Jan 06, 2017 News
The National Industrial and Commercial Investments Limited (NICIL) is on a mission to recover millions of dollars owed to it by various government agencies and other subsidiaries.
This was revealed at NICIL’s first end-of-year press conference held on December 30, last.
There, Officer in Charge of NICIL, Horace James told the media, “We have quite a few (companies) in court”. He indicated that the struggling Guyana Sugar Corporation (GuySuCo) owes NICIL just about $61M for the rental of 199 Camp Street property.
James said that the Central Housing and Planning Authority (CH&PA) owes NICIL $74M for works done at Sparendaam. This is for upgrades at Pradoville. These were paid for by NICIL. But, the entity was supposed to be reimbursed by CH&PA.
He informed the media that the Ministry of Public Infrastructure also owes NICIL $174M. NICIL had paid for works done on Battery Road leading up to Marriott.
James said, “There are other agencies that owe us and they amount to about 30; which are just normal transactions.”
The Officer in Charge of NICIL did not mention anything about LINMINE’s outstanding payment to NICIL as noted in the forensic audit report on NICIL which was prepared by Chartered Accountant, Anand Goolsarran.
James, who is in charge of LINMINE, was subsequently contacted about this. He said, however, that he was made to understand some time ago that this was an error in Goolsarran’s report.
When this was relayed to Goolsarran, the forensic auditor said that he maintains that the money is still outstanding.
The former Auditor General said that LIMNINE is a separate legal entity and a 100% subsidiary of NICIL. Therefore, Goolsarran said, in principle, all expenditures incurred by NICIL on behalf of LINMINE should be recovered.
Goolsarran said that during the period 2002-2014, total operating expenditure of NICIL was $2.144 billion of which LINMINE accounted for $1.260 billion or 59%. He said that apart from the operations of the Mackenzie-Wismar Bridge, it is unclear what the activities of LINMINE were to justify the above expenditure and why such expenditure was not recovered.
He said that NICIL commented that “Linmine represented a loss on the NICIL side with the expenses related 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”.
NICIL further commented that in 2003 the LINMINE Secretariat was set up to: (a) facilitate the privatization of LINMINE; (b) manage the Watooka Complex and the Mackenzie-Wismar Bridge; and (c) safeguard the assets that were not part of the part of the privatization.
Goolsarran said that in 2003, LINMINE was recorded in the books of NICIL as a subsidiary with a value of $3.483 billion.
He said that in 2004, the value was reduced to zero, and up to the time of reporting LINMINE remained a subsidiary of NICIL.
“In 2002 and 2003, the Auditor General had disclaimed his opinion of LINMINE’s financial statements because of uncertainties of a fundamental nature, mainly relating to fixed assets, inventories, accumulated losses and lack of evidence that the entity had the ability to operate for the foreseeable as a going concern,” the Chartered Accountant noted.
He said that LINMINE’s latest audited accounts continued to show share capital of $3.483 billion.
“Therefore, a significant discrepancy existed between the accounts of NICIL and those of LINMINE. 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, the discrepancy still remained.”
Apart from the above, Goolsarran said that the financial statements of NICIL for the year ended December 31, 2014 showed that the LINMINE Secretariat is indebted to NICIL in the sum of $58.288 million.
Goolsarran said that there is also a related party transaction involving LINMINE which showed an amount of $2.059 million owing to NICIL.
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