Kamla to Minister Stuart Young: Come clean on NGC Dividends
Leader of the Opposition Kamla Persad-Bissessar, SC, MP, is accusing the Keith Rowley-led Government of misleading the population by inaccurate statements made in the Parliament regarding NGC dividends utilized by the People’s Partnership administration, compared to the PNM Government’s record.
The Opposition Leader issued the following statement:
The mantra of this Rowley led PNM since assuming power in September 2015 has been to mislead, misrepresent and misspend. They will use every tactic to deceive in order to distract and conceal their incompetence and mismanagement of the resources of our country.
I take issue with Junior “Minister of Everything” Stuart Young’s lie in Parliament that the PNM did not receive any dividends from NGC in 2015 when the record clearly shows they received $3.684 billion in four months in 2015 – more than the People’s Partnership in the previous eight months.
The Rowley Government’s statements in relation to the payment of dividends by the National Gas Company are a classic example of their manipulation, and worse, misunderstanding fundamental accounting concepts. Their web of lies about what transpired at NGC has been untangled by the facts.
The National Gas Corporation is one of the crown jewels that belong to Trinidad and Tobago. The earnings of this State Corporation belong to the people of Trinidad and Tobago and are held on trust by the government. I make no apologies for utilizing the resources of the NGC during the period 2010 -2015. The dividends that were paid to the Government during this time were spent on the people of this country so as to ensure that while the grass was growing the horse was not starving.
Those dividends were used to settle wage negotiations with public officers of every sector in our society to ensure that every one of them and their families benefited from what was earned from the resources of our country. Those dividends were used to build schools, hospitals, health centers and roads for our citizens. It was used to buy laptops for our children and to ensure that our children from toddlers to scholars were provided with a first world education system and no child was left behind. And perhaps most importantly, it was used to invest in our people through social programs providing employment, and to look after our elderly who have retired and depend upon the State to provide them with the decent standard of living. The people of our country could see between 2010 and 2015 where their money was spent.
Those same dividends, in proportionately larger sums, were also used by the PNM since assuming office in September 2015 but after two years, the population is searching to find how those funds were utilized. Where did it go and what was it spent upon? When they cannot provide the answers, the Rowley PNM seeks to attack the People’s Partnership and distract and deceive the population with their lies and untruths. They cannot match the delivery and performance of the PP Government between the years 2010-2015 and the tangible improvement in the standard of living that every citizen experienced during this time. Today, I set out the facts that untangle their web of lies.
Government hid $1.864b of 2015 NGC Income
In their quest to deceive by telling a tale about spending, this Rowley-led government deliberately concealed from the population $1.864 billion dollars received by the National Gas Corporation. If this was not deliberate, the people of Trinidad and Tobago should be even more troubled.
In the NGC statement to the PAEC JSC 2016, as well as in the NGC Consolidated Financial Statement and Annual Report, this PNM Government did not account for two major items of income received by the NGC, post the elections of 2015. Both these items of income are attributable to the People’s Partnership and would have resulted in a larger profit margin than that reported.
The first is $1.514 billion being the proceeds of the TTNGL IPO paid on 29th October 2015 pursuant to a letter of request from the Minister of Finance, and approval of the newly appointed board. This was the same IPO the current Minister of Finance condemned when in Opposition.
The second item of income not accounted for is US $500m (about TT $3.5 billion) being a payment by BP due to the failure of BP to deliver gas from 2011, pursuant to its Gas Sales Contract 2000 with NGC. Inexplicably, the new Board did not approve including this amount as income in the 2015 accounts, and it is even more disconcerting that the Board of the NGC did not bring these matters to the attention of the Parliamentary Joint Select Committee upon examination.
The government has deliberately misinformed the public by concealing these items of income that were earned by NGC.
Minister Young’s lie about NGC Dividends
Junior Minister of Everything Stuart Young attempted to play smart with foolishness in his response to my 2018 budget contribution with regard to NGC Dividends. His statements concerning the quantum of dividends paid and the applicable dividend policy of the NGC are both incorrect and deceptive. In their quest to provide legitimacy to these lies some of Young’s erroneous statements were repeated by the Minister of Finance and the Prime Minister at a public meeting on Friday 6th October 2017.
In my budget response I rebutted government’s continued incorrect statements that the People’s Partnership government had taken NGC Dividends in the sum of $16 billion over our five-year term (2010-2015). I have consistently stated that this figure is incorrect; the correct figure was $12.7 billion for the five-year period, according to official NGC financial reports.
The documentary evidence shows that in just four months, September to December 2015 the PNM government has taken $3.5 billion. This is confirmed in part by the PM’s response to a question from MP David Lee as recorded in Hansard 9 June 2017 when the PM said “NGC advises that they paid $3.3 billion in dividends[1]”.
Figures now received show that $3.684 billion in NGC dividends were actually paid pursuant to 6 direct requests from the Minister of Finance by letter, and approved by the new Board after the September 2015 election, viz. from 16 September to 29 December 2015 as follows:
Direct request from Min of Fin (letter); Approved by the new Board 2015
16 September 2015 $ 493m
29 October 2015 (IPO Proceeds) $ 1514m
25 November 2015 $ 175m
27 November 2015 $ 500m
11 December 2015 $ 501m
29 December 2015 $ 501m
$ 3.684 billion
This proves that within four months, the PNM government received $3.684 billion in dividends from NGC.
It also means that the PP government received $3.152 billion less than the total figure stated for 2015 ($6.837 billion) by the Minister of Finance, Minister Young and the PM. Instead, the dividend under the PP was $3.685 billion for all of calendar year 2015 whilst the PNM government received $3.684 billion NGC Dividends in less than four months!
