Category: Letters to the editor

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Garnishment and Distress Proceedings

Two proposals announced in 2017 Budget Speech – inserting into the Income Tax Act distress proceedings similar to the provision in the Value-Added Tax (VAT) Act, and garnishment of funds in bank accounts for the settlement of tax arrears – have caught the national attention. The discussion has not been helped by the misinformed and misguided statements in the media, even by columnists and persons who have a duty to be better informed.

That failure which is the cause of much of the confusion, misinformation and “noise”, has led to a situation whereby two very different provisions are conflated and wrong premises are used to defend or justify the two proposals. They should be addressed separately. Here is why.

The terms garnishment and distress are of significant legal and constitutional import and depending on circumstances may have different application to action against the person (in personam) and against the thing or property (in rem). As these matters apply to our Constitution they also raise the tension, if not the clash, between, on the one hand, Article 65 which grants to Parliament the power to “make laws for the peace, order and good government” and on the other hand, Article 142 which protects property rights subject to exceptions, as well as Article 8 which makes void any law inconsistent with the Constitution. Continue reading “Garnishment and Distress Proceedings”

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Why was $36.79 per share paid for shares in Barbados Banks DIH when the publicly quoted price is $22.5 per share?

Banks DIH Limited has just disclosed that the 2005 Memorandum of Understanding for a mutual share investment agreement between itself and Banks Holdings Limited of Barbados has now been substantially reversed. Almost every year since 2005, the Chairman and directors of Banks DIH have touted the virtues of the agreement, the synergies from the relationship, and benefits in export sales to both companies.

Keen observers also noted enhanced procurement and governance practices with the presence of nominees of the Barbados company having a place on the Board of Banks DIH.

So it was with some surprise that the public learnt, even before the shareholders did, that in 2015 Banks DIH had sold its shares in the Barbados company. With no reason offered for walking away from the greatest opportunity to expand the export market for Banks DIH products, speculation circulated about the true motive of the Banks management.

At the time, a Brazilian company, through its St Lucian subsidiary SLU Beverages Ltd, and Ansa McAl of Trinidad and Tobago were engaged in a battle to gain control of Banks Holdings Ltd of Barbados. Continue reading “Why was $36.79 per share paid for shares in Barbados Banks DIH when the publicly quoted price is $22.5 per share?”

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Guyana could have successfully defended the action by Rudisa/CIDI

Mr. Anil Nandlall, former Attorney General, has raised on his Facebook page the issue of the Environmental Tax paid by the Surinamese company Rudisa and its Guyana subsidiary Caribbean International Distributors Inc. (Rudisa/CIDI). He suggested that the current Attorney General “either did not study the [CCJ] case or having done so is still unappreciative of its gravamen.” The decision in that case was handed down on May 8, 2014 but the PPP/C Government did not comply with an order of the Court that the Government repay with interest the sum of US$6,047,244.77, and further amounts collected up to the date of the judgment. The matter was resolved only after the APNU+AFC Government gave an undertaking to cease collecting the tax and to repay the full amount collected from Rudisa/CIDI.

Mr. Nandlall was not the AG when the PPP/C introduced the tax in 1995 but it would have been gracious of him to acknowledge that the PPP/C Government erred when it introduced a tax that clearly violated WTO Rules, and compounded its error by continuing to collect the tax from CARICOM companies after the Revised Treaty of Chaguaramas was incorporated in Guyana domestic law in 2006.

The matter has assumed important currency following the commencement of a similar action in the CCJ by the Trinidadian-owned Guyana Beverages Inc. which has paid more than two billion dollars in Environmental Tax. That money, like the Rudisa money, was spent by the past administration, and the current Finance Minister is faced with the serious risk of having to pay back this huge sum. In an ironic twist of fate, proposed legislation to address the problem introduced in 2013 by the PPP/C administration was rejected by the APNU and the AFC MP’s! Continue reading “Guyana could have successfully defended the action by Rudisa/CIDI”

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Straw man fallacy

Please permit me to comment on a letter by Mr Ruel Johnson (SN January 6, 2016: ‘It is good to show we are capable of clemency but first we must show we can deliver justice’).

That letter was partly in response to a letter by me in Stabroek News January 5, 2016 ‘Treatment of Sattaur by persons from the GRA is not acceptable’.

My letter addressing four main points spoke for itself. I believe therefore that Mr. Johnson was engaging in the classic straw man fallacy of creating, in order to refute, a point not made in my letter.

I will not pursue any further correspondence or argumentation on this matter.

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Ram & McRae was never provided with any proof of an $82M deposit to any Republic Bank account holder

Some time ago, Messrs Ronald and Rustum Bulkan, Joint Managing Directors of Precision Woodworking Limited (PWL) called to request a meeting with me. Although we had brought the auditor-client relationship between Ram & McRae (the firm) and the company to an end for professional reasons several years earlier, I agreed to meet with them at our office.

At the meeting, the company’s directors informed me that there was an issue between Republic Bank (Guyana) Limited and PWL as an account holder of the Bank over what they claimed was a deposit of a certain sum of money to the company’s account. They explained that they were seeking my representation in the matter.

I responded that for professional reasons, neither the firm nor I could offer any representation or information to them in the matter. What we did not disclose was that, out of an abundance of caution, we not only reviewed the working papers in our office but a partner of the firm was asked to carry out a further review of the alleged deposit. We found that there was no such deposit.
Continue reading “Ram & McRae was never provided with any proof of an $82M deposit to any Republic Bank account holder”