Poor management systems, unsavoury practices and failure to perform annual reviews of Investment Agreements are just a few of the reasons that contributed to the Guyana Office for Investment (GO-Invest) leaving itself wide open for internal as well as external forms of abuse.
In fact, forensic auditors of Nigel Hinds Financial Services discovered that in several instances, some businessmen used GO-Invest to obtain incentives and tax breaks on certain products, only to keep them for their personal use.
This worrying dilemma was documented in the forensic auditors’ report on GO-Invest.
In their report, the auditors said that the entity is a conduit for corporations and other businesses to obtain tax concessions.
“However, there is evidence that despite the fact that concessions were granted to many investors, little or no business activity related to the Investment Agreement took place,” expressed the auditors.
They added, “In some instances, GO-Invest was used by businessmen as an opportunity to obtain products without paying import duty and other taxes, then reselling the goods or keeping them for personal use.”
Also contributing to the abuse, GO-Invest opened itself to the fact that its system for filing was in an inexcusable state.
In this regard, the auditors said that the unsatisfactory state of the filing system at GO-Invest contributed greatly to the inability of management to provide timely and accurate information regarding the operations of GO-Invest. In many instances, the auditors said that documents placed in an investor’s file were not bound, resulting in missing documents.
The auditors said that in some instances, files examined were not properly indexed, so there is no way of knowing what should actually be in the file. It was noted that the movement of files were not always documented, thus making it difficult to locate files in a timely manner. At the time of its report, the auditors said that files for Zhonghao Shipyards Inc. and Atlantic Network Inc., could not be found by officers of GO-Invest.
The forensic auditors also criticized the lax manner in which GO-Invest treated investment agreements for some businessmen.
The auditors said that in many instances, files examined had un-dated draft Investment Agreements, which undermined the integrity of the documentation process for a key area of GO-Invest responsibilities. The forensic auditors said that this opened the verification and review process to opportunities for forgery and undermined the use of an audit trail.
The auditors said that there was no indication that Go-Invest complied with Section 41 of the 2004 Investment Act which requires annual recommendation to the government for alteration to the regime of fiscal incentives as detailed in Section 2 of the Income Tax in Aid of Industry Act of 1994.
Additionally, the auditors said that the Investment Act of 2004 made the Guyana Office for Investment, the primary investment agency in Guyana. The auditors said that it is unfortunate however that GO-Invest does not have a comprehensive database of investments made in Guyana.
In this regard, they made reference to the fact that Kaieteur News carried an article where the former CEO of GO-Invest Keith Burrowes admitted that “Go-Invest can only account for 10% of the investments made in the country”.
Also, the auditors said that the management of GO-Invest acknowledged that some investment agreements falling within their range of investments for consideration were done directly by the Office of the President.
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