Credit union demands GuySuCo stop deductions after owed $154M

May 29, 2015 News

A major credit union of the cash-strapped Guyana Sugar Corporation (GuySuCo) has demanded that the state-owned company cease making deductions after it (the union) ended up being owed over $150M.
According to the Guyana Agricultural and General Workers’ Union Cooperative Credit Union Society, it has suspended activities with GuySuCo. As at the end of April, 2015, the corporation failed to remit some $154M which represents workers’ savings for five months.
“GuySuCo promised to the Credit Union some payments not later than the third week of this month (May, 2015) but same did not materialize,” the credit union said.
GuySuCo cannot make any deductions after May 30.
The failure has breached an existing agreement in place by the credit union and GuySuCo.
“The credit union is now unable to continue to facilitate savers’ withdrawals in the light of the non-payment of the workers’ savings by the Corporation in accordance with the relevant agreement. Additionally, the credit union has taken consideration of the fact that it is now unable to secure further loans to satisfy savers’ withdrawals.”
According to the credit union, the sad decision, if it is not urgently redressed by the corporation will cause the jobs of its employees to be in jeopardy.
“The credit union, therefore, looks forward to receiving as early as possible from the Corporation the workers’ outstanding savings so that its dependable services to thousands of sugar workers would resume as early as possible.”
This latest situation would continue to put even more pressure on the GuySuCo, its board and management because of a cash situation.
Earlier this week, GuySuCo’s Chief Executive Officer, Dr. Rajendra Singh, reportedly told unions that it had no cash to pay junior and senior staffers for this month.
If no cash injection comes by Sunday, GuySuCo will be forced to close its estates in Berbice and Demerara, the CEO told unions. However, the executive has found himself in hot water.
He reportedly met with the new Minister of Agriculture, Noel Holder, on Monday, but did not tell the minister about the cash situation. Rather, the minister was handed a document with a large number of pages.
The CEO has been under pressure for the falling production at GuySuCo.
GuySuCo in addition to falling short of the first crop target of 86,000 tonnes by 5,000 tonnes, has been depending on each crop to cover expenses.
It recently sold out its Wartsila generation set at the troubled new Skeldon factory to the Guyana Power and Light Inc. (GPL) for US$30M to raise cash. It reportedly received US$9M and used that money to cover expenses in the recent crop.
According to GuySuCo officials, the corporation was hoping to get the remaining US$21M, but this has not been forthcoming, purportedly because of the elections and other factors.
GuySuCo owes loans to local and international banks and has been given a reprieve on tax payments to the Guyana Revenue Authority. It also reportedly owes more than $1B to the National Insurance Scheme for deductions made from its 16,000-plus workers.
Sugar is the third largest foreign currency earner for Guyana and was a hot button topic in the lead-up to the recent elections.

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Credit union demands GuySuCo stop deductions after owed $154M

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