Calendar Year
Minister Young has confused himself in reading the figures for dividend payouts presented for the calendar year 2015. In making his statement the Minister failed to consider the most basic fact that the Peoples Partnership government demitted office in September of 2015, thereby incorrectly ascribing the $3.684b in dividends paid during the period September to December 2015 to the PP when in fact this amount was taken by his government.
Minister Young’s references to figures presented to the JSC PAEC are the figures for calendar years, viz., 1stJanuary to 31st December. This is made clear from a perusal of the financial statements of the NGC including that for 2015 which expressly state that the figures are for a calendar year, viz., 1st January to 31st December.
Further, the figures contained in the NGC’s annual Reports and Consolidated Financial Statements published each year, including that for 2015, are identical to the figures contained in the PAEC JSC Report[2]. They are clearly figures relating to the period 1st January to 31st December 2015. That the anointed spokesperson for the Government would make such a mistake is inexcusable and indefensible, but demonstrates the extent of their incompetence. That the Minister of Finance and Prime Minister would repeat such statements is reckless and irresponsible.
Consequently, the PAEC JSC figures do not disaggregate dividend payments made prior to general elections 2015 (which would be the PP term in office) and post elections (which would be the PNM government’s term in office).
I have already outlined above that $3.684 billion in NGC dividends were actually paid pursuant to 6 direct requests from the Minister of Finance by letter and, approved by the new Board after the September 2015 election, viz. from 16th September to 29th December 2015.
This government cannot therefore use the total 2015 figures to support their erroneous claims of the quantum of dividends paid during the PP government’s time in office.
DIVIDEND POLICY
Minister Young was also wrong on his accusation that that the dividend policy of the NGC was breached. In fact, the present government used the same policy to take $3.684 billion from retained earnings, notwithstanding that after tax reported profits were as low as $605,080.00[3].
The dividend policy for State Enterprises, which includes NGC, is clearly stated in the State Enterprise Performance Monitoring Manual at p. 18[4]. This dividend policy is restated and expanded at p. 34 of a document[5] published online by the Investments Division, Ministry of Finance.
It would not be surprising that the Minister in the Office of the Prime Minister, the Minister of Finance and the Honourable Prime Minister himself are not aware of the policy of the State Enterprises.
The dividends paid by NGC under the PP government were in keeping with the dividend policy laid out in State Enterprises Performance Monitoring Manual (p. 18 and at p. 34 in the 2017 document). The manual provides for dividends to be paid from distributable profits and from retained earnings.
Indeed, as the NGC Annual Report 2015 as well as the Consolidated Financial Statements 2015 show, all dividends for calendar year 2015 were paid from retained earnings[6] (i.e. both the amounts paid from January to September 2015 (PP Government) as well as from September to December 2015 (PNM Government).
This Government must be made to account
The issue of the payment of dividends from the National Gas Corporation is one of national interest. This Government must account to the people of our country for the monies that have been utilized by dividends from NGC that have been withdrawn during the past two years. Those funds belong to the people of this country and the citizens have a right to know where their monies were spent and how it was spent.
This Rowley regime cannot continue to deceive by manipulating facts and figures to seek to distract from their two years of abject incompetence. The population can see and experience what was done with the NGC dividends during my administration’s term in office. The Prime Minister and the Minister of Finance together with Minister Young must account for what they did with the monies that they have taken from the NGC. They cannot hide any longer and that must be made to account.
—-END—-
[2] See NGC Annual Report and in particular p. 36 at http://ngc.co.tt/wp-content/uploads/pdf/annual-reports/NGC-Annual-Report-2015.pdf
And NGC Consolidated Financial statements, in particular p. 3 at http://ngc.co.tt/wp-content/uploads/2013/05/2016-06-22_summary-consolidated-financial-statements_2015.pdf
[3] See NGC Annual Report and in particular p. 36 at http://ngc.co.tt/wp-content/uploads/pdf/annual-reports/NGC-Annual-Report-2015.pdf
And NGC Consolidated Financial statements, in particular p. 3 at http://ngc.co.tt/wp-content/uploads/2013/05/2016-06-22_summary-consolidated-financial-statements_2015.pdf
[4] See http://www.finance.gov.tt/wp-content/uploads/2013/11/State-Enterprise-Performance-Monitoring-Manual-2011.pdf DIVIDEND POLICY
GORTT has agreed that the profitability of the Enterprise, its liquidity, legal restrictions/loan covenants and the replacement cost of essential capital goods are considered in determining the quantum of dividends that a Company would be required to pay. State Enterprises are also required to pay interim dividends based on semi-annual financial results. Actual distributions of profit are to be agreed with the Minister of Finance and appropriately disclosed in the financial statements. State Enterprises with Retained Earnings in excess of Working Capital requirements may be required to pay a Special Dividend.
[5] See http://www.finance.gov.tt/wp-content/uploads/2017/01/Compliance-State-Enterprise-Performance-Monitoring-Manual.pdf
All profitable State enterprises are required to pay dividends up to 100% of distributable profits; The profitability of the Enterprise, its liquidity, legal restrictions/loan covenants and the replacement cost of essential capital goods are to be considered in determining the quantum of dividends that a Company would be required to pay; u State Enterprises are also required to pay interim dividends based on semi-annual financial results; u Actual distributions of profits are to be agreed with the Minister of Finance and appropriately disclosed in the financial statements; State Enterprises with Retained Earnings in excess of Working Capital requirements may be required to pay a Special Dividend.
[6] NGC Annual Report and in particular p. 36 at http://ngc.co.tt/wp-content/uploads/pdf/annual-reports/NGC-Annual-Report-2015.pdf
And NGC Consolidated Financial statements, in particular p. 3 at http://ngc.co.tt/wp-content/uploads/2013/05/2016-06-22_summary-consolidated-financial-statements_2015.pdf