The Guyana Office for Investment (GO-Invest) is on a mission to close every loophole that existed within the entity for abuse or corruption of any form.
In this regard, the company is placing stricter monitoring controls on investment agreements.
This was explained during an exclusive interview with Owen Verwey, the Chief Executive Officer at GO-Invest.
“I can tell you with 100 percent degree of certainty that we are scrutinizing the investment agreements to ensure that Guyana gets value for the concessions recommended by GO-Invest,” Verwey emphasised.
Beyond annual monitoring of investment agreements, Verwey said that GO-Invest now has in place a mechanism called a Self Compliance Monitoring Form. He said that every investor with an investment agreement is now required to submit this form by the end of November of every year.
“So it is incumbent upon the investor now to report to us what they have done. And we have been going out to the investors too. We have actually made recommendations to the Guyana Revenue Authority on more than one investment agreement that we think enforcement action should be taken on,” Verwey asserted.
The mechanisms put in place by GO-Invest in this regard would represent a significant step forward for the company when compared to what took place under the former CEO, Keith Burrowes.
According to its rules and regulations, GO-Invest is mandated to review all investment agreements on an annual basis. This is to ensure that investors who receive concessions use it for the purpose intended.
But instead of carrying out this important function, GO-Invest watched on as investors breached their investment agreements for years. This state of affairs was revealed in a damning forensic audit that was conducted by Nigel Hinds Financial Services.
The group further noted that GO-Invest failed to sanction any investor for breaching their investment agreement, by not properly renewing the agreement. The auditors then gave a breakdown of how certain companies blatantly breached their investment agreements.
It was noted that Baishanlin Forest Development Inc. was incorporated in Guyana in 2006. This was under the Guyana Companies Act. According to its business plan, Baishanlin’s main objective was to ensure the commercial use of Guyana’s forest resources through the processing of a wide range of finished products.
The forensic audit report said that during the period 2007 to 2012, Baishanlin was cutting and exporting raw lumber without processing it or creating value added products. This was a complete contradiction of its investment agreement.
The forensic auditors said that it was evident that Baishanlin’s real objective was to export raw lumber. Nevertheless, Baishanlin still benefited from concessions totaling $1.8 Billion during the period under review 2011-2015.
In another instance, the forensic audit report cited Diamond Tropical Wood Products Inc. which was incorporated in 2011 to establish a wood processing operation at Diamond, East Bank Demerara.
The auditors said that the company was granted concessions in August 2012, but has since failed to honour its part of the investment agreement signed in July 2012, which was to establish and operate a wood processing facility. The concessions granted to Diamond Tropical Wood Products Incorporated were over $60M.
Forensic auditors also found that Vaitarna Holding Private Incorporated was in breach of its investment agreement. They said that according to the agreement, the company committed to setting up a wood processing facility at Wineperu, Potaro Siparuni in Region Eight. As at July 31, last year, the wood processing facility was not engaged in any significant production of wood products.
The forensic audits said that an examination of the files of just those four investors— Baishanlin International Forest Development Inc, Vaitarna Holding Private Inc., Diamond Tropical Wood Products Inc and Zhonghao Shipyards Inc.— revealed that Guyana did not benefit from concessions granted to these investors, since they all breached their Investment Agreements without any sanctions. The concessions for the investors are worth more than $1 billion.
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