Dec 14, 2015 News
…no evidence to justify additional hundreds of millions spent
According to the forensic audit report on the National Industrial and Commercial Investments Limited (NICIL), the company’s directors have apparently failed to properly account for millions worth in assets for Linden Mining Enterprise (LINMINE).
Additionally, Chartered Accountant, Anand Goolsarran found that NICIL directors pumped hundreds of millions of dollars into LINMINE and are unable to properly justify it.
Goolsarran said that NICIL’s total expenditure for the period 2002 to 2014 amounted to $8.6B. Its operating expenses, he said, amounted to $2.144 billion.
Goolsarran said that LINMINE accounted for $1.260 billion or 59 percent of the operating expenses, including salaries of 75 staff members ($983.319 million) and rates and taxes ($122.342 million). In other words, LINMINE accounted for $1.914 billion or 22.3 percent of NICIL’s expenditure for the period 2002 to 2014.
For the Forensic auditor, this was not adding up. Goolsarran in his report said that LINMINE which became a division of NICIL in 2004 could not have incurred so much expense. And NICIL was unable to prove this. Apart from the operations of the McKenzie-Wismar Bridge, Goolsarran said that it remains a mystery as to what activities of LINMINE could have possibly warranted the expenditure of $1.914 billion during the period 2002-2014 or approximately $150 million annually by NICIL.
On this matter NICIL’s Executive Director, Winston Brassington commented that “LINMINE represented a loss on the NICIL side with the expenses relating to securing the many assets that were still being held, pending a sale or lease in a transparent manner. In fact, by virtue of this being a NICIL department, the Treasury was insulated from supporting these operations.”
Brassington further commented that in 2003, the LINMINE Secretariat was set up to: facilitate the privatization of LINMINE; manage the Watooka Complex and the McKenzie-Wismar Bridge; and safeguard the assets that were not part of the privatization.
Addressing the second discrepancy, Goolsarran said that interestingly, in 2003, LINMINE was recorded in the books of NICIL as a subsidiary with a value of $3.5 billion (US$17m) billion. However, in 2004, the value was reduced to zero, and up to the time of reporting LINMIME remained a subsidiary of NICIL.
Goolsarran noted that LINMINE’s latest audited accounts continued to show share capital of $3.5 billion. With this in mind, he strongly contended that a significant discrepancy existed between the accounts of NICIL and those of LINMINE.
In defence, NICIL commented that in 2004 LINMINE was privatized and the assets that were not part of the privatization were vested in NICIL, hence the written-down value of the investment to zero. Notwithstanding NICIL’s explanation, Goolsarran said that the discrepancy still remained.
Speaking to Kaieteur News in an invited comment, Presidential Advisor on Sustainable Development, Dr. Clive Thomas said, “We have a clear case of financial lawlessness once again taking place here. NICIL recorded the assets as being worth $3.5B and the last audited report on LINMINE stated same. Then the following year it was placed at zero value by NICIL. Regardless of Brassington’s excuse, he knows all too well that avoiding proper financial bookkeeping of assets leads to the logical conclusion that you have it poised for your own corrupt uses.”
Thomas added, “In the other case, we see Brassington unable to explain what could have justified the need for hundreds of millions every year in LINMINE. Where was the money going? It seems as though Brassington cannot deal in anything without tainting it with corrupt thoughts and deeds. Rest assured that the State Assets Recovery Unit will be looking into this matter.”
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