92 Middle St . North Cummingsburg . Georgetown . Guyana . South America

Tel (592) 226 6251/ 7873/ 8384. Fax (592) 226 6245. Email office@gticl.com

 

History | Services | Financial Statistics | Where we are Today | Contacts

Last updated 27th February 2008

History: Globe Trust And Investment Company Limited was incorporated as a Company under the Laws of Guyana - The Companies Act, Chapter 89:01 on October 11th, 1990. The Registrar of Joint Stock Companies assigned #2711 to the Company.

When the Companies Act, Act #29 of 1991 became law in 1995, Globe Trust, as was required, continued under Section 339 of the Act on March 22nd, 1996.

When the Financial Institutions Act, 1995 (FIA) was signed into Law by the Honourable Minister of Finance, Globe Trust as a Financial Institution was obligated to apply to the Bank of Guyana (Central Bank) in order to carry on its operations. On June 3rd, 1999, the Central Bank granted a licence to Globe Trust under Section 6 of the FIA to conduct in Guyana depository financial business with authority to engage in trust business. This licence remains in force unto today.

Globe Trust opened its doors to the public in April 1991, and after its initial period of operations, recorded profits from December 31st, 1992 until December 31st, 1999. In year 2000, the problems associated with its non-compliance with the terms of the FIA, especially those pertaining to non-performing loans began to take effect.

After a series of inspections by the Central Bank and consultations with the Directors, the Central Bank, under Section 42 and 43 of the FIA, took immediate possession of Globe Trust on September 21st, 2001.

Prior to the Central Bank’s action, the Company had closed its doors to the public on July 17th, 2001.

On 27th November 2001, the Central Bank instituted legal action as is required under the FIA to have the Company liquidated. On July 25th, 2002, the Honourable Chief Justice ordered the re-organisation of Globe Trust under the Bank of Guyana as set out in Section 50 of the FIA.

In December 2002, the Bank of Guyana appointed an Administrator charged with the responsibility of managing the day-to-day affairs of the Company and preparing a re-organisation plan to return the Company to profitability.

Services Offered: Prior to July 2001, Globe Trust offered the following services:

a) Trust Services

  • Administration of Pension Plans
  • Children Educational Trust Funds
  • Personal Trust Funds
  • Administration of Estates
  • Trusteeship for Thrift and other Plans
  • Property Management for Landlords
  • Registrar and Transfer Agents for Stocks and Shares

b) Financial Services

  • Remittance of funds locally and overseas
  • Travellers Cheques
  • Cambio Services, including the exchange of Foreign Currency
  • Trade Financing
  • Letters of Credit and Bonds
  • Savings Accounts
  • Super Savings Accounts
  • Certificates of Deposits (Short & Long Term)
  • Commercial and Personal Loans and Advances

However, since September 2001, the Company has only been offering (a) its usual range of Trust Services and (b) the acceptance of loan repayments.

Financial Statistics (All Figures in G$Millions)

YEAR

TOTAL ASSETS

TOTAL LIABILITIES

PROFIT/(LOSS) BEFORE TAXES

2005

221.1

802.4

(32.8)

2004

239.1

795.2

(10.0)

2003

251.2

801.4

0.21

2002

245.5

795.7

(105.8)

2001

323.5

771.4

(505.4)

2000

932.9

875.5

(267.9)

1999

1,022.2

714.3

30.7

1998

898.4

718.1

21

1997

779.9

640.7

22

1996

613.6

541.0

13.4

1995

458.1

416

8.5

1994

419.5

388.3

11.3

1993

325.0

299.9

11.0

Where we are today

A.

Below is a press release by the Administrator on December 28th 2007

ADDRESS OF THE ADMINISTRATOR TO MEDIA

FRIDAY DEC. 28th 2007

Salutation

I wish to thank you for attending today’s briefing.

Reason for Meeting

The purpose of calling you here today is to provide you with an update of the status of the re-organisation as at today’s date and to advise on the possible future with regard to the company.

