Auditor Charles Sugrim has warned Property Holdings Inc (PHI) against the practice of putting
proceeds from state properties sold by PHI into various accounts.
PHI used to be headed by one of the most controversial public figures—Winston Brassington. During the reign of the People’s Progressive Party Civic (PPP/C) government, Brassington had responsibility for PHI and about 13 other companies.
In a recently released forensic audit report, Sugrim reported about “unsatisfactory” management of PIU’s finances under Brassington. He highlighted a practice of awarding state properties to the second and third highest bidders.
As prominently as he highlighted those issues, Sugrim noted the fact that PHI had a practice of depositing proceeds of final sales into various accounts.
These include the accounts of the National Industrial and Commercial Investment Limited (NICIL) and the Privatization Unit, both of these were also being run by Brassington.
Sugrim reported, “Proceeds of sales were deposited into the Privatization account at the Bank of Guyana, NICIL account at Republic bank, and PHI accounts at Republic bank. All of the proceeds of sale were deposited into these accounts.”
The auditor pointed to instances where this was the case. This happened with the sale of Water Street
property sold to JP Santos and Co Ltd. For this sale, the amount of $215M was deposited into NICIL’s account # 487-748-6. Of this amount $139.7M was due to PHI and $75,250,000 was due to Guyana National Shipping Co.
The money was to be shared between Guyana National Shipping and PHI as the building belonged to PHI while the land belonged to the shipping company.
Sugrim recommended that “all proceeds from sale of properties be deposited only into PHI accounts.”
However, PHI’s management responded saying that while it is “desirable,” to put all proceeds into one account, the practice of depositing sums into various accounts “is not necessarily wrong.”
PHI said that “various reasons can be advanced as to why the Privatisation Unit would hold funds, pending conclusion of a transaction.”
“In earlier years the account monies were deposited was often determined by the availability of a Board of Directors and/or signatories to accounts and since PHI is managed using NICIL resources if a PHI signatory was not available it may have been expedient to deposit into NICIL/PU accounts. However, all funds are audited and accounted for. In some cases, the Privatisation Unit is the agent and is authorized to hold the funds,” said PHI.
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