Amid a crisis in the sugar industry, the Government of Guyana yesterday dismissed the Chief Executive Officer (CEO) of the Guyana Sugar Corporation, Dr Rajendra Singh, while also asking the Board of Directors to resign with immediate effect.
Agriculture Minister, Noel Holder told Stabroek News that the dismissals were necessary. He said that the enormous amount of money the corporation recently requested, $16B, to avert an industry-wide shutdown was reflective of the poor management by both the CEO and the Board. He noted that in 2014 the corporation received a $6B bailout.
The GuySuCo Board is currently chaired by former PPP/C Minister Shaik Baksh, who could not be reached yesterday for comment. It also comprises Dunstan Barrow, Chairman, Board of Directors, Linden Enterprise Network; Dr Dindyal Permaul, Chief Executive Officer, Guyana Livestock Development Authority (GLDA); Keith Burrowes, Executive Chairman, Board of Directors, Guyana Office for Investment (Go-Invest); Badri Persaud, Managing Director, Guyana Oil (Guyoil); and Geeta Singh-Knight. Raj Singh is an ex-officio member.
Holder stated that the new APNU+AFC government just did not believe that the corporation needed that much money ($16B) , “we don’t believe these figures.”
He said that the interim management which is to be appointed will take roughly a week to go through the finances and ascertain just how much money is required. The interim committee will oversee the corporation for at least six months.
Holder said that the operations of the corporation under Singh’s tenure had been at a “total financial loss,” and as a result there was no need to keep on such an ill-performing executive along with the Board of Directors.
He said that a Commission of Inquiry (COI) will be established by the end of the month and will look into the operations of the sugar corporation and chart the way forward. He also said that the government wished to assure workers that they will be paid and that there will be no industry shutdown. The government’s planned COI is based on its Manifesto promise of what it intended to do within its first 100 days in office.
According to a release from the government, the interim management committee will take charge from today. No names were released as to who would be on the committee.
The cash-strapped GuySuCo in the last few days had managed to secure $400M from the National Commercial Bank of Jamaica after the modification of a US$15M loan agreement. On Tuesday, cabinet chose not to pronounce on the requested bailout for GuySuCo.
Singh told this newspaper yesterday that he did not wish to comment as yet on his dismissal stating that he had not yet seen the letter.
He did however say that the government could not deny that the industry needed billions. He cited the revelations of the Economic Services Committee of Parliament last year which made it public that GuySuCo’s debt exceeded $58B.
Singh said the industry’s financial woes were well documented and known to the public. The New Jersey, US-based Singh was controversially appointed as Chairman of GuySuCo in July 2012. He was deputy chairman at the time. Questions had been raised then about his suitability for the position. He was later appointed CEO after the resignation of Paul Bhim.
In recent years GuySuCo’s production has slumped even as its debt has grown substantially. It has also been beset by lower prices for sugar, a dwindling labour supply, unpredictable weather, deteriorating field husbandry and difficulties transforming beds for mechanical harvesting. A major drain on the industry has been the Chinese-built Skeldon factory which has severely underperformed.
General Secretary of the People’s Progressive Party, Clement Rohee yesterday said that a new board and a new CEO will be faced with the same challenges.
Speaking on behalf of the party, which held office for 23 years as the industry continued to decline, Rohee said that “I don’t know if it is a changing of the guards to solve the problem. I think it is a systemic and financial problem and that is what they have to grapple with.”
He said that the new APNU+AFC Government would have the same challenges, “They have to sit in cabinet and find the solution to the problem just like we had been doing.”
Rohee noted that the government’s plan for a COI would cost millions. He questioned where the money would come from and was cynical as it related to the inquiry’s findings stating, “What will it tell them? Where to find the money?”
The PPP’s General Secretary made no attempts to justify or explain how days after the new government was sworn in GuySuCo dropped the bombshell of an imminent industry shutdown.
