Category: Letters to the editor

Dear Editor,

Your editorial of yesterday’s date describes as A Travesty the decision by the Commission of Enquiry into the Mahdia School disaster not to call any more witnesses. It laments that the responsible Minister, the Hon. Priya Manickchand would not be called to give evidence before the Commission of Inquiry into the deaths of around twenty Amerindian children who died in the custody and care of the State.

Perhaps the editorial should have been headlined Great Escapes 3, following the headline of the previous day in which the Great Escape of Mr. Bobby Gossai Jnr. of the Ministry of Natural Resources is related. Mr. Gossai suffered the draconian penalty of loss of two weeks’ pay for improperly engaging in and clearing of more than four billion dollars of expenditure flagged by independent auditors, completely outside of his authority. The Government dug deep and found a sanction applicable to persons employed under the Public Service Rules, ignoring the fact that Mr. Gossai is employed as a contractor outside of those rules. Of course, Mr. Vickram Bharrat, the real person responsible and accountable for the saga, was appointed as the investigator.

Great Escape 2 should have been dedicated to Mr. Nigel Dharamlall, former Minister of Local Government who was alleged to have been involved in a horrendous sexual matter, also involving a female Amerindian youth. It would be very unsurprising if Mr. Dharamlall later returns as a beneficiary of the public purse.

The pubic is overburdened by the daily revelations of governance infractions by the State but when we can no longer rely on the courage and independence of highly respected persons like Major General (Ret’d) Joe Singh, Attorney-at-Law Joycelin Kim Kyte-Thomas and Mr. Derrick Rowan John, Chair and members, respectively of the Mahdia Commission, then the state of the country is worse than it appears.

As we exempt the political class from accountability, then as night follows day, the whole concept of the rule of law and democracy is eroded.

Christopher Ram

Dear Editor,

By a 2018 amendment to the Anti-Money Laundering…. Act, the Companies Act was amended to require companies to file with the Commercial Registry “relevant information of beneficial ownership on a regular basis or on demand from the Registrar.” Failure to do so carries an astounding “fine of not less than 10 million nor more than $40 million and to imprisonment for a term not exceeding three years.”

The amendment makes it clear that beneficial ownership means ownership by an individual of voting rights represented by 25% of the share capital of the company. Yet, the Commercial Registry is asking for particulars of beneficial ownership which is stated as a company and particulars of shareholders who own below 25%, clearly in violation of the law.

I have made representation to various interested parties and to the Commercial Registry. Instead of correcting its error, the Commercial Registry is doubling down, requiring not only the information on shareholders below 25%, but is now requesting a copy of the Directors Resolution. Apparently, the Commercial Registry does not appreciate that a resolution is an internal document while documents filed with the Commercial Registry are public documents. With a little bit of experience, the public officials would know that the preparation of beneficial ownership information is an administrative function carried out, even at the highest level in any company, at that of the company secretary.

Unfortunately, this is not the only irrational and unlawful request by the Commercial Registry. A couple days ago, they refused to accept a foreign passport as an ID because the person who migrated to Guyana years ago, “does not have a foreign residential address”. Then we hear that it is the FIU or some official from the AG’s Chambers.

The recently passed Guyana Compliance Commission Act gives the Commercial Registry even more powers and functions. Unless there is a drastic change in how such powers and functions are exercised, individuals and entities will find it increasingly difficult and more costly to do business in Guyana.

Christopher Ram

Dear Sir,

Your very useful article on the findings reported in the interim report of the Caribbean Financial Action Task Force (SN 18/09/23) indicates that accountants and lawyers do not fully understand their AMLCFT obligations. While that is indeed so, I do not believe that it would be fair to attribute to the members of those professions all the blame for that situation.

One of the contributory factors is that despite the provision several years ago in Schedule 4 to the Anti-Money Laundering Act for the Minister of Finance to designate a Supervisory Authority for both accountants and lawyers, it is barely a month since a Compliance Commission was created and designated as that supervisory authority. And as of today’s date, that Commission is yet to be appointed.

While I do not speak for either profession, I have been involved in training and sensitisation programmes with both accountants, more than five years ago, and attorneys as recent as last Saturday. I believe I am right in saying that members of both professions understand the importance of their compliance for their professional standing and for the country. But they do have a right the question legislation which seeks to upend principles sacred to their profession, the society at large and the Constitution.

For fear of being named by the international Financial Action Task Force as a non-compliant anti-money laundering country, Guyana at times has shown an almost obsequious willingness to comply with all anti money laundering recommendations and principles on a one-size-fits-all basis. To the Government I would say that Anti-money laundering involves more than the Financial Intelligence Unit, the Police, various designated activities such as banking, securities and the financial institutions and supervisory authorities.

