Home' Trinidad and Tobago Guardian : October 31st 2013 Contents OCTOBER 2013 • WEEK FIVE www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
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On Monday, the local Court of
Appeal ordered that the ruling of
retired high court judge Carlton
Best on whether TSTT is a public
company be set aside.
This week s judgment determined that TSTT
was not subject to the Freedom of Information
because, in effect, the Court of Appeal s judgment
in June this year, had established as precedent
that TSTT was not a state enterprise.
In this week s ruling, the Court of Appeal,
comprising Gregory Smith, Nolan Bereaux and
Peter Jamadar, confirmed the determination in
June that TSTT was not a state enterprise by
virtue of the fact that the State s shares in the
telecommunications provider have been held by
National Enterprises Ltd (NEL) for more than a
The June 27 judgment by the Court of Appeal,
which was delivered by Justice of Appeal Smith,
argued that if TSTT s shareholding were subjected
to a legal test, it would be determined that NEL,
and not the Government, controlled TSTT.
Arguing for the appellants, Avory Sinanan
(SC), who took over this case from Anand Ram-
logan, this country s current Attorney General,
is reported to have told the court that while the
appellants did not agree with Justice Smith s rul-
ing, they nonetheless could not resist the appeal
filed by TSTT.
I have argued previously, in a commentary in
this space on July 4 headlined, "Is Appeal Court
wrong to redefine state enterprises", that the
Court of Appeal erred in determining that TSTT
is not a state enterprise for the purpose of the
Integrity in Public Life Act (IPLA).
It seems clear, therefore, that for the purposes
of the law, TSTT is no longer a state enterprise.
Justice of Appeal Smith s decision means that,
for all intent and purposes, TSTT is no longer
subject to policy directions from the Minister of
Public Utilities, no matter how compelling those
might be, if the board determines that said direc-
tion is not in the financial interest of the company.
The judgment means, it seems to me, that
TSTT is no longer obliged to submit its accounts
to the Comptroller of Accounts.
And it is no longer subject to the oversight of
the Public Accounts (Enterprises) Committee.
It also means that the telecommunications
provider can ignore requests by the Ministry of
Finance that any transaction approved by the
board should be subjected to an audit conducted
by the Central Audit Committee of the Ministry
And, finally, it means that the chairman of
TSTT, Everard Snaggs, cannot be summarily dis-
missed byMinister of Finance, Larry Howai, in
the way that chairman of National Quarries (NQ),
Mitra Ramkhelawan, was fired last week.
Before June s Court of Appeal judgment, the
Integrity Commission required the members of
the boards of all statutory bodies and state enter-
prises, including those bodies in which the State
has a controlling interest, to file annual decla-
rations of income, assets and liabilities with the
The original Integrity in Public Life Act was
passed by the Senate on October 3, 2000. That
Act includes "members of the boards of statutory
bodies and state enterprises as prescribed in
accordance with Section 138 (2) of the Consti-
tution" among those who must file with the
Section 138 (2) of the Constitution states that
the Commission "shall be charged with the duty
of receiving, from time to time, declarations in
writing of the assets, liabilities and income of...
members of the boards of all statutory bodies,
On October 13, 2000, the House of Repre-
sentatives passed an amendment to the Integrity
in Public Life Act (IPLA) which, among other
things, clarified that the directors of the statutory
boards and state enterprises who are obliged to
file returns with the Commission include "those
bodies in which the State has a controlling inter-
It is significant that the Parliament sought to
clarify, almost immediately after the original pas-
sage of the IPLA, that among those who must
file returns with the Commission are "members
of the boards of all statutory bodies and state
enterprises, including those bodies in which the
State has a controlling interest."
The significance of Parliament taking action
ten days after the original passage of the IPLA
to clarify, among other things, those people who
are required to file returns with the Commission
should be viewed in the context of the fact that
NEL was incorporated in August 1999, 14 months
before the IPLA, "to consolidate the Government s
shareholding in select state enterprises...."
Now, I do not now about you, but the meaning
of the words "including those bodies in which
the State has a controlling interest," is pellucidly
clear and unambiguous to me.
