…as E’bo farmer sues MRL for $125M
In what may be a case of growing intolerance, a prominent rice milling company, under fire for non-payments to farmers, has been taken to court by an Essequibo farmer who is claiming more than $125M in outstanding monies.
Yesterday, Justice Rishi Persaud also ordered that 5,000 tonnes of rice being held at Muneshwer’s Wharf in the city not be moved or sold by Mahaicony Rice Limited (MRL).
The matter was filed by Attorneys-at-law, Anil Nandlall, Manoj Narayan and Euclin Gomes on behalf of Arnold Sankar, the Essequibo rice farmer and businessman.
According to Sankar, in an ex-parte application by way of an Affidavit for Interim Injunction, he has been transacting business with MRL for the past 10 years by selling and delivering paddy to them.
Additionally, he acted as an agent of MRL, using his own money to purchase paddy from other farmers, which is then resold to the company on a commission-basis.
“In order to finance these purchases and with the knowledge, encouragement and concurrence of the Respondent/Defendant, I have secured loans and overdraft facilities from the Guyana Bank for Trade and Industry (GBTI) and all my immovable properties, including my dwelling house, and all my motor vehicles, are presently mortgaged, pledged and/or charged to the Guyana Bank for Trade and Industry (GBTI) as collateral security for these loans and overdraft facilities.”
Sankar claimed that MRL, as part of an agreement with him, had committed to pay the interest charges on these loans and overdraft facilities.
“In other words, the Respondent/Defendant was receiving funding from the said bank through me. In this regard, I am currently indebted to the said bank to the tune of in excess of one hundred million dollars
The Airy Hall businessman claimed that between September 2009 and November 2009, he purchased approximately 113,000 bags of paddy to the tune of $251M from farmers in Essequibo, which were fully paid for using his own money. The paddy was delivered to MRL.
However, between March 19 and April 2, 2010, Sankar said the company paid five cheques, valued $25M each, which were bounced by a local bank.
“I have made repeated demands to the Respondent/Defendant for payment of the aforesaid sums but to no avail.”
Sankar further claimed that MRL is getting ready to ship over the weekend over $200M worth in rice which is stored at Muneshwer’s Wharf, at Water Street, Georgetown.
“From the time I have supplied the aforesaid paddy to the Respondent/Defendant to date, they have shipped hundreds of millions of dollars of rice out of Guyana but nonetheless have refused to pay me or the rice farmers who have sold and delivered paddy to them,” the businessman claimed.
As a result, Sankar said that he is claiming the $125M, which represents monies from the bounced cheques, and an injunction restraining MRL from removing or loading approximately 5000 tons currently stored at Muneshwer’s Wharf until further ordered, or alternatively, unless and until they lodged $125M at the court.
The businessman is demanding interests and costs.
Sankar also claimed that MRL is indebted to him for another $50M for paddy, which was sold and delivered to them earlier this year, and for which no payments were made.
“However, because of the constraints of time and due to the fact that I have not fully and finally tabulated those accounts, I have not included the sums due thereof in these proceedings but I intend to file proceedings for the recovery of those sums of money shortly.”
In the affidavit, Sankar claimed that he is aware that MRL is indebted to several rice farmers for $400M but “is also refusing to pay those farmers”.
He also stated that his loans and overdraft facilities at the Guyana Bank for Trade and Industry are in heavy arrears and the interest is “spiraling at a compound rate because I have not been able to and cannot meet my installment payments. That in the circumstances, without the assistance of this Honourable Court, there is a strong possibility that I will suffer definite financial ruination.”
The matter comes up for a hearing on August 11.
Over the past weeks, there has been mounting pressure on MRL after several complaints from rice farmers to government regulators about non-payments.
Several rice farmers had staged picketing exercises at a Black Bush Polder facility, Region Six, and also at Mahaicony.
Officials of the Guyana Rice Development Board, regulators of the rice industry, have said that they were facing problems getting MRL to pay farmers for more than $300M in paddy taken during the last crop.
Recently another amendment was made to the law that will force millers to lodge 10% cash value of their last crop value before milling licences are issued.
GRDB and Minister of Agriculture, Robert Persaud, in addition to promising free legal advice, have also signaled intentions to pass legislation to reduce the possibility of monopolies in the rice industry.
Currently MRL controls almost 40% of the paddy purchases in Guyana with mills scattered in the three counties.
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