Defending its Finance Director Paul Bhim, the Guyana Sugar Corporation (GuySuCo) yesterday refuted claims that it received recommendations by internal auditors to fire him for price fixing or any other act of malfeasance.
“The Corporation hereby states that there are no ‘Internal Audit’ reports or other such reports which recommend that Paul Bhim, Finance Director, be disciplined or that his services be terminated,” the company said in a statement.
However, it did not address issues of concern from a 2013 internal audit which reported that bags of sugar, totalling in the tens of thousands over the years, were delivered to businesses/persons although checks at their business places or given addresses showed the establishments never existed or were not registered as businesses.
Last week, this newspaper received excerpts from the 2013 internal audit report and other documents, in which the writer claimed recommendations were made to fire Bhim. The two documents, dated May 3rd, 2018 had no information on who the correspondences were sent to nor did it identify the author/s. One was headlined ‘Corporate Observations.’
“We would appreciate management’s explanations on the questionable quota holders mentioned above. Further, there should be an urgent review to determine whether to continue allocating quotas to the business [es] under question and/or action regards the extent of quota to be allocated,” a recommendation listed in one of the documents stated.
The audit report excerpt detailed findings that thousands of bags of sugar that were consigned to businesses or persons could not be verified by visits not in existence or that the place was not registered or sold sugar.
In cases listed, auditors found the name and address of the receiver of the quota to be a private residence, saw mill, licenced liquor restaurant and auto sales shop.
This newspaper made efforts to contact Bhim but several calls to his phone went unanswered.
The Kaieteur News reported on the documents and yesterday the corporation responded to those articles as well as questions posed to it by this newspaper. It quoted current Chief Executive Officer (CEO) Dr. Harold Davis Jr as defending Bhim, even as he hailed his predecessor for his sterling contribution to the industry. Bhim previously served as CEO.
“In response to the two recent articles, Dr. Harold Davis noted, ‘as Chief Executive for GuySuCo, no reports or recommendations were made to me, the Chairman or the Board of Directors, of any malfeasance or dereliction of duty by Mr. Paul Bhim. As a matter of fact, Mr. Bhim has played an invaluable role during this extremely difficult transition period for the Corporation, particularly in the area of fiscal management,’” the statement said.
When asked by this newspaper if the documents pointing out the recommendation for Bhim’s firing was false, one executive said that it “does not makes sense because at that time Mr. Bhim was acting and did the person ask him to fire himself?”
According to GuySuCo, the issue of price fixing was dealt with before and it believes that it is being brought up again, albeit in a different form.
“On 22 May, 2018, the Corporation responded to articles which were published in the Kaieteur News – On 16 May, 2018 an article was published titled ‘Probe launched into price-fixing racket at GuySuCo’; then on 17 May, 2018 another was titled ‘Tip of the iceberg…Local sugar distribution was manipulated to favour GuySuCo friends’, another on 20 May, 2018 titled ‘In four years, GuySuCo spends over US$11M on outdated spare parts’ and on 22 May, 2018 ‘GuySuCo has over $3B in outdated Fiat tractor spares in stock – growing evidence of massive procurement fraud over time.’ The Corporation responded to these articles and provided the Kaieteur News with facts to correct their erroneous reports,” the statement. A Letter-to-the-Editor sent out at that time was also attached.
“However, on 9 June, 2019 another article was published titled ‘Price fixing racket at GuySuCo…Internal Audit Report recommends Paul Bhim sacked’ and on 11 June, 2019 another article appeared in the same newspaper titled ‘Local sugar quotas…Despite malfeasance and dereliction of duty, GuySuCo failed to take action – Internal Report.’ Kaieteur News has essentially rewritten the reports from 2018 but on this occasion included a source which it purports to be the ‘Internal Audit’ reports for GuySuCo,” the statement added.
As it pertains to Bhim allegedly unilaterally reducing certain customers’ pricing without approval of the Board, one GuySuCo executive explained that “at the time Mr. Bhim acted as CEO there was no Board.”
The corporation sought to explain the process of its price setting for sugar, even as it emphasised the dire straits it faces with world market prices tumbling over time.
“The global sugar industry is currently undergoing a transition which includes intense reforms, and GuySuCo along with other sugar producers in the Caribbean region are challenged to protect the market from extra-regional sugars which are being sold in many instances, at a cheaper price,” it said.
“With regard to selling of sugar on the local market, of which there are over 150 customers, the current European price per tonne of sugar on 11 June, is US$280 whilst on the local market the price is US$500 per tonne. Therefore, GuySuCo currently endeavours to sell more sugar on the local market since the price is higher, which would obviously require adjustments based on demand, since it makes better business sense to sell more on the local market than on the European Market, at a price which is about 55% of what it sells for on the local market,” it added.
GuySuCo has recently boasted that although it was forced to close four estates, it continues to reach projected targets without any subventions from government.
