The sum of $60 million has been paid to National Industrial and Commercial Investment Limited (NICIL) as part of a settlement between the Government‘s holding company and the Guyana National Industrial Company incorporated, (GNIC) for rent owed dating back to 2006.
Court documents seen by this newspaper revealed that the first payment was made on February 1. The payment is as a result of a court decision made in 2013.
GNIC, a company owned by Laparkan and the Guyana National Industrial Company (employees), purchased the assets of the former Guyana National Engineering Corporation (GNEC) and leased Lots 1-12 Lombard Street as part of the privatization of GNEC.
NICIL (GoG) reduced the rent due from GNIC by 50% in 2000 and the sale price of equipment in 1995 by 30%. Despite these concessions, GNIC failed to honour its obligations to pay under the lease. The matter was forwarded to arbitration in July 2009.
The award of $148,860,870 was made by the Court following the arbitration proceedings between NICIL and GNIC for unpaid rent in 2013. But GNIC had failed to comply with the award.
In court, it was underlined that the respondents (GNIC) failed to comply with the said award and paid no part of the sum it was directed to pay even up to July 2015.
As a result Commercial Court Judge, Rishi Persaud, made an order enforcing the arbitration award. Kaieteur News learnt that the two entities are in a course of settlement.
The first payment of $60 million in the settlement was made last week. The matter is scheduled for another hearing on February 8.
The matter dates back to 1995, a period which saw the privatization of Guyana National Engineering Corporation (GNEC). GNIC purchased the moveable assets of GNEC located at the leased lands of Lots 1-12 Lombard Street.
GNIC operates the largest wharfing and industrial facilities in Guyana. This facility is involved in ship-building, fabrication of parts and smelting.
On the disbanding of GNEC on May 30, 2002 by vesting order #13 of 2002, NICIL whose Chief Executive Officer (CEO) was Winston Brassington, became the successor of the lease agreement of October 30, 1995 and supplemental deed of lease agreement of January 2002. The term of the lease was for 15 years commencing November 1, 1995.
In 2002, NICIL with the consent of the then PPP government via Cabinet, retroactive to 1995, reduced the annual rent to be paid by GNIC from US$1M to $70M and the sale price of equipment by 30 percent. Despite these concessions, GNIC failed to honour its obligations to pay under the lease and the matter was forwarded to arbitration in July 2009.
Additionally, the term of the lease expired on November 1, 2010 and NICIL became entitled to possession of the property.
Documents seen by Kaieteur News earlier this year indicated that GNIC failed and /or refused to deliver up possession of the property to NICIL. As a result, it remains a trespasser.
Four years later, NICIL commenced proceedings for possession and damages for trespass (that is equivalent of rental amounts from 2010 to date.)
More interestingly, while GNIC owes NICIL millions of dollars in rent and is currently a trespasser, it has boldly subleased a portion of the land to TCL Cement Guyana Ltd without NICIL’s consent and continues to collect rental from this sublease. GNIC’s actions are also in direct contradiction of the lease agreement which prohibits this.
Kaieteur News understands that the rental collected from the lease is about six to seven times more than the rental that is supposed to be paid to NICIL.
Government has been alerted to the matter and many questions have surfaced including why NICIL has been so nonchalant over the years in ensuring it collects it due payment from the company.
Officials are also baffled why NICIL was aware of the subleasing and never took any legal action against it, especially when its “trespassing status” is taken into account.
There are also more damning documents which show that NICIL was deliberately dragging its feet on various aspects of this matter.
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