Septuagenarian fighting to save landmark electronic business
By Gitanjali Singh
Mohamed's Radio and Electronics Ltd is threatened with extinction but its 70-year-old founder, Mohamed Rasheed, is fighting tooth and nail to retain the business he built. In June, the National Bank of Industry and Commerce Ltd (NBIC) foreclosed on the Robb Street business, which at one time was the premier record bar in Guyana. However, Rasheed, through his attorney Darshan Ramdhani, is challenging the legality of NBIC's move against him as well as the actions of its appointed receiver/manager, Maurice Solomon. He is also appealing to President Bharrat Jagdeo to deliver the promised help for businesses in distress. Founded in 1968 as Mohamed's Record Bar which dealt in music, musical equipment and electronics, it was registered as Mohamed's Radio and Electronics Ltd a year later. The business grew out of its 68 Robb Street premises into double occupancy of the adjoining lot. "I started this business in the face of big businesses like Auto Supplies, Fogarty's and Bookers", Rasheed recalled. To start up the business, Rasheed took a $20 million, 20-year mortgage from Colonial Life Insurance Company (CLICO). After paying off this loan in 1988, he went to the Royal Bank of Canada, now NBIC, to restock his business. The debt with Royal Bank of Canada included an $18 million loan in a five-year plan for the business's growth and development. But by 1997, with the dollar sliding, the economy's performance declining and unfair competition, Rasheed went to NBIC for a $10 million to $15 million loan to refurbish his operation. At this time, there was $5.4 million outstanding on his last loan but his overdraft was $50 million. Rasheed said he needed to keep abreast with the competition and wanted to refurbish his business. NBIC, he noted, had an $18 million guarantee on the little complex he had acquired at the business premises. However, this loan was refused by NBIC. No other bank in Guyana was willing to refinance the family business and Rasheed said he approac-hed a lease financing company in the US last December and it agreed to make US$2 million available to his firm. Rasheed said he then saw NBIC officials who felt that it was a good deal that he had gotten to refinance and modernise his business. Rasheed was able to produce a Dunn & Brad Street report on the company to NBIC and was given the nod to go ahead and complete his arrangement with the financiers which took some time and included Rasheed making a US$10,000 deposit with the firm. However, on January 20, NBIC wrote to Rasheed on his overdraft and on March 9, the bank advised him by letter that failure to clear the overdraft would lead the bank to take appropriate action to recover its monies. The overdraft at this time was $65 million including $9 million in interest. Rasheed said he did not know how the company in Miami became aware of NBIC's intention to foreclose on him, but soon after he received a letter from the firm saying it could not continue with the transaction as NBIC was foreclosing. The lease-financing company from Miami had wanted a lien on the business and was reportedly prepared to pay off Rasheed's debt to NBIC to secure the first debenture on his assets. Rasheed said he lost the US$10,000 deposit to the lease company and was later advised that Maurice Solomon, chartered accountant, had been appointed receiver/manager for his operation. Solomon asked to deposit all proceeds from the business in the name of the receiver at NBIC. Rasheed has expressed alarm that he signed a debenture with NBIC, the contents of which he said he never read and which were never made explicit to him by the bank. He noted that he was now aware that it contained a wide-ranging clause which allowed the bank to foreclose on him without going to court. He said a copy of the debenture was never made available to him by the bank either. NBIC Managing Director, Nigel Baptiste found it difficult to believe that Rasheed, a man of so many years experience, did not read the debenture he signed. Rasheed said that after he received the letter from Solomon, he met him and provided all the information requested on April 9. Solomon advised Rasheed that he would appoint a member of his staff to oversee the operations. But Rasheed said that Solomon refused to use the receipts from sales to pay the expenses incurred by the company and five staff members were dismissed. Payments to the National Insurance Scheme (NIS) and for income tax (PAYE) were only made up to April and Rasheed said the business was run into the ground as there were no purchases and the stock finished. Rasheed said he queried Solomon on what was happening and pointed out the example of Hotel Tower where receiver/manager Christopher Ram had managed to keep the business going. Solomon, however, has denied the allegations by Rasheed and pointed out to Stabroek News that he acted as a receiver/manager and in his assessment, the business was not a Hotel Tower which could have been turned around. "The business could not survive. There was no point in trying to do what Ram did," Solomon asserted. He also said that Rasheed is distorting the truth with the intent to mislead the public. On June 19 last, Rasheed moved to the court on the matter but said he received a call from Solomon that day requesting that he open the business. Rasheed said he told him he could not do so as he was going to court. He offered to visit Solomon at his office. Rasheed said Solomon insisted that he open the store and he did so in the afternoon. Rasheed said Solomon turned up with six security guards and saying he was closing the store down, seized the keys to the store and the vehicles. Rasheed was instructed by Solomon to keep away from the business. The next day, Rasheed recounted, Solomon did a stock check and installed two security guards in the yard. He next sent a letter giving Rasheed seven days notice to give up his premises. (Rasheed and his family live in a house behind the business on the same premises.) The notice expired on June 30, but Rasheed was advised by his new attorney to stay on the property. The businessman said that on the afternoon of June 30, he heard the voice of Solomon's deputy downstairs and looked out of the window. He was asked to go downstairs but he refused. He said a second person appeared and advised him that he had a letter from Senior Counsel Ashton Chase to be signed. Rasheed said he told them that he had nothing to do with Chase and the letter could be mailed to him. He said it was then that Solomon and three other men showed themselves, announcing that they were there to evict him and his family from his home. Rasheed said he refused to go downstairs and the men proceeded to secure his back door from outside, they drove nails into his front door and closed the exit through the store as well. Solomon also denied these allegations noting that under the safety law of Guyana, he would have been criminally responsible should anything have gone wrong with the occupants of the house. He said in keeping with the debenture, he acted to take control of the property and sealed all other doors but the entrance to allow Rasheed ingress and egress. Rasheed claimed that he had to call his lawyer to be allowed out of the house as well as the police. He claimed that he told the police he did not feel safe with the guards in his yard and asked that they be stationed out on the street and they agreed. However, on July 1, Rasheed said, Solomon returned with some more men who sawed the chain off his gate and locked the family in again from outside. Twice after that similar attempts were made and Rasheed said to date the police had done nothing about it. Solomon confirmed this, noting that he had to have access to what had become NBIC's property and Rasheed attempted to deny this by changing the lock. Rasheed claims that he was willing to sell his business to pay off his debt and was negotiating with a buyer at $120 million, but Solomon advertised the business and the buyer was now unwilling to pay the original price. Solomon said he was very understanding and gave Rasheed three months from the time he was appointed receiver to conclude his transactions but nothing materialised. Rasheed is now asking the courts for a declaration that the debenture was illegal and charging Solomon with trespass and damage to property. He has secured a court ruling to date allowing him ingress and egress to his home. NBIC on the other hand, is continuing to look to dispose of the assets to recover its money. Rasheed said that the entire matter had taken a toll on him physically and mentally and he was advised by his doctors to see a psychiatrist. Rasheed said that efforts to mediate on the issue have failed and he had tried on numerous occasions to get a hearing with the managing director of NBIC but only happened to speak with him once, when he was given a month's extension on his credit. The businessman said that like the rice sector, he needed more time than a month to put arrangements in place to clear off his debt. He said he regretted not having considered a joint venture for the business years ago and said that now that he was considering retiring he still wanted to maintain the business name. He plans to convert the business into a mall, with one section housing the record business and to install a business manager to run the operations.
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