Gov’t Challenges Court in US$10.7M Vehicles Debt

first_imgThe court is yet to come out with a definite decision more than two months after government lawyers challenged the legality of the Commercial Court to hear a US$10.7M vehicle debt lawsuit brought against them by Lebanese businessman, George Haddad.If the court rules that it has jurisdiction, it means that it would proceed into the merit of the case, which may likely compel government to pay US$10.7m debt owed Mr. Haddad, a judicial expert hinted to the Daily Observer.Mr. Haddad‘s lawyer filed a lawsuit against the government claiming that  from 2000 to 2008, their client  sold and repaired several vehicles and also supplied spare parts to government institutions amounting to US$10.7M. However, government is yet to pay the money, despite their client’s persistent attempts to collect payment.Prior to challenging the court’s authority to handle the matter, government lawyers openly admitted that they were indebted to the Lebanese businessman.They made the confession when the court held a conference with both parties. Surprisingly, after hearing government’s admission and subsequent contention over the court’s jurisdiction, the Resident Chief Judge, Eva Mappy Morgan, one of the judges of the three-judge panel that is managing the court, suspended the case without setting a definite date for their ruling into the matter.The judicial expert informed this newspaper that the plaintiff and his lawyers do not know the reason behind the court’s delay in deciding the matter.According to the expert, the act that created the court provides that “It shall have jurisdiction over and in all civil actions arising out of or in relation to commercial transactions in which the claim is at least US$15,000…”The act further provides that “the court has jurisdiction over all commercial cases and claims, irrespective of the residence of parties or what . . . cause of action arose.”It further states that “it has jurisdiction over all disputes in connection with the creation, negotiation, and enforcement of any negotiable instrument, including the liabilities and rights associated with it.”“It has the power to adjudicate all commercial matters within its jurisdiction and . . . claims over which the circuit court, the debt court and the commercial court have concurrent jurisdiction may not need to be moved from the court at which it has been instituted.Despite these jurisdictions, a state lawyer, Cllr. Augustine Fayia, argued that the case be dismissed on the grounds that the court lacks what he termed as “jurisdiction” to try the case.He also contended that the court was established in 2010, which shows that the law creating it prevented it from hearing matters prior to its establishment.Cllr. Fayia’s contention came after the state lawyers and Haddad’s lawyers rested with the final arguments in early February.However, the state lawyer did not deny government indebtedness to the foreign businessman; rather Cllr. Fayia argued that the court lacks jurisdiction.The case arose in 2012, when Haddad’s legal team, the Sherman & Sherman Law Firm filed a lawsuit against government.In that lawsuit, the lawyers contended that from 2000 to 2008, Mr. Haddad sold and repaired several vehicles and also supplied spare parts to government institutions amounting to US$10.7M. However, government is yet to pay the money, despite their client’s persistent negotiations.Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)last_img read more

Employees will not lose their jobs – source

first_imgScotiabank’s sale to Republic BankAlthough there is well-known fear that the sale of the Bank of Nova Scotia (Scotiabank) to Republic (Bank) Financial Holdings Limited could lead to dozens of employees being sent home, a source close to the transaction has revealed that this may be far from the truth.Trinidad-based Republic Financial Holdings Limited (RFHL) has entered into negotiations to acquire Scotiabank’s operations in nine Caribbean countries, including GuyanaAccording to the source, this and other issues were discussed at the recent Republic Bank Annual General Meeting (AGM) that was held on Monday. Guyana Times was told that it was decided that no employee of Scotiabank in Guyana will be made redundant.Washington DC-based Financial Analyst Sasenarine Singh had expressed worry over the possibility of Republic Bank acquiring Scotiabank. He said it could lead to staff at the latter becoming jobless, and it would indeed have negative implications for the local financial sector.“And what are they buying? They wouldn’t buy new locations. They are basically buying a loan portfolio and a deposit base. It’s easy for Republic Bank to get rid of most of the properties owned by Scotiabank and merge their portfolios,” he declared.Former Presidential Advisor, economist Ramon Gaskin, also believes that the sale to Republic Bank would only allow that banking institution to dominate the local banking sector in Guyana, which could be unhealthy for the financial sector.Gaskin said, “I think that this proposed sale of Scotiabank in Guyana to Republic Bank should not be allowed by the Government of Guyana and the Governor of the Central Bank.”The outspoken economist had told Guyana Times that before Scotiabank ventured into any arrangement with Republic Bank, it should have consulted with the Government.“Now that is putting the Government and the Governor in an awkward position of opposing it and all of that. I think (the banks) erred in not consulting with the appropriate authority before getting into it; and it shows a lack of respect, in my opinion, to the authorities here,” he said.But more importantly, Gaskin believes that since Scotiabank wants to exit the Guyanese market, there should be an option for local entities to acquire its banking operations.“They shouldn’t sell to any foreign bank. There isn’t any reason why the local Guyanese business people can’t get together and take it over from them. They can build a Guyanese bank with developmental features to help finance agriculture and small business,” he declared.Meanwhile, the source also disclosed that the negotiations of sale between Scotiabank and Trinidad-based Republic Financial Holdings Limited (RFHL) will take between 12 and 18 months.The RFHL has entered into an agreement to acquire Scotiabank’s banking operations in nine Caribbean countries. It is acquiring locations in Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.Further, the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited, and a premium of US$98 million over net asset value for operations in the remaining eight countries.The Guyana Government has said the agreement “raises a number of issues for the banking sector in Guyana and for the public which the Finance Ministry, the Bank of Guyana and the Government of Guyana will need to carefully consider”.The Ministry, in a statement, said that it has taken note of the statement by RFHL that the agreement is “subject to all regulatory approvals”. It posited that the Financial Institutions Act (FIA) has clear stipulations regarding “acquisition of control”, and requires approval of the Bank of Guyana following the submission of an application and due diligence being conducted.“Further the FIA addresses as well the issue of ‘fundamental changes’ as it relates to mergers and transfer of assets or liabilities. The agreement raises a number of issues for the banking sector in Guyana and for the public which the Ministry of Finance, the Bank of Guyana, and the Government of Guyana will need to carefully consider,” the Finance Ministry said.But the source argued that RFHL is not in breach of the Act, because any business would seek to have a Memorandum of Understanding (MoU) in place first. According to him, it doesn’t make business sense for the company to allow the regulators to know their options.Republic Bank currently holds 35.4 percent of the banking system’s assets and 36.8 percent of deposits. The acquisition will up this to 51 percent of both assets and deposits.last_img read more