Since assuming the position of Administrator, I have always endeavoured to keep the stakeholders of Globe Trust and the general public a-breast of all developments through the media and through the web-site, which was established specifically for keeping in touch with the overseas stakeholders.

After my presentation, I will be pleased to respond to as many questions and queries as I can. And I urge you to take this opportunity to seek as much clarification as you require.

Duties / Responsibilities of the Administrator

It may be useful, at this point to state the duties and responsibilities of the Administrator as outlined under the FIA and the Terms of Reference of my Contract with the Bank of Guyana. These are fourfold.

First, to hold the Company together by managing its day to day operations in such a manner as to ensure some degree of financial stability. Implicit in those actions is the identification of an Investor and those internal matters that needed to be addressed to keep Globe Trust together so that there would be some thing to offer for investment.

My second responsibility is to assess the financial status of the Company and identify an investor or investors who was/were ready and willing to invest in the Company.

My third major responsibility is to prepare a re-organisation plan which when enacted will return Globe Trust to profitability over time.

My fourth responsibility is to implement the approved Plan to reorganise the Company.

My task as Administrator concludes either

(a) when my contract with the Bank of Guyana expires and I may mention that my contract was extended by the Bank of Guyana a few times over the period under discussion or

(b) when a liquidator is appointed by the court after application for same by the Bank of Guyana or

(c) when the Company is handed over to the “new” Board of Directors: whichever is earlier.

Back- ground

I know that most of you are familiar with the history of this company but allow me to just remind you of a few of the pertinent details of that history.

You will recall that after a series of inspections by the Bank of Guyana (BOG) and consultations with the Directors, the BOG, under Sections 42 and 43 of the FIA, took immediate possession of Globe Trust on September 21, 2001.

Prior to the BOG’s action, the Company had closed its doors to the public on July 17, 2001.

On November 27, 2001, the Central Bank instituted legal action as is required under the FIA to have the Company liquidated.

On July 25, 2002, the Honorable Chief Justice ordered the re-organization of Globe Trust under the Bank of Guyana as set out in Section 50 of the FIA.

In December 2002, the Bank of Guyana appointed an Administrator.

Thereafter followed, a series of advertisements in the local, regional and overseas press, audits, the updating of the financials and other such duties.

There were 93 persons or companies who expressed an interest. Of them, only 6 could be described as seriously interested. Three (3) were prior to 2006 and Three (3) were in 2007.

In prior releases I had updated you on the status of the 3 which had expressed an interest prior to 2007.

As a result a re- organisation plan was filed with the courts on Nov 24th 2006. This was after months of negotiation and compromise. The plan was a product of mutual agreement on both the side of the Administrator and the side of the investor. The Hon. Chief Justice approved the plan on Feb 7th 2007.

At the time of the filing of the plan, Hywhey Investments Inc. (HII) had been the investor identified in the plan. Unfortunately, HII seemed to have had problems in securing the necessary funding and as such our relationship was terminated in July 2007.

LEGAL PROCESS

In all my discussions so far with the stake holders and the public I have always reiterated the need to fully understand the legal process that would guide the move forward. I had mentioned then that the re- organisation of Globe Trust rests on what I referred to then as 3 basic pillars. I will take this opportunity to repeat those pillars.

The first pillar is the approval process which has been successfully completed. The 1st pillar involved 

-          the shareholders, who have not objected in the time frame allotted to them to do so

-          the Court, who has approved the plan  and

-          the depositors who had not refused the plan..

The second pillar is of course the injection of funds into the company by the investor. It was at this pillar that HII fell. Although it should be noted that the funds were not yet required, and were not required by the Administrator until the exchange of shares for cash was ready to take place.

The third pillar is of course, the approval of the investor by the Bank of Guyana in accordance with the Financial Institutions Act. The Bank of Guyana has to approve, not the Plan, but the investor: Section 9 (1) of the FIA states that

“No person may without the prior written approval of the Bank (BOG) acquire control of any licensed financial Institution.”

