Cabinet to decide way forward on outstanding US$5M for GTT shares

Jul 27, 2017 News, http://www.kaieteurnewsonline....us5m-for-gtt-shares/

By Kiana Wilburg

Cabinet is expected to make a decision, sooner rather than later, on the way forward regarding the outstanding US$5M owed on the sale of the GTT shares to Hong Kong Golden Telecom Company (HKGT).

This is according to Head of National Industrial and Commercial Investments Limited (NICIL), Horace James.

Speaking to Kaieteur News yesterday afternoon, James said that Government will decide whether it will accept a reduced sum, as being proposed by the company, or take its chances in court.

The NICIL Head said, “They offered us US$2M and that was rejected. They said they would have paid that immediately, or US$2.5M, but over a long period, and that too was totally unacceptable. Then we had to look now and see how each step would play out for us.”

James said that in taking the matter to the court, one would have to consider how much it is going to cost the state to pay for witnesses to be in London where the case would be tried, as well as how much it would cost regarding the legal fees.

The NICIL Head asserted, “So this matter is still at Cabinet. They have not decided if we are going to take the money on the table or start doling out funds to go behind the outstanding US$5M. I can tell you that the expenses for looking after the accommodation for witnesses and the legal fees will run you up to US$1.6M. Significantly, the company is well aware of how much it would cost us, because it was indicated to us during the negotiations.”

He added, “But NICIL wants all of the money. Our thing, is we want to see if we can get more than US$2M, because it was at zero, then US$1M and then US$2M and our board is saying, ‘look, go and see if you can get something more’… For the time being, it doesn’t look all that good. But we are trying to correct something that should not have happened in the first place.”

It was last year that NICIL announced that Guyana would be pursuing the route of arbitration in the United Kingdom, in hopes of recovering the outstanding US$5M from the sale of Government’s shares in GTT.

It was James who had said, “We are in the process of executing all the relief measures that are in the sales agreement in order for us to get it back. We have engaged our lawyers in the USA, and we are using the lawyer who was involved in the sales agreement process and who helped us to draft the agreement.”

“They recommended a company in the United Kingdom to help us in the arbitration whenever that time comes, and when we are going there.”

The NICIL officer added, “It is important that we use a UK company, because the arbitration will be held in London.”

James had said that NICIL is not only going after the recovery of the US$5M, but also interest costs, legal fees, the signatory for the agreement and even the person who guaranteed it.

“So that process has started, and our lawyers have presented all the issues concerning the shares and said that it is a very good chance that we could get back the money.”

INITIAL ARRANGEMENT
It was in 2012 that NICIL sold the Government’s investment in GTT for US$30M of which the sum of US$25M was received. The balance, US$5M, was to be paid within two years.

But there have been conflicting stories since that initial arrangement.

At one point, the nation was told that Guyana’s former Ambassador to China, David Dabydeen, facilitated a debt write-off to HKGT.

HKGT is a subsidiary of Datang Telecom International Technology (Hong Kong) Company Limited.

Kaieteur News understands that the purchase agreement between the Chinese company and Guyana was framed in such a manner that in the event of any legal issue, Guyana or HKGT would have to petition the United Kingdom courts.

NICIL had said that in an attempt to avoid costly and lengthy adjudication of the matter in the English Courts, it called on the government to encourage HKGT, through diplomatic channels, to honour its contractual obligations.

NICIL said that HKGT alleged that following a series of communications with the former Guyana Ambassador to China, HKGT was assured that it was not required to pay the balance of US$5M. This was because HKGT had not been granted the same minority protection rights enjoyed by NICIL—that is, two representatives, instead of one, on the GT&T Board of Directors.

HKGT alleged that it was initially promised two seats by the then Government of Guyana.

NICIL said that HKGT also alleged that the decision to waive the US$5M was contained in a side agreement.

NICIL noted that it has not been able to verify HKGT’s claim of waiver and has requested the assistance of the Government of Guyana to verify the validity of HKGT’s assertion and the documents they produced to support same.