…as VP signals reforms
Legislative changes that will better protect shareholders in public companies, could be on the horizon. This is according to Vice President Bharrat Jagdeo, who gave this assurance in the wake of concerns recently raised by a Private Sector Commission (PSC) official regarding publicly traded companies.
During a recent press conference, Jagdeo spoke about public companies which usually have shareholders that range in size from small to large. The Vice President acknowledged that there are cases where small shareholders do end up receiving the short end of the stick, for instance when a company does not declare a profit or even liquidates.
“I saw a big debate. There are some things… we have to start looking at public companies and how we protect small shareholders rights. Either through tougher provisions in the Companies Act or through the Securities Council. And I’m just throwing that out there today…sometimes small shareholders in public companies are being ripped off by unscrupulous management,” Jagdeo said.
During an Anti-Corruption Workshop that was held last week Tuesday, Chairman of the Private Sector Commission’s Economics and Finance Committee, Ramesh Dookhoo spoke about publicly traded companies and the problems they encounter.
“I believe there’s a lot of subjectivity being applied by regulators, in the application of laws. On the other hand, some categories of businesses seem to be over regulated. If you take public companies for example, we have moved from a 10-page annual report, to what is now a report that is 50 pages.”
“Because of disclosure regulations, whereas a private company doesn’t have those requirements. And we may need to focus, as we move forward, on private companies. A private company is described as a company with less than 50 shareholders in Guyana. Perhaps even that has to be revised,” Dookhoo further explained.
Dookhoo had noted that there have been instances where private companies have encroached into the pensions of employees. However, he noted the need for more clarity on what private and public companies are allowed to do.
Reviewing
During that event on Tuesday, Parliamentary Affairs and Governance Minister, Gail Teixeira had revealed that the Attorney General Chambers (AGC) is currently reviewing the Companies Act, with the aim of making improvements to sections of the Act that would fill gaps in the law and clear up ambiguities.
“I’m aware the Attorney General Chambers are working on the Companies Act. And that came out of a recommendation of an earlier workshop we had, in 2022, with the Private Sector, Government and civil society,” Teixeira had said.
There has also been talks of the upgrading the Guyana Stock Exchange (GSE), which is where shares of companies are sold. Following calls from the local Private Sector and other stakeholders, the Guyana Government had announced earlier this year that it would be embarking on a review of the legal framework governing the local stock exchange market with the aim of refashioning the system to meet a more competitive financial environment.
The Georgetown Chamber of Commerce and Industry (GCCI) had previously called for an overhaul of the Guyana Stock Exchange, after highlighting the negatives of current operations and its effect on the business community.
With access to financing being a leading hurdle for many businesses in Guyana, GCCI had said, GSE has a significant role to play in facilitating a transparent and efficient marketplace for companies to raise capital, invest, and grow.
In a statement, the Chamber noted the lack of necessary infrastructure, technological advancements, and regulatory framework at the GSE, which compromises the financial health of businesses, restrict their ability to attract investment, and ultimately hamper their growth potential.
A stock market allows owners of stocks and shares to dispose of them at fair prices. It allows new investors to buy them at fair prices, and it allows companies to sell new shares to finance the growth of their businesses.
The Guyana Association of Securities Companies and intermediaries (GASCI) is the local Stock Exchange that organises and supervises the stock market in Guyana. Among the public companies with the stock exchange market are Banks DIH, Caribbean Containers, Citizen’s Bank, Demerara Bank, Demerara Distillers Ltd (DDL), Demerara Tobacco Company, Guyana Bank for Trade and Industry (GBTI), Sterling Products Limited, and a few others. (G3)
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