CURRENT STATUS

Immediately, upon the information regarding the failure of HII to provide the necessary funding being made public, 3 other potential investors made themselves known through their Guyanese representatives. For the sake of confidentiality, I will refer to each by his geographic location. There were the Europeans, the North Americans and the South Americans.

The Bank of Guyana had been advised in July 2007 of at least one of these investors, the rest were mentioned in late October. The Bank of Guyana responded on Nov 5 2007 advising that there should be closure of the re-organisation process i.e. the submission of the Application to Acquire Control and the modification of the approved Reorganisation plan by November 30th 2007.

A)      The Europeans: advised on Nov 29th that because of the complexities of the transaction they had decided not to take it further.

B)      The North Americans: Their representative had made an initial visit to Guyana after which, a team of 3 experts returned and performed a due diligence exercise. An Application was made to the Bank of Guyana, but on Dec 17th 2007, the Investor withdrew stating as follows:

“Unfortunately, the current licensing regime of Globe Trust does not provide us with sufficient scope to participate effectively in the banking sector in Guyana . In our opinion, the restrictive nature of the license would impair our ability to be competitive and profitable; and introduce new products and technology.

In as much as we recognize your position that it would not be prudent for the Bank to consider a change in the current categorization of Globe Trust at the present time, we believe that a full banking license is necessary to bring the institution to viability in the shortest possible time in accordance with our vision and strategic interests.”

C) The South Americans: They were unable to make the Nov 30th deadline mainly because of travel duties but came to Guyana in early December and because of travel duties again and the upcoming holidays promised to return soon after Jan 5th with a team to verify if the quantum of investment was sufficient. This investor was also interested in investing in other sectors. On behalf of this investor the Administrator sought an extension of the Nov 30th dead line after initially not granting this extension, the Bank of Guyana has had a change of heart and has extended the deadline to January 24, 2008.  

I wish therefore to take this opportunity to thank all the stake holders of GTICL for their patience and understanding, the remaining GTICL staff for their devotion, the Bank of Guyana for the security and other services which they have provided to Globe Trust and to GTICL’s Attorneys for their stalwart efforts and wish all of the stakeholders a fruitful 2008.

FIA Sec 51 reads as follows:

When depositors and other creditors refuse a reorganisation plan under Sec. 50 (4),or when in the course of reorganisation it appears to the Bank  or the person appointed under section 35 that the circumstances render the plan in-equitable,  or changes in the its execution desirable, the Bank may apply to the Court to 

(a)     modify the plan: or

(b)     order compulsory liquidation of the licensed financial institution and the appointment of the bank as liquidator

Recap of Plan

o         Investment

·          An immediate injection of Three million, five hundred thousand US dollars (US$3.5M).

·          One million, five hundred thousand US dollars (US$1.5M) for infra-structural works if necessary.

o         Deposits

·          Re-adjust deposits to their July 2001 value

·          Activate and make available all deposits fifty thousand dollars ($50,000) and under

·          25% of July 2001 value to be converted to equity

·          Activate all deposits over a period of 6-36 months @ 15, 20, 25, 40%

o         Credit

·          Write off unrecoverable loans

·          Maintain Debt Recovery as a section of the Credit function

·          Concentrate on new areas of lending

·          Build an active portfolio

·          Endeavour to terminate all known arrangements giving rise to Contingent Liabilities, if deemed necessary

o         Shareholders

·          Stated capital reduced then increased to accommodate investment and transfer from deposits. (already Done)

FUTURE

Should liquidation become a reality then Sec 55 (10) lists the order of priority of payments

FIA Sec 55 (1) states

In any compulsory liquidation of a licensed financial Institution there shall be paid by the Bank or person appointed under Sec 35 to act as liquidator, in priority to all other unsecured debts, in the following order

(a)     necessary and reasonable expenses incurred by the Bank or person appointed under Sec 35 in application of the provisions of this part;

(b)     unpaid claims for taxes due, whether payable to the Government or to any local governmental authority

(c)      Wages or salaries of officers and employees of the institution for the three month period preceding the effective date of seizure

(d)     Fees, costs and assessments due to the Bank

(e)     Deposits up to an amount not exceeding one hundred thousand dollars to any depositor

(f)      Deposits of nationals and residents of Guyana in excess of one hundred thousand dollars and

(g)     Other deposits


B.

