Last year, he highlighted, following a number of questions on the advisory fee, Government abstained from voting on the accounts.
Brassington explained that the 1990 sale agreement with ATN and the Government of Guyana stated that management services may be provided by ATN or by its subsidiaries, provided that they are approved by the Board.
“We do not consider the advisory fees to be management services, because despite inquiries, they have not been justified as representing legitimate management services; therefore we can’t conclude that any of those payments represents value for services rendered,” he contended.
He said that Government views the advisory fee, which is quite significant, as a distribution. Within the last five years, Brassington said over five billion dollars in advisory fees has been paid, averaging over a billion dollars per year.
“The company’s revenue last year exceeded $19B, and if you take 50 percent of that in the last 10 years it has been approximately $10B, and since the privatisation of GT&T over $15B in advisory fees has been paid,” Brassington stated.
“We believe that the advisory fees should be treated below the line as the distribution. They would therefore not be eligible as a deductible expense, so taxes will have to be paid on the amount and The National Industrial and Commercial Investments Limited (NICIL), as a 20 percent shareholder on behalf of Government, would be entitled to 20 percent of that,” he said.