interest of his clients, who are pensioners.
NIS acquired preference shares in BBCI at face value of $950M since 2013 but never received any dividends because the company claimed that it made no profits. NIS had bought those shares from NICIL.
Ram said that his clients are concerned about the decision to make investments since Dr. Luncheon would have been aware that NICIL, the previous owner of the shares had to forgo the dividends. His clients are also concerned that no independent valuation was done before a decision was taken on acquisition of the shares.
Also, Ram’s clients are concerned that as Chairman of NIS board, Dr. Luncheon appears to have been in a position of conflict of interest since he is also the Director of NICIL, the seller of the shares.
Ram wants to know the date of acquisition, the price paid for the shares and whether it is cum dividends or dividends.
He also wants a copy of the valuation report based upon which the decision was made to buy shares and evidence that the directors, in making the decision, took account of the potential or actual loss of approximately $5.5B which the scheme incurred but is still on its books in relation to the investment in CLICO.
The lawyer is also seeking extracts of the minutes from both the NIS and NICIL confirming that Dr. Luncheon excluded himself from participation in the relevant meetings of the two companies on the issue.
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