ADDRESS OF THE ADMINISTRATOR TO MEDIA

WEDNESDAY, FEB. 27TH 2008

Salutation
I wish to thank you for attending today’s briefing.

Reason for Meeting
The purpose of our meeting here today is to update you on of the status of the re-organisation and more specifically my role in that re-organisation and to thank you in advance for your assistance in disseminating this relevant information to the depositors, shareholders and other stakeholders.


Duties / Responsibilities of the Administrator
In my briefing of December 28th, I had outlined the history of GTICL and my role as Administrator- for the sake of expediency; I have circulated copies of that briefing and as such will not repeat what I had said before.


It is important to note from what I had said in December that among the reasons for the conclusion of my task as Administrator was (a) when my contract with the Bank of Guyana expires and I had mentioned that my contract over the period as Administrator was extended by the Bank of Guyana a number of times.

My contract with the Bank of Guyana expires on Friday Feb 29th 2008 and as such my task as Administrator comes to an end at that time.

LEGAL PROCESS
In my last briefing I outlined the legal process to be followed. I had mentioned then that the re- organisation of Globe Trust rested on what I referred to then as 3 basic pillars. You will recall those 3 pillars as:

The Approval process which has been successfully completed.

- the shareholders, who have not objected in the time frame allotted to them to do so
- the Court, who has approved the plan and
- the depositors who had not refused the plan..

The 1st pillar involved The second pillar is of course the injection of funds into the company by the investor. Although it was noted that the funds were not required by the Administrator until the exchange of shares for cash was ready to take place.

The third pillar is of course, the approval of the investor by the Bank of Guyana in accordance with the Financial Institutions Act. The Bank of Guyana has to approve, not the Plan, but the investor: Section 9 (1) of the FIA states that

 “No person may without the prior written approval of the Bank (BOG) acquire control of any licensed financial Institution.”

CURRENT STATUS
In December I had advised that after terminating the relations with Hywhey Investments Inc, 3 other potential investors made themselves known through their Guyanese representatives. For the sake of confidentiality, I had referred to these investors by their geographic location and had stated that the North Americans and the Europeans had decided not to take the transaction further, but that the South Americans had definitely expressed an interest

I need to pause here and advise that I never stated the nationality of the investor from South America, yet still I had received calls referring to an investor from Columbia. I know of no such investor.

.In December, I had advised that the South American Investor had requested an extension of the deadline for the submission of the Application to Acquire Control of a Financial Inst. from the Bank of Guyana to Feb 15th 2008. This extension was approved.

However, on Feb 7th 2008, by email, I reminded this investor that the deadline was Feb 15th for the submission of the necessary application to the Bank of Guyana. He responded, also by email advising that his banking consultant traveling from NY to his country had suffered some mishaps along the way and that he would advise arrival dates later.

Last Friday Feb 22nd he called and on Monday Feb. 25th confirmed that call by letter requesting a further extension as he expected that his banking consultant would be in a position to travel before the first 2 weeks in March. Since the Administrator has no authority to authorize or refuse his request, his request has been forwarded to the Bank of Guyana for response.

NEXT STEPS
The next step will depend upon the answer to that investor’s request. If the extension is granted, adhered to by the Investor and further agreement is found then the Administrator will see the transaction through – which will include an application to the courts to modify the existing approved plan under section 51 of the FIA.

If this and on further extensions are not granted then the Bank of Guyana will need to apply to the Court again under section 51 of the FIA to have a Liquidator appointed.

Liquidation will then follow its usual course.

Attached is a copy of section 51 of the FIA and the list of priority payments to be made under the FIA.

