By Kiana Wilburg
Kaieteur News was the first to expose how some Chinese firms were manipulating the tax concessions system so as to ensure that their network of “sister” or “related” companies was given a distinct advantage over other local entities.
The scheme was one that saw these Chinese firms receiving millions of dollars worth in equipment and machinery for the mining and logging sectors. But instead of using these for the approved purpose, many of these items ended up on the shelves of stores within the established network.
In a recent interview Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia, confirmed that this newspaper was “right on the money” with its reports.
In fact, Statia revealed that the imports of BaiShanLin Forest Development Inc. often ended up in Regent Street stores. He said, too, that 18 sister companies for BaiShanLin enjoyed part of the pie.
The GRA boss explained that the Authority has taken steps to ensure that several forms of abuse where tax concessions are concerned are addressed. In this regard, he pointed out that the revenue authority has pulled in Vaitarna Holdings Private Inc, “because as far as we are concerned they were not adhering to the terms of the contract.”
Statia said that the GRA is even engaged in court matters related to companies which received tax concessions for equipment and machinery but failed to use same for the purpose for which it was granted.
BaiShanLin apparently came here in the mid-2000’s, becoming initially involved in logging.
According to official records, the investor in 2006 registered two companies- BaiShanLin International Wood Group Inc. and BaiShanLin Forest Development Inc.
Since then, the principals of the company have registered more than 15 others. They include BaiShanLin Housing and Construction Inc.; BaiShanLin Mining Development Inc.; BaiShanLin International Shipbuilding and Heavy Industry Inc.; Heilongjiang Forest Engineering and Processing Development Inc.; C-G Economic and Trade Cooperation Park Inc.; New Life International Inc.; BaiShanLin International Investment Group Inc.; BaiShanLin China Shareholding Group Inc.; H7P International Inc.; Quick Auto Service Centre Inc.; Yongli Investment Inc.; BaiSheng International Investment Inc.; New East International Inc.; East International (South America) Inc.; H&P Quarry Inc. and Fun Time Family Park Inc.
Since the birth of these companies, BaiShanLin has been venturing into all kinds of business outside the original logging operations it came here to do. These including ready-mix cement, barge operations, trucking, gold and diamonds mining, logging, housing, fuel, road maintenance, ship building, among other things.
Further, Kaieteur News even caught the company offloading steel at a construction site in North Road back in January last year.
When questioned, a Chinese official on the truck had said that he was selling steel on behalf of BaiShanLin. Asked where the hardware store was located, he said the steel rods came from the company’s unfinished showroom at Providence, EDB. He was willing to supply, with free delivery, once an order was given to him
Furthermore, the BaiShanLin brand has been under scrutiny for the billions of dollars in waivers and concessions that they received.
In fact, forensic auditors noted that according to its business plan, BaiShanLin’s main objective was the commercial utilization of the forest resources of Guyana to produce from its processing plant a wide range of finished products.
After the Initial Investment Agreement in 2007, it was found that there were three renewals and six supplemental agreements between BaiShanLin and Go-Invest based on file information.
Forensic auditors of Nigel Hinds Financial Services said that the Supplementary Agreements in 2012 and 2013 included a proposal for additional construction equipment and recommendations were made and granted.
The auditors said that there seems to be another Initial Investment Agreement for BaiShanLin related to Real Estate among other sectors. The forensic auditors stated that discussions with an Investment Officer at Go-Invest suggest that the second agreement was inconsistent with the policies of Go-Invest.
The forensic audit report said that during the period 2007 to 2012, Bai Shan Lin was cutting and exporting raw lumber without processing it or creating value added products. This was a complete contradiction of its Investment Agreement. The forensic auditors said that it is evident that BaiShanLin’s real objective was to export raw lumber. Nevertheless, Bai Shan Lin still benefited from concessions totaling $1.8 Billion during the period under review —2011-2015.
An examination of the files of four Investors, Bai Shan Lin International Forest Development Inc included, shows that Guyana did not benefit from concessions granted to these Investors. The concessions were worth over $2 billion.
BaiShanLin was in breach of its Agreements for years without any a single sanction being instituted.
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