Oct 20, 2015 News
…says constitutional articles do not apply to company
The National Industrial and Commercial Investments Limited (NICIL) Chief Executive Officer, Winston Brassington, is maintaining that no illegalities or corruption occurred in NICIL, even in light of recent statements by Junior Finance Minister Jaipaul Sharma.
Sharma said that he had found several cases of fraud and corruption within the body.
Minister Sharma confirmed that criminal charges have been recommended against Brassington. Sharma had said that the recommendation had been made following the unearthing of several cases of fraud and corruption during the forensic audit into the company.
However, Brassington has now come out and said that not only is NICIL innocent of any wrongdoing but also that the preliminary report is in contrast to the Minister’s statements and does not allege corruption or fraud by him.
In a statement issued through NICIL, yesterday, Brassington made reference to an article published in this newspaper on Sunday. He deemed it “premature”.
“Kaieteur News article, of Sunday 18th October 2015 titled ‘Forensic audit recommends criminal charges against Brassington – Minister Sharma’ is premature when the basis of this assertion is from the unreleased preliminary audit report of Mr. [Anand] Goolsarran, the appointed forensic auditor of NICIL,” Brassington said.
He said that NICIL received the draft preliminary report on September 30. The preliminary report, he added, covered 13 years of NICIL’s business and is currently being responded to by the company. He said that Goolsarran is awaiting NICIL’s response before the auditor’s draft is finalized. From there, he said, the formal draft will be submitted to the Guyana Government and NICIL’s response to the final version will also accompany the final report.
“The facts contained in the report will ultimately show that there has been and is no evidence of illegality, fraud, or corruption by NICIL. Further, the preliminary report does not allege any personal enrichment of any of the officers or Directors of NICIL, including the CEO, Winston Brassington,” the release stressed.
“NICIL maintains that all actions taken by NICIL over the years on matters identified in the preliminary report were on the lawful authority of its Boards (Privatization Board or NICIL Board) and/or Cabinet.”
However, it was noted that a recommendation had come from Goolsarran in the report, “In respect of alleged wrongdoings” though the recommendation was certainly not as drastic as those stated by Minister Sharma.
Rather, Brassington said, the auditor would have suggested disciplinary action for violations of Articles 216 and 217 of the Constitution. The violations were provided for under three sections of the FMA Act: (a) Section 48—Misuse of Public moneys; (b) Section 49-Liability for Loss of Public moneys; and (c) Section 85—Liability of Official.” The disciplinary action extended to the NICIL’s Board of Directors, the former Minister of Finance, Ashni Singh, and the previous Cabinet.
According to Article 216, “All revenues or other moneys raised or received by Guyana (not being revenues or other moneys that are payable, by or under an Act of Parliament, into some other fund established for any specific purpose or that may, by or under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and form one Consolidated Fund.”
Brassington said, “Mr. Goolsarran’s main contention has been and continues to be that NICIL is subject to Articles 216 and 217 of the Constitution and therefore by extension the Financial Management and Accountability Act (FMAA). NICIL has and continues to refute the applicability of or violation of Articles 216 and 217 by NICIL.”
The CEO stressed that NICIL received substantial legal advice which indicated that Articles 216 and 217 are not applicable to NICIL. Further, he said, the application of Articles 216 and 217, would cause NICIL to be in violation of the Companies Act and NICIL’s own Articles of Incorporation and Bylaws.
“NICIL operates like any other state-owned entity, incorporated under the Companies Act. If it operates in violation of Article 216 and 217 of the Constitution, then all state-owned entities would be similarly guilty. Further, this would defeat the very purpose of having Government conduct commercial business via companies.”
He continued, “NICIL does not fall within the definition of ‘Guyana’ as set out in Article 232(1) of the Constitution and section 5 of the Interpretation and General Clauses Act, Cap. 2:01. As a consequence, Article 216 of the Constitution is not applicable to NICIL.”
Furthermore, Brassington said that NICIL transferred money into the Consolidated Fund; $3.415B from 1991 to 2001 and $12B from 2002 to 2012. It was stressed that at no time did NICIL receive advice that it had to deposit all of its revenue into the Consolidated Fund.
“Notwithstanding these facts recognized in the preliminary report, Mr. Goolsarran states that NICIL violated Articles 216 and 217 of the Constitution when it retained all funds and invested these funds. This argument, which contradicts the facts as stated by Mr. Goolsarran, is the basis of the above recommendation by Mr. Goolsarran.”
He continued, “Mr. Goolsarran also recognizes that the accounts of NICIL, prior to 2002, were ‘qualified’ audit opinions but for every year since, NICIL has received ‘unqualified’ or ‘clean bill of health’ audit opinions…NICIL’s ‘clean’ audit opinions for 2002 to 2013 is one form of evidence that the current Auditor General, who audits all of Government, does not consider NICIL to be in violation of Articles 216 and 217.”
Brassington stressed that news of any recommendation is detrimental to the audit process.
“It is unfortunate that the protocol for addressing the forensic audit is not being followed, and sensational public statements are being made without balance, much to the detriment of a fair and balanced audit and audit process. Incendiary accusations without specificity as to wrongdoings lack any semblance of objectivity and is [are] one form of prejudicing a fair and balanced audit process,” Brassington said.
“Such actions are more akin to a ‘witch hunt’ than to a fair, independent, impartial, professional and objective audit process.”
According to Minister Sharma, the finishing touches are still being done to the report. The report is set to look into several investments by NICIL, including investments into the Marriott Hotel, the Berbice River Bridge Company and the Pradoville Two Housing Scheme.
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