Minister of Natural Resources Raphael Trotman says he is waiting to be advised by the Board of the Guyana Forestry Commission on the way forward for troubled logging company Baishanlin after a no-show by reps of a Chinese State-owned firm that was supposed to take over the company.
“I am unable to speculate or presume why these representatives were unable to come,” Trotman told Stabroek News recently, referring to reps of the Long Jiang Forest Industries Group who were supposed to be in Guyana by May to complete due diligence for the takeover of Baishanlin. President David Granger has said Baishanlin is undergoing a corporate transformation in China.
“The Board of the GFC continues to monitor the operations of all persons and companies with concessions, including (Baishanlin), and the mandate given by me, among other things, is to apply the laws of Guyana. I await to be advised by the Board of matters pertaining to (Baishanlin),” Trotman told Stabroek News.
Several of Baishanlin’s projects have ground to a halt as the company faces financing difficulties despite benefitting from billions in tax concessions from the Guyana Government. Baishanlin has failed to fulfill several commitments made under its investment agreement here and Stabroek News had previously reported that it was to be taken over by Chinese state-owned forestry company Long Jiang Forest Industries Group.
That firm has acquired 55 percent of the shares in Baishanlin and intends to fully take over the company this year, Minister of State Joseph Harmon had said in April. Following an uproar over a photo of Harmon and officials of Baishanlin in a private jet in China, Harmon had said that Vice Director of the company, Wong Dong Xu, in the presence of officials of Baishanlin, gave the assurance that the company’s officials will be in Guyana by May 2016 to complete due diligence for the takeover, and to satisfy and expand on the obligations of Baishanlin to Guyana.
No reps have come while details of the company’s plans have not been made available.
It is not clear when Long Jiang Forest Industries Group acquired majority shares in Baishanlin.
A number of questions have been raised about the proposed deal. Attorney Christopher Ram has said that all transactions engaged in by Baishanlin should be reviewed before any takeover by a new firm and the investment agreement should not automatically be allocated to the successor company. Additionally, some observers have pointed to Regulation 12 of the Forest Regulations and have said that the President needs to approve the transaction.
The regulation states that “No transfer of any lease shall be made by any forest officer without the prior approval of the president which such lease grants exclusive rights to any person over an area estimated to exceed three thousand acres or is for an unexpired period exceeding three years.”
Questioned on this, Trotman responded: “Given that there has been no formal offer of a takeover it necessarily follows that the President has not been called on to approve or disapprove anything.”
Meantime, Granger, when questioned about Baishanlin on a recent edition of the Ministry of the Presidency programme ‘The Public Interest,’ said that the company will “disappear” soon.
According to Granger, Baishanlin is in the process of transformation. “It will disappear as a corporate entity and that will bring an end to any controversy involving Baishanlin as a company. A new entity will take it over and we will have to renegotiate with a new entity. Baishanlin is coming to an end. I cannot say what the situation is in China but I believe Baishanlin is undergoing some corporate transformation within China itself,” he said.
