CJ quashes GGMC’s $3B loan to Housing Ministry…Says agreement null and void

The Chief Justice (ag.) Ian Chang in a written decision handed down yesterday afternoon, ruled that the decision

Chief Justice (ag) Ian Chang

by the Guyana Geology and Mines Commission (GGMC) to make a loan of three billion dollars from its funds and resources to the Central Housing and Planning Authority (CHPA) was “both irrational and ultra vires.” The action brought by WPA Member of Parliament  Desmond Trotman arose out of a joint statement by the GGMC and the CHPA of a $3B loan agreement. The deal was further exposed by Mr. Ranwell Jordan, a member of the CHPA. Trotman and Jordan filed the court action to challenge the purported approval of a loan of $3B by the GGMC to the CH&PA. The action against the two state controlled entities sought to quash the agreement for the loan which the plaintiffs argued were fictitious and unlawful. GGMC and the CHPA had signed a Loan Agreement following the submission of an “Investment Proposal by the CHPA last January. According to the Statement, the money was to be used for the development of the housing sector. GGMC had touted a five percent interest rate being offered by CH&PA, which according to the GGMC, was 3.2 percent more than what was currently being earned via the commercial banks and other investment options available to the Commission. The parties involved had articulated that in the event that CH&PA fails to repay the entire amount by the deadline, the Commission has the right to increase the interest rate by seven percent. The body said that the agreement was subject to the terms and conditions enshrined in the Loan Agreement and any additional guarantees required by the Commission. However, according to the actions filed last April, the plaintiffs are arguing that should the $3B Loan Agreement between the Guyana Geology and Mines Commission (GGMC) and the Central Housing and Planning Authority (CHPA) materialize, it would represent the crudest form of financial lawlessness. Based on the grounds listed in the action, the Chief Justice, (CJ) had instructed that GGMC and CH&PA must prove to the court why a Writ of Certiorari should not be granted to prevent GGMC from going ahead with its decision to lend the monies to the Housing authority. Chang had also instructed that the Housing Authority should justify why a Writ of Prohibition should not be dispensed to ensure that the mining commission is inhibited from making any further move on the loan on the premise that it is in breach of the law. The judge subsequently made absolute the Orders of Certiorari and Prohibition he granted based on an application by Trotman’s attorneys-at-law Christopher Ram and Brendon Glasford. In his decision yesterday, the Chief Justice ruled that the GGMC agreement is therefore “null and void”. He further noted that while the GGMC has the discretionary powers to make loans, the power does not extend for the purpose of the development of the housing sector. Ram, in a statement on the ruling, noted that the decision by the High Court not only vindicates Trotman and other commentators about the lawlessness involved in this tainted transaction but exposes the entire Cabinet and others in an elaborate scheme to siphon off money from the GGMC to GuySuCo using the CHPA as a front. He further stated that essentially it was conceded by the CHPA that it had no authority to enter directly in any Loan Agreement to borrow any money.