It should involve, among others, the Integrity Commission and the Guyana Elections Commission which have been derelict in their statutory obligations. It is an absolute disgrace that the Chair of GECOM would make the lame excuse that GECOM “never operationalised” the provision of the legislation regarding expenditure by political parties. Just thinking of the unaccounted, untransparent and unlawful transactions involving hundreds of millions both before and after the 2020 elections is frightening. And GECOM does not care.

And the FIU itself, the premier anti-money laundering state entity in Guyana, needs more resources to carry out its functions and obligations. Despite the plethora of AML legislation passed over the past five years, Parliament has not provided that body with commensurate resources. Bodies such as the Gold Board, the Forestry Commission and the GGMC would need to set up AML Units if they can properly carry out the functions of a supervisory authority. And might I add that in my opinion, it is inappropriate to the GRA to be designated as a supervisory authority.

I commend the Government for its commitment to ensure that Guyana remains an AML compliant country. The commitment must be matched by the provision of adequate resources and properly thought-out decisions, consultation and legislation.

Christopher Ram

Maya Angelou, American literary giant and civil rights activist once said, “When people show you who they are, believe them the first time”. Unfortunately, when Esso showed us who they were from the first decade of this century, we not only did not believe them, but successive governments spinelessly conspired with them to cheat current and future generations of Guyanese of their patrimony.

A couple months after being awarded the petroleum deal of the 20th. century by the PPP/C in 1999, Esso claimed “force majeure” of the entire contract area of 26,808 sq. km because of an issue involving Suriname at one extreme of the contract area, claiming that they were prevented from carrying out their contractual obligations, presumably within any part of the contract area. What a brazen lie.

Yet, the PPP/C Government meekly acquiesced.

When in October 2008 after force majeure was lifted, Esso sought and the PPP/C entered into an Addendum to the 1999 Agreement, modifying the description of the contract area, the relinquishment obligation, and the initial period of the exploration programme.

Esso never accounted in its local books for huge and undisclosed sums received from Shell under an assignment and Farm out Agreement in 2009 for a 25% participating interest in the Stabroek Block. That was dodgy accounting at best.

Having got away with that dodgy accounting, Esso repeated the fake accounting when in 2011, Shell forked out more money to double its participating interest. Those moneys never found their way in the books of Esso. Shell later withdrew and in 2014, Esso sold participating interests to Hess (30%) and CNOOC (25%) in the Block. Effectively, Exxon sold the same rights twice, but never accounting for it once.

Those revenues should have been accounted for as credits, thus reducing the amount of contract cost recoverable by Exxon. Who knows, Exxon may have recovered as much from Shell, Hess and CNOOC as they themselves may have invested. Exxon has made profits without even having to invest their own money.

In 2015, when a team from the Petroleum Unit of the GGMC headed by Commissioner Newell Dennison visited the Exxon’s Head Office in Texas to discuss then current issues, the bullies from Texas inhospitably told them that the only thing to be discussed was a new Agreement.

When Dennison complained to Petroleum Minister Raphael Trotman in a written Memo of being “confronted” on a new Contract, Trotman did nothing. In fact, his Ministry started working towards the infamous 2016 Petroleum Agreement – shockingly, with the help of Exxon’s top lawyers.

To give legitimacy to the new Agreement, a Bridging Deed was concocted to make the 1999 Agreement part of the 2016 Agreement. By Trotman’s own admission in his recent book, the so-called signing bonus was not a signing bonus at all, but a sum to pay legal fees partly to protect Exxon’s interest.

Trotman of course had denied any such signing bonus until the veracity and his duplicity and mendacity were exposed in the media. To this day, he has been unrepentant.

In the new Agreement, at paragraph (k) of Section 3 of Annex C, Esso and its accomplices claimed from the Government US$460.2 Mn. as the combined pre-contract costs incurred by Exxon, CNOOC and Hess up to December 2015. Embarrassingly, their own audited financials for that year showed they had only expended AT A MAXIMUM US$368 Mn. If that is not fraud, I would like someone to tell what is a fraud!

Trotman commissioned an independent investigation by a UK law firm Clyde & Co “into the circumstances leading to the execution of the 2016 Petroleum Agreement”. Their report is a damning indictment of Exxon which actually wrote for Trotman the Cabinet Paper seeking approval of the 2016 Agreement. Neither Trotman nor his successor Vickram Bharrat made the report public.

Additionally, despite the incriminating information of Trotman’s and the APNU+AFC’s conduct in the execution of the Agreement, the PPP/C has refused to hold an inquiry, presumably to protect Exxon from public scrutiny and the discovery and exposure of their accounting shenanigans.

