Jul 07, 2016 News
In 1999, under the watch of former President Bharrat Jagdeo, a large swatch of property, known as the Sanata complex, complete with buildings and machinery at Industrial Site, Ruimveldt, and worth hundreds of millions of dollars, was privatized by Government with control given to Queens Atlantic Investments Inc (QAII).
At the same time, some 60 percent of the interest owned in the state-owned New GPC Inc., makers of Limacol, was also transferred to the company.
For that Sanata property and the stakes in New GPC, the investor, QAII, paid a paltry $500M or (US$2.5M).
Less than two years later, in September 2001, the National Industrial and Commercial Investments Limited (NICIL) transferred another 30 percent of New GPC Inc. shares to QAII for $200M.
NICIL, which controls Government properties and handles investments, retained just 10 percent of the New GPC shares.
The details of the transactions had angered Guyanese over the last decade after it became known that Jagdeo, during his terms in office, turned around and granted New GPC billions of dollars in contracts for the supply of pharmaceuticals to the country’s hospitals and the Ministry of Health.
New GPC, from records, was handpicked using what is known in procurement as ‘sole sourcing’.
Shockingly, according to new information yesterday, New GPC, controlled by Dr. Ranjisinghi ‘Bobby’ Ramroop, paid little dividends to the Government of Guyana for those 10 percent shares. This was despite billions of dollars it received for those drug contracts.
Ramroop is a close friend of Jagdeo.
NICIL, in bombshell revelations yesterday, said that since privatization in 1999–a 17-year period–it only received $6.9M in dividends for its 10% minority shareholding in New GPC Inc.
NICIL’s Chairman, Maurice Odle, in a statement, said that the entity has “requested” New GPC Inc. to remit dividends receivable of $3.8M declared for 2013 and 2014.
“NICIL is yet to receive New GPC Inc.’s audited financial statements for the year 2015,” the statement said.
From NICIL’s records, New GPC strangely declared similar dividends between 2011and 2014- $1.9M for each year. It is still to submit audited financial statements for last year to NICIL.
The revelations from NICIL about how little Guyana is benefitting from GPC would raise shocking questions about the attitude of the previous Government when it came to monitoring its collection of revenues.
While ordinary workers were taxed a huge chunk of their salary, hundreds of millions of dollars are being allowed to slip out of the back door from companies like New GPC. And it is not like New GPC and its subsidiaries were broke.
They have been acquiring numerous properties and other interests throughout the country.
They have brought up stakes in Caribbean Premier League (CPL), a regional T20 cricket franchise with even its own cricket team- the Amazon Warriors. Though it has scaled back somewhat since the PPP/C lost the general elections last year, it will not be forgotten that a few years ago, New GPC made a bid to purchase the Bourda Cricket Ground for US$30M. That deal fell through after it became public.
The company has invested in the Berbice River Bridge and has been receiving returns. It has spread its branches into the media business with a newspaper and even a radio station.
Ramroop has also reportedly invested in a pharmaceutical factory in India.
The pharmaceutical supply business has been a big one for New GPC in recent years,
In 2014, the country’s shopping budget for pharmaceuticals and medical supplies was around $5B (US$25M).
In recent years, New GPC has reportedly benefitted from almost 80 per cent of the country’s
In 2013, Guyana spent $4.69B. The pharmaceutical bills would have represented half of the total Ministry of Health budget of $10B.
The former Opposition, now forming the Coalition Government, using its Parliamentary powers, had been questioning the manner in which the drug inventory was being managed and the prices being paid.
There were also heavy criticisms over the process used in selecting New GPC as a pre-qualified supplier which allowed the company to be among the first in line for the supply of drugs in case of emergencies.
Between late 2007 and December 2012, New GPC was paid more than $90M to even store drugs for Government.
In early 2010, the Cabinet under the Jagdeo administration decided that New GPC would be the sole supplier of drugs.
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