Sep 19, 2016 News
The Government of Guyana is no longer looking out for those investors who had acquired 55 percent of the controversial logging company—BaiShanLin International Forest Development Inc—and were to sign new investment agreements here.
Minister of Natural Resources, Raphael Trotman said that the Government has been more than lenient. He said that the administration gave the investors enough time to come to Guyana and take the necessary actions.
Despite being “given a long rope”, Trotman said that the investors’ interest did not materialize.
“No reason has been given why they did not come and the government and the GFC (Guyana Forestry Commission) felt that it was important to proceed with the necessary actions,” said Trotman.
The Minister made reference to a letter which he received in July indicating that the investors in China were having difficulties obtaining visas to travel to Guyana.
He said that he intervened and spoke to Minister of Foreign Affairs, Carl Greenidge as well as the Minister of Citizenship, Winston Felix asking the both of them to clear any problems that might have existed.
Trotman said that he was given all assurances that should persons present themselves as investors in the forest sector, they would be facilitated as a matter of national interest.
“I knew of no other impediments to the investors coming.”
Trotman said that there was correspondence from the investors indicating that they would have been in Guyana by August the latest.
“So we put August 31 as the deadline and having not received any word I believe the GFC was in its right to proceed.”
The fact that BaiShanLin investors pulled a no show is what caused the GFC to move to repossess concessions held by BaiShanLin.
The Chinese company was in control of a major portion of Guyana’s forest which has been acquired through what has been described as the illegal acquisition of concessions held by other local companies.
The GFC said that its decision came after the company failed to deliver on agreed steps to introduce investors to the Commission and having been given time to prove that it had an acceptable plan to clear an approximately $80M debt to the GFC. The commission said that representatives of the BaiShanLin were invited to a meeting in April to provide an update on its plans to clear the debts.
During the meeting, representatives cited financial constraints which affected the establishing of the wood processing facility and said that the company was engaging a new partner that would contribute significantly to their investment in Guyana.
The GFC Board was assured of the financial strength of the new partner who had committed to pay off the debt owed by the company to GFC.
Having established a presence here in 2006, BaiShanLin has been accused of making big promises to add value to forestry but failing to do so. Instead, it kept on gathering forests and increasing the export of logs all the while gaining huge fiscal concessions under the former PPP/C government.
During 2012-2015, the PPP/C government granted BaiShanLin concessions amounting to $1.8 billion despite its failure to fulfill obligations under its investment agreements.
Forensic auditor Anand Goolsarran who made the finding recommended that the Government of Guyana consider terminating the investment agreements with the company and recover the value of the fiscal concessions granted to it.
Many of the items for which tax waivers were granted were either unrelated to, or significantly more than the requirements for the company’s project.
Baishanlin became a source of embarrassment for the current APNU+AFC government when Minister of State Joseph Harmon interfered with the Guyana Revenue Authority’s seizure of its assets in settlement of a tax liability. Shortly after, Harmon proceeded on a mystery trip to China where he was photographed with Baishanlin officials. Amid the controversy that swirled over his trip, Harmon would later say that another Chinese company, the China-owned Longjiang had acquired 55% of Baishanlin and would be taking over the company’s operations here. Lonjiang never showed.
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