Conclusion
In conclusion I would like to take this opportunity to thank the Bank of Guyana, The remaining Staff of GTICL, Stakeholders of GTICL, the attorneys especially Mr. Stephen Fraser and Fraser & Housty and the auditors – Deloitte & touché and the many others for their assistance during my term as Administrator.

QUESTIONS & ANSWERS
I had some questions asked of me earlier which I will now attempt to answer. Later I will take any others

Q: When does your contract with the Bank of Guyana Expire? And who will take over as Administrator and Liquidator?

A: My contract expires on Feb. 29th 2007. Nizam Ali & Co. has been selected to be the next Administrator.

Q; You earlier stated that your contract dates were extended in the past. What influenced those extensions?

A: My contract was extended in order to facilitate the re-organisation. Remember that many of the steps along the way were basically outside of the control of the Administrator.

Q: During your tenure many individuals thought that you may have sought legal re-dress against at least one organisation and maybe the former Management and Directors of GTICL. Why didn’t you?

A: I have answered that question on many occasions. I did not believe and I still do not believe that taking that organisation and those individuals to court would have helped with the re-organisation. No Investor would have wanted to become involved in a company which was engaged in that type of litigation. Besides also, if the re-organisation plan promised a full or partial repayment to the depositors, what amounts were you to sue for?

I should mention that that option may still be open to the Liquidator if he so desires.

Q: Seeing that you have been heavily involved in the negotiations, the preparation, filing and approval of the re-Organisation Plan do you think that your exit at this stage will negatively influence any further negotiations with this or any other potential investor?

A: It should not. There should be a hand – over process which will fully brief the next Administrator and the investment from the Investor’s point of view is an economic one not a based on personalities.

Q; If GTICL moves to liquidation, what is the priority of payments?

A: As set out in the FIA

Q: What was it like being Administrator of GTICL

A: It was history in the making and I appreciated the opportunity to be part of it. With my experience, training and competitive nature I looked forward to Globe Trust rising from the dust. I still think that GTICL is a reasonable investment in the longer term.

On the other hand, it was difficult dealing with the fact that depositors who could ill afford it may loose their life-savings. At times it was an emotional see-saw.

There have been some changes in the Financial sector but more needs to be done. It also emphasizes the need for deposit insurance.

Q: Any other questions?

(1) FIA Sec 51 reads as follows:

When depositors and other creditors refuse a reorganisation plan
under Sec. 50 (4),

or when in the course of reorganisation it appears to the Bank
or the person appointed under section 35

that the circumstances render the plan in-equitable,
or changes in the its execution desirable,

the Bank may apply to the Court to


(a) modify the plan: or

(b) order compulsory liquidation of the licensed financial institution and the appointment of the bank as liquidator

(2) Should liquidation become a reality then Sec 55 (10) lists the order of priority of payments

FIA Sec 55 (1) states

In any compulsory liquidation of a licensed financial Institution there shall be paid by the Bank or person appointed under Sec 35 to act as liquidator, in priority to all other unsecured debts, in the following order
(a) necessary and reasonable expenses incurred by the Bank or person appointed under Sec 35 in application of the provisions of this part;

(b) unpaid claims for taxes due, whether payable to the Government or to any local governmental authority

(c) Wages or salaries of officers and employees of the institution for the three month period preceding the effective date of seizure

(d) Fees, costs and assessments due to the Bank

(e) Deposits up to an amount not exceeding one hundred thousand dollars to any depositor

(f) Deposits of nationals and residents of Guyana in excess of one hundred thousand dollars and

(g) Other deposits

Contacts

Should you have any queries, contact us at:

 Postal Address: 92 Middle St . North Cummingsburg, Georgetown, Guyana
Telephone Nos: 592-226-7873, 592-225-4586, 592-226-8359, 592-226-6251
E-mail: office@gticl.com

The Administrator may be contacted at the above and also at:

 Telephone No. 592-225-6867
E-mail: administrator@gticl.com

The Administrator can be contacted at the above mailing or e-mail address.
This website will be updated bi-monthly.

  

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