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Observer:
'IMPROPER'
Contractor general raps 2004 deal between Gov’t, DB&G
Friday, August 27, 2010
var addthis_pub="jamaicaobserver";
CONTRACTOR General Greg Christie has described as "irregular and highly improper" the execution of a contract between the Government and Dehring, Bunting and Golding (DB&G) for the sale of receivables before a formal written agreement was finalised.
At the same time Christie, in his probe of what Finance Minister Audley Shaw had labelled "Sweetheart Deals" between the People's National Party Government and the investment bank in March 2004, concluded that the transaction was not subject to competition.
As such, he said, he was unable to conclusively determine that the transaction was fair, transparent and/or indicative of the most beneficial terms and conditions which could have been derived by the Government, given the lack of competition.
Christie opened his probe into the matter in May 2008 after Shaw told the Parliament a month earlier that receivables from the sale of National Commercial Bank shares as well as receivables due from AIC were sold to DB&G by the finance ministry at a discount.
Shaw had alleged that the instruments were sold to DB&G "under very questionable circumstances" because the firm was close to the then Government.
But Peter Bunting, one of DB&G's principals at the time who is now an Opposition parliamentarian, argued that the deal was struck at a time when the Government was facing a challenge to meet its fiscal target.
Failure to meet that target, Bunting said, would have been damaging to the economy, as it would result in expectations of higher public sector borrowings and higher interest rates in the coming year.
Christie, in his report, said he found that the AIC receivables were sold at a discounted rate to DB&G and included the payment of a one per cent arrangement fee by the finance ministry.
According to Christie, it was DB&G that approached the ministry with the idea.
However, he said that sworn evidence obtained from the finance ministry indicated that "it is not a common practice to offer discounts on financial instruments whilst simultaneously paying a handling fee".
The contractor general also said that DB&G sold $852 million of the AIC receivables to the National Housing Trust (NHT) and the National Insurance Fund (NIF) "at a price which varied from that at which it had bought the said receivables".
He concluded that DB&G presented the NHT with the terms and conditions of the AIC receivables transaction on March 15, 2004, prior to the finalisation of a formal signed agreement with the finance ministry on March 26, 2004.
As such, Christie described DB&G's action as "premature" despite the short timeline identified as being available to complete the transaction.
Based on his findings, Christie recommended that the Public Administration and Appropriations Committee of Parliament as well as the Auditor General undertake an immediate review of the evaluation and approval processes for commercial agreements by the finance ministry.
He also repeated his recommendation that "the concept of the unsolicited proposal, which has found its way into the country's procurement conventions, should be immediately excised from the Government's procurement guidelines".
He expressed concern that the unsolicited proposal mechanism "is a corruption-enabling device which can be utilised by unscrupulous public officials to direct lucrative multimillion-dollar state contracts to connected, undeserving or desired contractors".
All such proposals, he insisted, should be tested for propriety, legitimacy, cost-effectiveness, quality, value for money and competitiveness in the open market.
He also said he was referring the matter of the NIF's purchase of the AIC receivables to the solicitor general and the auditor general for a determination to be made as to whether the fund's actions amounted to a breach of the National Insurance Act.
Yesterday, Daryl Vaz, the minister who has responsibility for information and whose government has been under attack by the PNP over the Manatt, Phelps & Phillips affair, said the contractor general's report demonstrated that the Opposition party has no moral authority to question anybody, based on its 18-year tenure in Government.
"It shows hypocrisy at the highest level, and I go further to say that the PNP has more nerve than a bad tooth," said Vaz.
He said the contractor general's recent findings do not give the Government any good feeling, as the revelations are not good for Jamaica.
Gleaner:
Christie: PNP deals with DB&G clean
Published: Friday | August 27, 2010 0 Comments and 0 Reactions
Bunting(l)
Contractor General Greg Christie has found nothing illegal in the so-called "sweetheart deals" between the former People's National Party (PNP) government and the former investment [COLOR=blue! important][COLOR=blue! important]banking[/COLOR][/COLOR] firm Dehring, Bunting and Golding (DB&G). However, the Office of the Contractor General (OCG) has concluded that aspects of the deals were "irregular and highly improper".
But former DB&G executive Peter Bunting yesterday argued that the areas described by the OCG as irregular and improper were normal transactions.
"I have not yet received the report but, having seen the conclusion, I understand the contractor general's concerns, but it is not unusual for companies to start building a book (seeking buyers) even before a deal is com-pleted," Bunting told The Gleaner.
"I was always sure that there was nothing illegal about the deal ... ," added Bunting.
The OCG launched an investigation into the two deals after Shaw raised concerns about the deals during his Budget [COLOR=blue! important][COLOR=blue! important]presentation[/COLOR][/COLOR] in 2008.
At that time, Shaw questioned an agreement, signed in March 2004, for the sale to DB&G of certain government-owned receivables which were due from AIC Limited, consequent upon the sale by the Government of its shares in National Commercial [COLOR=blue! important][COLOR=blue! important]Bank[/COLOR][/COLOR]; and the resale of a portion of these receivables, by DB&G, to two public entities - the National Insurance Fund and the National Housing Trust.
The finance minister also questioned an agreement, signed on March 31, 2005, which is alleged to have involved the provision of a US$29.6-million short-term bridge financing facility, by DB&G, to the Ministry of Finance then headed by Dr Omar Davies.
In its report released yesterday, the OCG said the terms and conditions of the two transactions were favourable to DB&G.
But the OCG said it was unable to conclusively determine that the transaction for the sale of the NCB shares to DB&G was "fair, transparent and/or indicative of the most beneficial terms and conditions which could have been derived by the GOJ ([COLOR=blue! important][COLOR=blue! important]Government[/COLOR][/COLOR] of Jamaica) given the lack of competition".
