Ocean View Hotel owes GNCB over $1B 

…Granger govt was advised to acquire building than pay lease 

WITH the Ocean View Hotel owing the Guyana National Cooperative Bank (GNCB) in excess of $1, 069,425,886, Hughes, Field & Stoby Law Firm had advised the David Granger Administration that it was better to purchase the property from the Receiver Courtney Perry as against leasing it; while ruling out any transaction with the sole shareholder and Director of the Hotel, Winston Rambaran.

In wake of the global coronavirus (COVID-19) pandemic, the A Partnership for National Unity + Alliance For Change (APNU+AFC) Government had taken a decision to convert the building to a COVID-19 Hospital in accordance with the Presidential Directions gazetted On March 16, 2020. The building was refurbished at the cost of approximately $1.6B.

However, days after the People’s Progressive Party/Civic (PPP/C) took office, Rambaran wrote the new Attorney General and Minister of Legal Affairs, Anil Nandlall, claiming millions of dollars owed in rent. According to him, the Public Health Ministry had agreed to pay a rental of $13M monthly for a period of one year. But in a letter dated April 2020 to the then Attorney General and Minister of Legal Affairs, Basil Williams, the Law Firm had indicated that it was not for the State to enter an agreement with Rambaran but rather the Receiver for the sale or lease of the Hotel located at Scandal Point, Liliendaal, Greater Georgetown.

“…Whether it is a sale or a lease, it must be conducted with the Receiver. He is the sole person authorised by law to deal with the assets of the Ocean View Hotel Limited,” the Law Firm had advised, noting that it was possible for the State to compulsorily acquire the Hotel in accordance with the provisions of the Acquisition of Lands for Public Purposes Act.

It was explained that Rambaran had incurred a debt of approximately $1.069B based on loans acquired firstly by the Guyana Co-operative Agricultural and Industrial Development Bank and then its successor GNCB. It was noted that on May 29, 2009, GNCB had appointed Perry as a Receiver with the view of having him take over the management of the Hotel and sale of it to recover the debt.

Though Rambaran had initiated civil proceedings in the High Court to reverse GNCB’s decision, the Court ruled that the appointment of the Receiver was lawful, proper and effective. “It was further ordered by the Court that the Receiver recover the sum of $223,800,000 against the Ocean View Hotel, together with interest thereon at 17.5% per annum from the said 10th day of March 2016, until fully paid,” the firm informed the State. It was noted that Rambaran had moved to the Court of Appeal but to date, the appeal has not been heard.

“The issue therefore would be whether it is more financially advantageous for the State to lease for a maximum of $156M or to pay a possible $620.8M for an outright sale of the Hotel. One factor that may operate in favour of a sale is that the State would be the owner of a valuable asset, while with a lease option, at the end of the term, the asset remains the property of the Ocean View Hotel Limited,” the Legal Firm had advised.

It had emphasised that whether sale or lease, the transaction must be conducted with the Receiver – the sole person authorized by law to deal with the assets of the Hotel.

It is important to note that at the time the advice was tendered, the then Minister of Public Health Volda Lawrence had already commenced the renovation and refitting of the Ocean View Hotel.