The Guyana Sugar Corporation (GuySuCo) yesterday strongly refuted the claims by the Special Purpose Unit (SPU) of the National Industrial and Commercial Investments Limited (NICIL) that it is not adequately accounting for funds it has received and has withheld pertinent information on spending.
“If you are implying that we are misappropriating funds, we take that very seriously and that is defamation. It is very serious,” Chief Executive Officer (CEO) of GuySuCo Harold Davis Jr told Stabroek News yesterday. “They are making us the scapegoat for what are their shortcomings,” Davis added.
Davis said that in the interest of transparency and the public getting both sides simultaneously, NICIL and the SPU should have invited the corporation’s representatives to the press conference it held on Monday and he questioned why this was not done. “It is unfortunate that we were not involved at the press conference at the same time and could refute and outline what the truth is but they did not invite us… they never invite us,” he said.
The SPU and GuySuCo have been in a power struggle for roughly two years, with each accusing the other of undermining its efforts.
Davis and GuySuCo Public Relations Officer Audreyanna Thomas informed that they are compiling an in-depth response to the allegations levelled against the corporation.
At a press conference on Monday to discuss the divestment of some of GuySuCo’s assets, acting head of NICIL Colvin Heath-London said that the SPU has, through nine disbursements, transferred a total of $7,420,759,568 to GuySuCo but the company has not provided an accounting “in the detail required by the bond holders.” He said that another $1 billion request is presently in the system and believes that it will also be paid.
According to the bond agreement, funds are to be used from the bond facility to purchase equipment for plantation white sugar and co-generation plants and to meet operational expenses, including wages and salaries.
Heath-London explained that the sums were requested based on the broad heading of “various operational needs” but the SPU has not received confirmation of what the money has been used for, which places NICIL in a difficult situation.
“The bond holders and trustees are not happy with information coming from NICIL. As part of the arrangement, we are supposed to provide the bond holders evidence of what proceeds are used for. We have not been able to do that to date. GuySuCo is still to provide that information,” Heath-London explained, while adding that the SPU is “still operating on good faith in relation to funding GuySuCo as a going concern.”
He stressed that as part of its mandate, the SPU was asked to fund GuySuCo and secured the bond using NICIL’s asset pool, which includes more than 15 different government agencies.
”In no way shape or form is the bond backed by GuySuCo assets. It’s a purely NICIL bond and what happens if we default on this is it will be NICIL’s assets and subsidiaries that will suffer,” Heath-London lamented.
“If we continue we are pushing NICIL and by extension government into default. We have been written (to) and chided by bond holders and trustees to this effect and are working to bring the standoff to an end,” he stressed before lamenting that the standoff with GuySuCo can have far reaching effects. “It affects Guyana’s financial creditability on the regional and international market. A lot of financial institutions are plugged in to how Guyana is operating under this bond. Whenever we may go into the financial space again, they may treat us based on how they perceive we operated with this bond. It has far reaching effects. It affects future funding of projects in Guyana,” he added.
Independent business
But Davis dismissed the claims as he explained that even before the payments are made, GuySuCo provides the SPU with information. “We are an independent business [but] we still provided all the information they needed…,” he said.
“It is serious, these allegations, and I as CEO am offended. Wouldn’t you be?” he questioned while stating that records are available to prove that they have not mismanaged or misappropriated monies. Davis said that if the SPU needed additional information from the corporation or was not satisfied with what they had, it could have looked at audited statements of the corporation and he called on the unit to do so.
GuySuCo’s management has maintained that it has been left in the dark on the terms of the $30 billion bond secured for the corporation.
Heath-London on Monday said that as of May 22nd, 2019, some $783,750,000 in interest has been paid on the principal.
Executives have said that the SPU was charged with selling its assets and funneling that money back to the corporation for its use.
“Firstly, it is important to establish clearly that the Special Purpose Unit was established as a special purpose vehicle through which the assets for GuySuCo’s four estates – Skeldon, Rose Hall, East Demerara (Enmore) and Wales – would be divested and the proceeds of the sales injected into GuySuCo. The decision was taken by the Government that NICIL will host this vehicle, which is the SPU. Another point that must be very clear is that the sole purpose of the SPU was to divest GuySuCo’s assets, including the four estates, and some lands for commercial sale. The funds are to be used for rehabilitation/recapitalisation of the new commercial projects. Therefore, the common interest between GuySuCo and NICIL/SPU is relative to the four vested estates,” an executive had explained in March of this year. It was around the same time that the SPU had charged that GuySuCo had breached the terms of the bond and the statements from the executives were in response to those claims.
“However, NICIL/SPU took a decision to secure the G$30 billion bond facility as an interim financing arrangement subject to the divestment of the four estates. This decision was entirely a decision of NICIL/SPU without any consultation with GuySuCo. The point made by NICIL in the response to Stabroek News that ‘the real source of the tension between NICIL and GuySuCo …is the deeply rooted philosophical difference between the two agencies with regard to the structural changes and strategic direction for the industry’, GuySuCo would like to state clearly that there cannot be any philosophical difference with NICIL since the agency’s role is clear,” the executive stressed.
Davis yesterday said that GuySuCo has been holding its own with the monies given as it continues to meet targets set and he maintained that the overall running of the corporation has “improved.”
