NEWS
BRIDGE OPENINGS
The Demerara Harbour Bridge will be closed to vehicular traffic on Sunday, October 13 from 12:00h to 13:30h. The Berbice River Bridge will be closed to vehicular traffic on Sunday, October 13 from
11:30h and 13:00h.
WEATHER TODAY
Countrywide: Heavy rain showers are expected during the day with lighter showers in the evening over coastal and near inland locations. Temperatures are expected to range between 24 degrees and 30 degrees Celsius. Winds: Easterly between 1.94 and 2.22 metres per second. High Tide: 11:44h and 00:14h reaching maximum heights of 2.22 metres and 2.27 metres respectively. Low Tide: 17:42h reaching a minimum height of 1.03 metres.
SATURDAY, OCTOBER 12, 2013
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FREE TICKET
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SUNDAY, OCTOBER 13, 2013 | GUYANATIMESGY.COM
Scam of the millennium
GSL directors Glenn Lall, Tony Yassin skim off $602M
– NIS, 1561 shareholders get nothing – owe $354M in taxes
W
hen Guyana Stores Limited (GSL) was privatised in 2000, Mohan Lall, also known as Glenn Lall, and Tony Yassin of Royal Investments Inc (RII), acquired 70 per cent, the National Insurance Scheme (NIS) had 10 per cent, and employees and other small shareholders collectively owned the remaining 20 per cent of the company. For the next decade, the company refused to hold annual general meetings, did not issue annual reports and simply declared every year that, since they did not make any profits, no dividend could be declared. As such, the NIS, the employees and other small shareholders received not a penny. Yet it is now revealed, when GSL annual reports up to 2009 were recently compiled and hastily submitted, that during that time the directors, including Glenn Lall and Tony Yassin, skimmed off an astounding $602.9 million in “interest, consultancy fees, allowances and accommodation”. The NIS, it was revealed in the press – and trumpeted in the Kaieteur News – is in danger of not having funds to meet its obligations to its subscribers who are overwhelmingly the poor and retired employees. These subscribers, most of whom would be employees of the state, such as public servants, teachers and police officers, as well as of employees of the Guyana Sugar Corporation (GuySuCo), would have had to work and contribute
Kaieteur News owner and publisher Mohan Lall, aka Glenn Lall
Owner of the majority shares in Royal Investment Inc, Tony Yassin
at least 15 years to qualify for payments that are now in jeopardy because of the scam of Glenn Lall, Tony Yassin and company.
tion alone. In light of the inability of the company to ever turn a profit, it is pertinent to ask of what use was the advice the $303.399 million paid as “consultancy fees” to the directors? But the scam does not end with those payments. As the owner of the majority of shares in RII, Tony Yassin had promised to “inject equity” into GSL at the time of privatisation. But the reports show that he actually classified his “injection” as a “loan” for which he has been charging 19.5 per cent interest. On the other hand, the millions of dollars that the government loaned have not only not been repaid, but they deny that any interest should be charged. Looking at the figures from another angle, the financial statements of GSL shows that, in 1999, the NIS’s 10 per cent was worth some $32 million and the
Quandary Of the 1561 small GSL shareholders, about half are employees who had spent their hard earned salaries to purchase shares. Because GSL was in breach of the Companies Act through the dereliction of duty by Glenn Lall and Yassin; the small stockholders could not even sell off their shares. They were stuck with pieces of worthless paper instead of receiving a steady stream of dividends to tide them through their retirement. Many might have already died as paupers. The GSL annual reports, however, disclosed that Glenn Lall, Tony Yassin and other directors spent $126.507 million on allowances and accommoda-
small stockholders $64 million. In the following decade, through misappropriation, mismanagement and other financial skulduggery, the company moved from owning assets of $316 million to owing $847 million in liabilities. Losses This means that the book value of NIS’s 10 per cent equity stake is now a negative $85 million, and other shareholders, a negative $170 million. In other words, if the GSL were to be liquidated today, and that is a foregone conclusion, given the Guyana Revenue Authority (GRA) has taken them to court and won its case for $354 million in unpaid taxes, then the NIS will completely lose its 10 per cent investment in GSL and the small shareholders, including past employees, their 20 per cent. In the U.S., citizens have seen and wondered at the greed and avarice of financial scammers such as Bernie Madoff, who bilked individuals of their hard earned money. He and some others were jailed for their scams. In Guyana, several members of the business community have said that the laws have to be modified so that such individuals on the local scene can be brought to justice and jailed. Information from this article was extracted from an audited report done by Ram and McRae accounting firm. It was provided by a source within the company.