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EDITORIAL - Transparency needed in divestment of assets
Published: Tuesday | January 27, 2009
The current controversy over the way the Government has gone, or is going about, the lease to Nationwide News Network of a channel on which to conduct its broadcasts has echoes of a debate of several months ago and again underlines the need for clear rules for the transparent divestment of state-owned assets.
Indeed, we are surprised at this latest development, given the stance of administration officials over the previous matter, particularly the finance minister, Audley Shaw.
Last May, we recall, Mr Shaw went public with what he portrayed as unsavoury, even corrupt, financial arrangements between the former government and the merchant bank, Dehring Bunting & Golding (DB&G), when it was owned by two current parliamentarians of the now opposition People's National Party, Peter Bunting and Mark Golding.
Sweetheart arrangement
Particularly highlighted was DB&G's acquisition, securitising, discounting and clearing an outstanding debt to the Government by Michael Lee Chin from his purchase of the National Commercial Bank.
Mr Shaw's complaint was that DB&G, for little work, charged an outrageous fee. Worse, no other financial institution had been able to bid on the deal. It was a sweetheart arrangement, he implied.
Mr Bunting insisted that his bank's fee was in the normal range of commissions on such deals. Moreover, he argued, it could not be expected that the deal would go to public tender, given that it was once conceived by DB&G, unsolicited by the administration, to deal with a cash-flow problem, which the bank knew the Government to be facing.
Mr Shaw was not impressed with Mr Bunting's explanation. Neither were many people, including some journalists, who brought to the fore that natural tool of their trade: a healthy dose of scepticism. Indeed, the contractor general saw it fit to investigate the complaint.
It is ironic that much the same argument used by Mr Bunting is now being offered for its divestment of the broadcast spectrum without a public offer - that Nationwide came to it, unsolicited, with a business proposal. The company's commercial interest, therefore, would be hurt if there was a public call to tender.
Higher standard of governance
Our concern here is not the value placed on the asset or the price that Nationwide is prepared to pay for its lease, but rather, the broader principle of how such things ought to be done.
Indeed, this administration promised to be one wedded to transparency and a higher standard of governance, which it claimed was in deficit with its predecessor.
In that regard, it, like us, should hold that public posts should be advertised and that except in the rarest of circumstance, state assets ought to go to public tender to avoid the fact and/or perception of 'sweetheart deals' of the type against which Mr Shaw warned. The commercial playing field must not only be level, but be seen to be so.
Of course, Nationwide News Network has a legitimate interest in ensuring that its commercial strategies are not compromised, and is in its right to seek a legal and fair business advantage. Going to public tender need not undermine this; not in the context of the existence, intellectual property rights and confidentially agreements.
In the final analysis, the overarching responsibility of the Government is to ensure the public interest and the creation of the environment in which there is and can be confidence.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
Published: Tuesday | January 27, 2009
The current controversy over the way the Government has gone, or is going about, the lease to Nationwide News Network of a channel on which to conduct its broadcasts has echoes of a debate of several months ago and again underlines the need for clear rules for the transparent divestment of state-owned assets.
Indeed, we are surprised at this latest development, given the stance of administration officials over the previous matter, particularly the finance minister, Audley Shaw.
Last May, we recall, Mr Shaw went public with what he portrayed as unsavoury, even corrupt, financial arrangements between the former government and the merchant bank, Dehring Bunting & Golding (DB&G), when it was owned by two current parliamentarians of the now opposition People's National Party, Peter Bunting and Mark Golding.
Sweetheart arrangement
Particularly highlighted was DB&G's acquisition, securitising, discounting and clearing an outstanding debt to the Government by Michael Lee Chin from his purchase of the National Commercial Bank.
Mr Shaw's complaint was that DB&G, for little work, charged an outrageous fee. Worse, no other financial institution had been able to bid on the deal. It was a sweetheart arrangement, he implied.
Mr Bunting insisted that his bank's fee was in the normal range of commissions on such deals. Moreover, he argued, it could not be expected that the deal would go to public tender, given that it was once conceived by DB&G, unsolicited by the administration, to deal with a cash-flow problem, which the bank knew the Government to be facing.
Mr Shaw was not impressed with Mr Bunting's explanation. Neither were many people, including some journalists, who brought to the fore that natural tool of their trade: a healthy dose of scepticism. Indeed, the contractor general saw it fit to investigate the complaint.
It is ironic that much the same argument used by Mr Bunting is now being offered for its divestment of the broadcast spectrum without a public offer - that Nationwide came to it, unsolicited, with a business proposal. The company's commercial interest, therefore, would be hurt if there was a public call to tender.
Higher standard of governance
Our concern here is not the value placed on the asset or the price that Nationwide is prepared to pay for its lease, but rather, the broader principle of how such things ought to be done.
Indeed, this administration promised to be one wedded to transparency and a higher standard of governance, which it claimed was in deficit with its predecessor.
In that regard, it, like us, should hold that public posts should be advertised and that except in the rarest of circumstance, state assets ought to go to public tender to avoid the fact and/or perception of 'sweetheart deals' of the type against which Mr Shaw warned. The commercial playing field must not only be level, but be seen to be so.
Of course, Nationwide News Network has a legitimate interest in ensuring that its commercial strategies are not compromised, and is in its right to seek a legal and fair business advantage. Going to public tender need not undermine this; not in the context of the existence, intellectual property rights and confidentially agreements.
In the final analysis, the overarching responsibility of the Government is to ensure the public interest and the creation of the environment in which there is and can be confidence.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
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