To date no criminal charges have been brought against a former Guyana Power and Light (GPL) employee, who allegedly collected millions for himself by using the company’s resources to provide private electricity services to businesses.
A special audit of GPL that was commissioned last year by the APNU+AFC government had recommended that the case be looked at again by the new GPL Board of Directors and that police investigate the matter.
“We obtained a GPL investigative report which details widespread abuse of GPL’s resources for private gain by Phalyanjee Nandkumar and other GPL personnel. It appears that these business persons were involved in perpetuating fraud,” the audit, which was conducted by Nigel Hinds Financial Services, states.
“We believe that this report and evidence should be used by the new Board [to] have the police investigate the matter,” it adds.
Both the current and past minister responsible for the energy sector, David Patterson and former prime minister Samuel Hinds, respectively, told Stabroek News that they are both uncertain why no criminal charges were brought against Nandkumar.
For Patterson, the issue predated his appointment although Nandkumar was fired mere weeks after he was appointed. Mean-while, the former prime minister said he was aware of the report but not only was he not directly responsible for that aspect of the investigation, but he demitted office shortly after.
And while the audit report referred to the GPL investigation that uncovered the alleged fraudulent activity, current acting Chief Executive Officer of the company Renford Homer, who has been with the power company for many years, told Stabroek News that he was unable to comment since he had not seen the audit report. “GPL has not been presented, to my knowledge, with the forensic audit so we have not had time to study and analyse it and can so properly comment on what it has or not… we have not had the opportunity to read and review,” Homer said.
“All I know about the audit is what has been published in the newspapers and that would not give me enough to properly speak on the matter… so you see, I don’t know in what context what was said and what omitted or such…it would be unfair for me to comment,” he added.
He explained that the onus was now on the Ministry of Finance, which requested the audit, to give GPL a copy of the audit report so that it would be able to see what shortcomings were identified in order to remedy them.
Embarrassing
But another GPL official told Stabroek News that steps to ensure that the fraud allegedly perpetuated by Nandkumar does not recur have been taken.
The official echoed much of what was referred to in the audit report and informed that the GPL report had found that Nandkumar was operating his own private power provider services using the resources of the utility company.
“He was terminated and I cannot say why he was not charged. What I can tell you is that we have developed a system in place where we believe that this sort of thing can never reoccur. To say it was embarrassing for GPL would be an understatement and I think it is why we need to be vigilant of the company’s affairs, especially in the outlying regions,” the official said.
“Do I believe that he should be charged? I can believe a lot of things but the decisions are not up to me to make. The board will have to look at the total picture and decide on a way forward … that is if filing criminal charges sends a stern enough warning to others and so forth,” the official added.
Fraudulent transactions
According to the audit, after a series of interviews with persons, including many who paid Nandkumar for the provision of electrification services, GPL had found that most transactions were fraudulent.
The audit explained that Nandkumar would take monies from businesses in the Berbice area and use GPL’s resources to set up poles and run lines which fed illegally off of GPL’s system to the persons.
He would also collect finances on behalf of GPL for services offered but the monies never reached the coffers of the power company, the report alleged.
Citing a series of malpractices and making reference to over 50 fraudulent intent cases, the audit made a case for the former GPL manager to be criminally investigated. It said on January 17, 2015, evidence shows that Nandkumar collected a cheque for $16,192,433 from a client on behalf of GPL but the records show $16,000,000 was received by J. Lonke, as a security deposit for the electricity supply at the New Amsterdam Commercial Office on April 15 and not $16,192,433 as stated. “This suggested that money was with Nandkumar for almost four months in advance,” the report notes.
It also cited a case on October 21, 2014, where Nandkumar collected $6,000,000 from a Berbice resident on behalf of GPL as part payment for the testing of a 500kVA transformer. The record at the New Amster-dam Commer-cial Office on March 12, 2015 shows $31,920 was paid for testing of the transformer, according to the report.
It said too that Nandkumar collected some $6 million from the same customer on behalf of GPL as part payment for line hardware, poles and cable but evidence showed that no money was required for the capital works. This was because GPL’s Capital Revenue Allowance absorbed the total amount of the cost.
Another time, and from the same client, he collected $1.2 million to test a transformer, give an inspection certificate and cable network.
There was also evidence that Nandkumar collected $650,000 from a customer to purchase electrical equipment supplied for a transformer and cable although the items are usually provided free to customers.
Audio recordings and other evidence were also collected and verified the process of back billing that was undertaken by Nandkumar. “The conclusion of the investigation of the matter revealed that Mr Nandkumar has breached Guyana Power and Light Inc’s Disciplinary Code of Practice No 23 on several occasions and a charge was issued,” the report said.
It was also noted that there was evidence that Nandkumar collected $100,000 from a customer for payment to a police officer, loss reduction technicians and himself so as not to take a matter further.
Technicians of GPL were paid overtime while performing unlawful works, the audit states and they were also given direct instructions by their manager to conduct illegal electrical works in the name of GPL.
Nandkumar was also identified as the person behind the planting of poles and the supply of high power electricity for a rice mill in Berbice, where he was also listed as the company’s electrical contractor. He is alleged to have carried out the entire project using GPL’s resources.
Using his authority, Nandkumar is also alleged to have instructed that street lamps be installed in many areas along the West Coast Berbice despite knowing that this was illegal.
It is unclear if the street lights were the ones removed by the power company at Bath Settle-ment, also on the West Coast Berbice, which saw protests from residents and the opposition condemning GPL and blaming government for their removal.