Severance payouts among priorities of new GuySuCo Board Chairman

John Dow

Ensuring that the over 7,000 workers laid off by the Guyana Sugar Corporation (GuySuCo) receive their severance payments and planning for current and future staff are among the top priorities of newly-appointed Chairman of the company’s Board of Directors John Dow.

“We have to look at the severance situation and see where we are because we have a responsibility to our employees,” Dow, an engineer and agriculture expert, told Stabroek News yesterday.

“We have to plan but first we owe those workers the responsibility to ensure welfare is looked at,” he further stressed.

A large number of workers who were made redundant by GuySuCo at the end of last year received a portion of their severance at the start of the year, with a pledge that the remainder would be paid in the second half of this year.

President David Granger has assured that government’s promise to the workers will be kept. But with the end of September approaching and the payments still to begin, workers are anxious and have voiced their frustrations at having to wait on their legal entitlement.

Dow, who was announced as the Chair-man of the new board by Minister of State Joseph Harmon on Monday, said he has a meeting with Chief Executive Officer (CEO) of the corporation Dr. Harold Davis Jr on Friday and hoped to meet with the full board for the first time next week because he wants to start executing government’s plan for the three remaining estates soonest to ensure the company’s viability.

A member of the Commission of Inquiry (CoI) into the sugar industry, Dow has insider knowledge of the strengths and weaknesses of the industry and intends to leverage that along with the government’s plans for the industry to ensure that GuySuCo is both self-sufficient and profitable to the state.

During the hearings held by the CoI, it was revealed that none of the estates was turning a profit and the industry’s average cost of production was a whopping US$0.45 per pound of sugar.

Dow’s focus will be on ensuring that GuySuCo’s three estates realise their full potential and improve their previous harvests even as it upgrades its current infrastructure to suit the global trends. “We can do it and will need to improve our yields,” he said.

But immediately when he settles in to work, Dow said that having a direct word on severance for the workers would be a key task for him.

The appointment of Dow, John Browman, Richard Cumberbatch, Paul Cheong, Fitz Mc Lean, Vishnu Panday, Ramesh Persaud, Nowrang Persaud, Roy Hanoman, Claude Housty and ex-officio member Davis Jr. comes almost five months since the life of the previous board expired.

The life of the previous board came to an end on the last day of April. Government was to initiate the process to identify candidates to form a new board but there was a delay after it was advertised in March that Colvin Heath-London, who heads the Special Purpose Unit (SPU) overseeing the divestment of some of GuySuCo’s assets, was the new Chairman of the Board, with Komal Singh, Verna Adrian, Fritz McLean, Rosh Khan, George Jervis, Arianne McLean, Vishnu Panday, and Annette Arjoon also identified as directors. However, Minister of Finance Winston Jordan later clarified that Professor Clive Thomas remained the board Chairman as Cabinet had deferred a decision on a replacement. Cabinet documents appointing Heath-London and a new board had been sent out without approval of the full Cabinet and the appointments were subsequently rescinded.

Power struggle

During the five-month period that the corporation operated without a Board, there had been a tussle between the company and the SPU over its operations. More recently, following reports that the SPU has been doing maintenance and rehabilitation work at shuttered estates, with one of the most recent projects being the rehabilitation of the Estate Lounge at GuySuCo’s LBI office, the corporation put out a statement saying that no one was authorised to undertake any works without its approval.

The Kaieteur News reported yesterday that Republic Bank (Guyana) Limited had suspended further financing from a $30 billion bond that it had financed through the SPU for works on the three GuySuCo estates after funds were misused to repay interest on a debt.

While the assets of the corporation were used to secure the bond, GuySuCo has no interactions with the bank since through the third party agreement the SPU is the trustee and is answerable.

This newspaper understands that the matter involving Republic Bank and the SPU was resolved last week.

The SPU has explained that GuySuCo must submit applications that are vetted to make sure it meets the approved criteria of the bondholders. It said that two disbursements have been made so far: one for $880 million and another for just over $1.1 billion.

It stated that monies from the bond facility will be used to purchase equipment for production of white sugar, the development of co-generation plants and operational expenses. It emphasised that the monies obtained from the bond facility were not acquired to facilitate the payment of debt.

However, senior personnel at GuySuCo have told this newspaper that it seems that the corporation was being penalised wrongfully and its recapitalisation works are being put on an “unnecessary hold,” which will further delay plans for the industry. One official said the company believes that the claim by the SPU that it spent outside of its remit was “in direct retaliation to what was written by one of our employees,” with the bank being caught in the middle.

“We have never seen the Trust Deed but have a plan which the SPU knows about and it is working according to that. We were given $2 billion for operational expenses and used it accordingly. When you see what has caused this whole matter, you would understand that the bank was probably told something else. We do not communicate with the bank, so they are only told the SPU’s version. It is like a power of attorney agreement…,” an official said.

“This is being done in direct retaliation to what was written by one our employees, probably to give the impression that we are not competent to do what we said and frustrate the process—that we were given $2 billion and cannot manage it. Well, in the budget we are given billions and our books are audited annually and you never hear of any problems here. Let the records show for themselves,” another official added.

A senior government official blamed the crafters of the Trust Deed, saying that “ambiguous language leaves room for more than one interpretation and that would make both persons right.”  He said that “you cannot have a document such as Trust Deed and have words such as “reasonable” and those things in it. Who determines reasonable?” he asked.

Meanwhile, Dow said that he did not have all the details of events that have transpired and therefore would wait until he had all the facts on the matter before commenting.

Minister of Agriculture Noel Holder last week said that he expected that when the new Board is appointed, the tussle between GuySuCo and the SPU would come to an end. He said that the two sides would have the opportunity to meet “first to try to trash out any differences” before his or any subsequent Cabinet intervention.

Holder also reiterated that funds secured by the SPU would be used to undertake a three-phased approach in the revamping of the sector. “The funds are needed and will be used in a three-phased project where the first is recapitalisation, then we move to white sugar [production] and last is co-generation. A state paper went to the parliament where it explained in detail where we were going and what would happen,” he said.

He pointed out that the assets of the corporation are in the “hundreds of billions of dollars” and he was optimistic that with the new Board in place “much will begin happening.”

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