Observer:
'IMPROPER'
Contractor general raps 2004 deal between Gov’t, DB&G
Friday, August 27, 2010
var addthis_pub="jamaicaobserver";
CONTRACTOR General Greg Christie has described as "irregular and highly improper" the execution of a contract between the Government and Dehring, Bunting and Golding (DB&G) for the sale of receivables before a formal written agreement was finalised.
At the same time Christie, in his probe of what Finance Minister Audley Shaw had labelled "Sweetheart Deals" between the People's National Party Government and the investment bank in March 2004, concluded that the transaction was not subject to competition.
As such, he said, he was unable to conclusively determine that the transaction was fair, transparent and/or indicative of the most beneficial terms and conditions which could have been derived by the Government, given the lack of competition.
Christie opened his probe into the matter in May 2008 after Shaw told the Parliament a month earlier that receivables from the sale of National Commercial Bank shares as well as receivables due from AIC were sold to DB&G by the finance ministry at a discount.
Shaw had alleged that the instruments were sold to DB&G "under very questionable circumstances" because the firm was close to the then Government.
But Peter Bunting, one of DB&G's principals at the time who is now an Opposition parliamentarian, argued that the deal was struck at a time when the Government was facing a challenge to meet its fiscal target.
Failure to meet that target, Bunting said, would have been damaging to the economy, as it would result in expectations of higher public sector borrowings and higher interest rates in the coming year.
Christie, in his report, said he found that the AIC receivables were sold at a discounted rate to DB&G and included the payment of a one per cent arrangement fee by the finance ministry.
According to Christie, it was DB&G that approached the ministry with the idea.
However, he said that sworn evidence obtained from the finance ministry indicated that "it is not a common practice to offer discounts on financial instruments whilst simultaneously paying a handling fee".
The contractor general also said that DB&G sold $852 million of the AIC receivables to the National Housing Trust (NHT) and the National Insurance Fund (NIF) "at a price which varied from that at which it had bought the said receivables".
He concluded that DB&G presented the NHT with the terms and conditions of the AIC receivables transaction on March 15, 2004, prior to the finalisation of a formal signed agreement with the finance ministry on March 26, 2004.
As such, Christie described DB&G's action as "premature" despite the short timeline identified as being available to complete the transaction.
Based on his findings, Christie recommended that the Public Administration and Appropriations Committee of Parliament as well as the Auditor General undertake an immediate review of the evaluation and approval processes for commercial agreements by the finance ministry.
He also repeated his recommendation that "the concept of the unsolicited proposal, which has found its way into the country's procurement conventions, should be immediately excised from the Government's procurement guidelines".
He expressed concern that the unsolicited proposal mechanism "is a corruption-enabling device which can be utilised by unscrupulous public officials to direct lucrative multimillion-dollar state contracts to connected, undeserving or desired contractors".
All such proposals, he insisted, should be tested for propriety, legitimacy, cost-effectiveness, quality, value for money and competitiveness in the open market.
He also said he was referring the matter of the NIF's purchase of the AIC receivables to the solicitor general and the auditor general for a determination to be made as to whether the fund's actions amounted to a breach of the National Insurance Act.
Yesterday, Daryl Vaz, the minister who has responsibility for information and whose government has been under attack by the PNP over the Manatt, Phelps & Phillips affair, said the contractor general's report demonstrated that the Opposition party has no moral authority to question anybody, based on its 18-year tenure in Government.
"It shows hypocrisy at the highest level, and I go further to say that the PNP has more nerve than a bad tooth," said Vaz.
He said the contractor general's recent findings do not give the Government any good feeling, as the revelations are not good for Jamaica.
Gleaner:
Christie: PNP deals with DB&G clean
Published: Friday | August 27, 2010 0 Comments and 0 Reactions
Bunting(l)
Contractor General Greg Christie has found nothing illegal in the so-called "sweetheart deals" between the former People's National Party (PNP) government and the former investment [COLOR=blue! important][COLOR=blue! important]banking[/COLOR][/COLOR] firm Dehring, Bunting and Golding (DB&G). However, the Office of the Contractor General (OCG) has concluded that aspects of the deals were "irregular and highly improper".
But former DB&G executive Peter Bunting yesterday argued that the areas described by the OCG as irregular and improper were normal transactions.
"I have not yet received the report but, having seen the conclusion, I understand the contractor general's concerns, but it is not unusual for companies to start building a book (seeking buyers) even before a deal is com-pleted," Bunting told The Gleaner.
"I was always sure that there was nothing illegal about the deal ... ," added Bunting.
The OCG launched an investigation into the two deals after Shaw raised concerns about the deals during his Budget [COLOR=blue! important][COLOR=blue! important]presentation[/COLOR][/COLOR] in 2008.
At that time, Shaw questioned an agreement, signed in March 2004, for the sale to DB&G of certain government-owned receivables which were due from AIC Limited, consequent upon the sale by the Government of its shares in National Commercial [COLOR=blue! important][COLOR=blue! important]Bank[/COLOR][/COLOR]; and the resale of a portion of these receivables, by DB&G, to two public entities - the National Insurance Fund and the National Housing Trust.
The finance minister also questioned an agreement, signed on March 31, 2005, which is alleged to have involved the provision of a US$29.6-million short-term bridge financing facility, by DB&G, to the Ministry of Finance then headed by Dr Omar Davies.
In its report released yesterday, the OCG said the terms and conditions of the two transactions were favourable to DB&G.
But the OCG said it was unable to conclusively determine that the transaction for the sale of the NCB shares to DB&G was "fair, transparent and/or indicative of the most beneficial terms and conditions which could have been derived by the GOJ ([COLOR=blue! important][COLOR=blue! important]Government[/COLOR][/COLOR] of Jamaica) given the lack of competition".
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