An application filed by the State Assets Recovery Agency (SARA) to recover $2,701,619,960 from Queens Atlantic Investment Inc. (QAII) has been fixed for Thursday, September 19, before High Court Judge Diane Insanally. SARA says that it is seeking a Civil Recovery Order under Section 41 of its Act to recover the monies which represent monies wrongly denied to the people of Guyana by reason of the unlawful conduct of a public official in respect to the sale of state property.
SARA is also seeking costs, interest and any other orders the court may deem just. SARA’s Director Dr. Clive Thomas, the Applicant, believes that the monies represents the difference between the amounts obtained through the sale of state property, Sanata Textiles Complex to QAII. He contends that it also represents the significantly higher amount that would have accrue to the State had the property been sold at a price reflecting a proper evaluation.
According to Thomas, “ (Sanata Complex) was sold further to the terms of a Lease Agreement that allowed the leasee to exercise an option to purchase based on a value of the date of execution determined by the average of two recognized property valuers named by each of the parties. This formula reflect the essence of the Respondent’s (QAII) proposal to lease the complex rather that the wording of the Cabinet decision that the option would only be exercisable after the completion of the investment of US$27M and at a determined price by one of more acceptable valuers.
Thomas said that the Lease Agreement did not include the proviso by Cabinet that the option was only exercisable after the completion of the said investment programme. Thomas too said that QAII obtained a valuation dated May 29, 2007 of $370,375,000 by Peter Green for the Sanata Complex, while the National Industrial and Commercial Investment Limited (NICIL) obtained a valuation of $1,042,403,500 by Rodrigues Architects which was dated June 7, 2007.
By Order No. 40 of 2010 for the transfer of property, Parcel 4702 comprising 18,891 acres of land at Plantation Ruimveldt with buildings and erections, being the Sanata Complex, the property was transferred from NICIL to QAII, which previously had the option to lease the property from NICIL with an option to purchase. The property, he added, was owned by governmento at all material times since December 1978, then as Sanata Textiles Complex, until its dissolution which saw all its assets being transferred to NICIL on December 29, 2000.
In his affidavit, Thomas states, “I am advised by (SARA’s) attorneys-at-Law and verily believe that the acts and omissions of NICIL, more particularly of its then Chief Executive Officer, (Winston Brassington) evidence unlawful conduct in terms of Sections 16 and 17 of the (SARA) Act.”
Last year, Former Finance Minister Dr. Ashni Singh and Brassington were charged in relation to selling the Sanata Textile Complex at a grossly undervalued price. The charge stated between October 26, 2010 and December 20, 2010 at Lot 126 Barrack Street, Kingston, Georgetown, by way of Agreement of Sale and Purchase, acted recklessly when they sold to Queens Atlantic Investment Inc, Sanata Texiles Complex, with building and erections thereon, that is to say, Parcel 4702, Part of Plantation Ruimveldt, situated on the East Bank Demerara, being 18.891 acres, being $697,864,800.00 plus VAT, knowing that the said property was valued at the sum of $1,042,403,500.00, and was therefore being sold at a price that was grossly undervalued, thereby creating a breach of their duties.
Among other things, Thomas contends that since NICIL was empowered by government to sell the Sanata Textiles complex and “this imposed upon it the fiduciary duty to act in good faith and with honesty and due diligence to ensure that the best price or value was obtained.” He, therefore, argues that NICIL acted in breach of its duty by accepting and causing Cabinet to approve the significantly undervalued price of $697,864,800 based on the pricing formula imposed by QAII rather than the Cabinet decision including the proviso.
“Comparisons of valuations of comparable property sales in Georgetown suggest that the Rodrigues Architects Limited valuation is the more realistic of the two valuations obtained,” Thomas noted in the court document.
Thomas said that he was advised by his lawyers that the acts of NICIL in dealings with QAII arise and irresistible interference that the breach of fiduciary duty, or alternately fraudulent actions was intentional or reckless or negligent.
In this regard, he explained that the difference between the Rodrigues Architect valuation of $1,042,403,500 and the undervalued sale price of $$697,864,800 plus the Guyana dollars equivalent of US$16M, this being the difference between the US$27M that was required under the proviso stipulated by Cabinet as an investment and the US$21M that was invested, together constitutes recoverable property in the liquidated sum of $2,701,619,960.
Thomas is thereby, asking the court to grant him the orders being sought.