Trotman has suffered the lion’s share of blame and ignominy for the giveaway of the country’s patrimony. But the PPP/C is no less culpable. It was the PPP/C under Janet Jagan that started the whole monkey business. And the PPP/C that allowed the generous force Majeure in 2008 when the current VP was President. It is the PPP/C too that has refused to take up the damning Clyde & Co report. And it is the PPP/C that has played around with the IHS Audit report issued nearly three years ago.

We are paying the price for not believing the character which Exxon showed us close to 25 years ago.

Dear Editor,

The protection of the public from untruths, half-truths, misrepresentations and distortions dictates that I make an exception to my unwillingness to engage Mr Joel Bhagwandin in any place or in any capacity. As shown in the examples set out in this letter, his multiple-part responses in the print and social media to my repeated assertions about Esso’s financial shenanigans are replete with those four dangers.

Mr. Bhagwandin cannot even get a matter as basic as the date of the 2016 Petroleum Agreement correct – it is 27 June 2016 and not October 2016 as he asserts – but yet claims that I am “misleading” the country; that I have committed “a multiplicity of errors”; and that I have “inadvertently considered” the 2016 Agreement in respect of Pre-Contract Costs.

In an apparent attempt to rebut my assertion that the US$460.2 Mn claimed by Esso and the Co-venturers as pre-December 2015 expenditure was overstated by around US$92 million, he omits from his extract of the relevant and critical words “all such costs incurred under the 1999 Petroleum Agreement prior to yearend 2015….” to identify the period for which the US$460.2 Mn is claimed.

The distortions and dishonesty do not end there. Mr. Bhagwandin claims to have obtained Esso’s financial statements for the period 1999 – 2015. That is most certainly a falsehood. Esso itself admitted to the IHS auditors that it had “purged data prior to 2004” in accordance with its document retention policy. Mr. Bhagwandin also claims receipt of audited financial statements of Shell, which had bought a 50% interest in the Stabroek Block. That too, is most likely a falsehood. As I am pointing out in my Oil and Gas column this coming Friday, the Commercial Registry has no record of any annual return filed by Shell, let alone any financial statements. I do not care whether Mr. Bhagwandin is singing to and for Esso and Shell. I am far more concerned with the litany of falsehoods and misrepresentations being fed to a trusting and unsuspecting public.

Mr. Bhagwandin also demonstrates some mathematical limitations by claiming that “Having examined ExxonMobil’s and its Co-venturers financial statements for the period up to 2016, and 2017, total (cumulative) expenses up to 2016 amounted to US$382.3 Mn. and in 2017, total expenses for that year amounted to US$109.3 Mn., giving rise to a total up to 2017 of US$491.6 Mn.” If Bhagwandin’s 2016 numbers are correct – which they are not – then he is suggesting that Exxon’s overstatement is greater than my US$92 Mn!

Whether Mr. Bhagwandin has read and understands the very provision in the Petroleum Agreement which he has so infamously misquoted, speaks to his comprehension. But there are also mathematical deficiencies on display as well. Only by the strangest maths – or inexplicable credits – can the accumulated cost at December 2016 be less than the accumulated cost at December 2015! Put another way, Mr. Bhagwandin is suggesting that the total expenditure for the two years 2016 and 2017 – immediately after the discovery of oil – was only US$31.4 million (US$491.6 Mn – US$460.2Mn). Even common sense would caution against such an absurd proposition. But nothing it seems, restrains Mr. Bhagwandin.

Mr. Bhagwandin has expressed a desire to debate with me on oil and gas. He will have earned such a privilege when he can demonstrate:

• that he understands the difference between GAAP and generally accepted accounting principles (one is capitalised and specific to the USA, the other is generic across jurisdictions), each with its own nuanced meanings and applications;
• that he is capable of understanding the difference between the Minister’s audit under Article 23 of the 2016 Petroleum Agreement, and the right of the GRA to carry out a tax audit of the returns of any taxpayer under the tax laws;
• that he has read and understands the (Guyana) Revenue Authority Act and critically, the powers and functions the Act confers on the Authority and on the Commissioner General;
• that he understands the legal concepts of intra vires and ultra vires;
• that he has read the IHS final audit report in which Exxon admits that its claim of US$460.2 Mn. of expenses prior to 2016 (meaning 2015 and earlier) is overstated by an unspecified sum, because of “items erroneously included in the cost bank”; and
• that he is capable of engaging honestly and quoting correctly.

Considering Mr. Bhagwandin’s demonstrated deficiencies in arithmetic, integrity, comprehension, analytical capabilities and legal and accounting questions on which seeks to pronounce, he is unworthy of a debate with anyone, and in my case, any further exchanges.

Christopher Ram