Fired Managing Director of the state-owned, Guyana Oil Company (Guyoil), Badrie Persaud has responded to the findings of the forensic audit which was used to terminate his services earlier in March 2016. Persaud said the claims of irregularities at Guyoil which were included in the audit report, are merely lies and distortions. And he has defended his decision to hire a number of relatives for contracts.
Persaud was the Managing Director at Guyoil from July, 2006 to February, 2016. The audit covered the period November 1, 2011 to May 31, 2015 and reported that “undisclosed and ignored” conflict of interests occurred for the period under review, whereby Mr. Persaud awarded transportation contracts of $62 Million to his brother, Indarjeet Persaud.
The report also pointed out in the findings that Mr. Persaud also awarded construction contract for $860,000 to his nephew, Avinash Persaud. In a lengthy statement on Wednesday Persaud said he was interested in presenting his facts for the benefit of the public and also to clear up the “lies and distortions” published in the media.
In a statement issued this afternoon, Persaud complained that while several managers of the company were interviewed by the auditors, he was not interviewed. “Upon completion of the audit in February, 2016 I requested a copy of the audit and my right to be interviewed on the findings. This was denied,” he added.
Addressing the issue of conflict of interest, Persaud explained that managers were asked to seek quotations from contractors to execute the work to be done but argued that because the contract was not a large one, contractors were not inclined to take it on.
“One contractor responded with a price of $4.5M. This was considered very unreasonable. At about the same time Avinash [His nephew] was mobilizing his equipment in Georgetown to go to the Linden Highway and I told him about the work we had at the terminal. He was asked to make contact with the terminal manager, visit the site and submit his price for the work. His price was $860,000. So management had two prices – $4.5M vs $860,000.”
Persaud believes the auditor was intent on focusing on the contractor being a relative of the Managing Director rather than the cost saving of $3,640,000 to the company.
“For the ten years I have been the Managing Director of Guyoil the paramountcy of the interest of the company was always observed,” he added.
Persaud also offered an explanation for the transportation contract of $62M offered to his brother IndarjeetPersaud, claiming again that it resulted in savings for the fuel company.
“During the years of high oil prices on the world market Guyoil was selling fuel at very thin margins and sometimes at a loss, all because the government policy was to keep the price at the pump below $1000.00 per gallon.
Given this scenario management decided to review all the cost centres in the company’s operations and seek ways and means to reduce same. Operating the company’s Road Tank Wagons (RTW) stood out as a high cost centre. The unit cost to the company to truck one litre of fuel from the Providence terminal to Georgetown was calculated.
This was below $2.00/L. Most contractors offered a price of $2.00/L and above. The price offered by Indarjeet Persaud was $1.11/L, significantly below the company’s unit cost.”
He said some of the major achievements at the company during his term as the Managing Director were increased saes revenue from $20B to over $40B, sales volume increased from 864,362 barrels to 1,242,158 barrels, net profit after tax increased from about $800M and peaked at $1.4B and daily bank balance increased from $0.5B to $7.0B among others.