NICIL still negotiating with Chinese co. over US$5M owed for GTT shares
The National Industrial and Commercial Investments Limited (NICIL) is currently still engaged in negotiations with Hong Kong Golden Telecom Limited (HKGT) to settle the Chinese company’s remaining payment for its purchase of government shares in the Guyana Telephone and Telegraph Company (GTT).
“I hope we will reach a decision this year,” NICIL Chief Executive Officer Horace James told Stabroek News during a brief comment at his office last Wednesday.
In March last year, Minister of State Joseph Harmon and a delegation controversially travelled to China to engage in discussions with regard to the payment of the US$5 million balance owed to the government for the purchase of 20% of GTT shares by Chinese company Datang Telecom Technology and Industry Group, the parent company of HKGT, from NICIL in 2012. This deal was entered into by the PPP/C administration but only US$25 million of the agreed US$30 million was known to have been paid.
It was later revealed that Harmon had obtained documents which showed that the money was paid over prior to the APNU+AFC coalition taking office and efforts were underway to track the money. “So, we are trying to track down to whom, how and where,” Minister of Natural Resources Raphael Trotman had said during a post-cabinet press briefing.
On April 28 last, NICIL released a statement which said that it had not received the outstanding US$5M balance. Since then, the current government and the PPP have traded accusations on whether the money was received.
During an end of year press conference last December, James had revealed that NICIL was on the verge of preparing to begin arbitration to recover the outstanding balance. However based on what he said on Wednesday, NICIL decided to engage HKGT on a one-on-one level as opposed to getting a third party involved.
James repeatedly stressed that discussions are presently ongoing. “We are continuing the discussions,” he said.
When asked about arbitration, he informed that such a process has not started. “No we are continuing negotiations,” he said. He then expressed hope that the matter will be brought to finality in the coming months.
James assured Stabroek News that the matter is being actively pursued.
During the press conference, he had made it clear that the outstanding balance was never handed over.
“Let it be clear, NICIL has not received the remaining (US) $5 million that is owed…NICIL is in the process of executing all the relief measures that are in the sales agreement in order for us to recover the $5 million,” he had said.
James had explained that NICIL had already started consultations with the US lawyer that helped the company to draft the sales agreement. A firm in the UK was also recommended for the arbitration aspect of the matter, he had said before explaining that it is important that UKbased legal experts are used as the arbitration would take place in London. “We will seek all the relief measures that the agreement grants to us which will be among other things not only the recovery of our US$5 million but also interest, legal fees…we are going for the entire thing and also not only the signatory to the agreement, we are also going after the guarantor,” he had said, while explaining that NICIL’s lawyers have presented all the issues concerning the shares sale and have since advised that it had a “very good chance” of getting all the relief that is being sought.
James had also confirmed then that Harmon did submit a document to NICIL following his return from the fact-finding China trip. Asked about the contents of this document, James informed that the purchaser of the shares indicated that they had discussions with former Guyana Ambassador to China, Dr David Dabydeen and that they were under the impression that they were relieved from paying the outstanding sum. James had made it clear to reporters that the company was never relieved of this obligation.
NICIL, in its statement, had outlined in detail the agreement that had been made between it and HKGT. It said that on November 8, 2012, US$25 million was wired to NICIL and the remaining balance of US$5 million became due and payable to NICIL on October 22, 2014.
“Despite several written requests by NICIL, HKGT has still failed to pay the balance of the purchase price,” the statement said, while adding that NICIL, in an attempt to bypass the court, which would be costly and time-consuming, approached the Guyana government for help in encouraging the payment of the outstanding balance through diplomatic channels.
“To NICIL’s knowledge, neither HKGT nor its related companies have alleged that the balance of US$5 million was paid. What was alleged by the purchaser’s signatory to the agreement was that following a series of communications with the former
Guyana Ambassador to China (to be authenticated) HKGT was assured that they were not required to pay the balance of US$5 million, because the HKGT had not been granted the same minority protection rights enjoyed by NICIL (i.e. two, instead of one, representatives on the GT&T Board of Directors) which HKGT alleged were promised to them. HKGT also alleged that the decision to waive the US$5 million was contained in a side agreement,” NICIL had said.
HKGT officials in March met with representatives of NICIL and put forward a proposal regarding the outstanding payment. While the details of this proposal was not made public, it was later revealed that it has to do with the payment of a reduced sum. NICIL’s board and the government were to have studied it before a final decision is made.