One does not need to be a lawyer (or a judge)
to interpret those words to mean that Parliament
wanted to ensure the directors of state enterprises
in which the State had a 51 per cent stake (which
constitutes a controlling interest) would be includ-
ed among those filing returns with the Com-
And it is very clear to me that the State has
a "controlling interest" in TSTT.
The controlling interest of the State in TSTT
is a function of the fact that 51 per cent of the
telecommunications company s shares are held
by NEL. NEL, therefore, has a controlling interest
in TSTT. The State, however, has a controlling
interest in NEL, by virtue of the fact that the
Corporation Sole owns 66 per cent of NEL s
issued shares and 100 per cent state-owned
National Gas Company, owns 17 per cent of
NEL s issued shares.
TSTT state owned
I would submit that the only possible inter-
pretation of TSTT s ownership is that the State
has an 83 per cent controlling interest in the
company, NEL, that holds a controlling interest
The July 2011 State Enterprises Performance
Monitoring Manual, in its appendix, provides a
list of all of T&T s state enterprises.
That list includes 44 companies that are wholly
owned by the State, seven companies that are
majority owned by the State (including NEL),
three companies that are defined as state enter-
prises, although the State owns less than 50 per
cent and 26 companies (including TSTT) in which
the State s control is defined as "indirect."
Therefore, it seems obvious to me that of the
80 companies defined by the manual as being
state enterprises, the only ones in which the State
cannot be said to have a clear controlling interest
are the three companies in which the State has
a minority interest (which is less than 50 per
cent of the issued shares of the company).
Those companies are T&T Mortgage Finance
(the State holds a 49 per cent stake), DFL
Caribbean Holdings (the State owns 28.1 per
cent) and Metal Industries Company (in which
the State owns 46.7 per cent).
Looking at the ownership of TSTT in this way,
I have discovered, is described by lawyers as
applying a literal or ordinary interpretation to
the phrase "controlling interest."
In deciding that TSTT was not a state enterprise
for the purposes of the IPLA, Justice of Appeal
Gregory Smith, who wrote the judgement in the
interpretation case brought by TSTT, agreed with
the contention of the Commission that the literal
interpretation of the phrase "controlling interest"
was "too wide."
According to the Smith judgment, which found
favour with Chief Justice Ivor Archie and Justice
of Appeal Allan Mendonca: "The Commission
contends that this literal interpretation of the
phrase in the Integrity Act is too wide. It would
extend the reach of the Commission far beyond
its intended purpose and reign in hundreds of
people who really should not be subject to the
Act. This, in turn, will make the functioning of
the Commission impossible."
It is factually incorrect to argue that a literal
interpretation of the words controlling interest
would reign in hundreds of additional directors
whose filing of returns "will make the functioning
of the Commission impossible."
Of the 26 companies that are indirectly owned
by the State, 15 are wholly-owned subsidiaries
of companies that are themselves 100 per cent
owned by the State, such as Udecott, First Cit-
izens, NGC and Petrotrin. Five of the 26 com-
panies are part of NEL.
Of those five, only TSTT and NFM have direc-
tors who would not, in the ordinary course of
business, have filed returns with the Commission.
The ramifications of the judgment of Justice
of Appeal Smith go much deeper.
On Thursday last, I sought clarification on the
issue of which state enterprise directors are
required to file returns with the Integrity Com-
mission from the Registrar of that body, Martin
On Tuesday, Mr Farrell responded by stating,
among other things, that in the light of the ruling
of Justice of Appeal Smith in June: "The Com-
mission will determine on a case by case basis
which statutory bodies and state enterprises meet
the criteria established by the Court of Appeal."
If determining which state enterprise directors
are obliged to file returns with the Integrity Com-
mission is now going to be done on a case-by-
case basis, is that not a recipe for confusion, lit-
igation and the negation of the integrity
Has the Court of Appeal
quashed the Integrity Act?
Anand Ramlogan, Attorney General
Larry Howai, Minister of Finance
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