Former CEO costs GuySuCo US$75M, abused company laws

Sep 03, 2015 News

– Reportedly traded sex for salary increase and promotion with Rose Hall employee

By Kiana Wilburg

Former GuySuCo CEO, Rajendra Singh

It didn’t take the coalition government much digging to unearth some of the unimaginable infractions committed by Dr. Rajendra Singh when he served as CEO of the Guyana Sugar Corporation (GuySuCo).

Government reportedly has “indisputable” evidence to justify Dr. Singh’s dismissal. The government cited the violation of GuySuCo’s procurement procedure for equipment, spares and other items, the infringement of the corporation’s disciplinary procedure and the contravention of the corporation’s procedure regarding recruitment, promotion and remuneration of employees.

But Dr. Singh is threatening the government with legal action over his dismissal which he claims is without cause.

According to documents, Singh deviated from a decision handed down by the previous Cabinet and authorized the sale of 2.6792 acres of land at Plantation Good Hope, East Coast Demerara to one Kelvin Gobin.

The former CEO also engaged in the procurement of one whole stalk harvester for mechanized harvesting at the cost of $19.2M despite technical advice to the contrary from the corporation’s technical personnel.

“This machine is a wasted asset wholly unsuitable for operation throughout the entire cultivation,” one document stated.

Dr Singh also entered into management agreements with Global Casetech and Global Cane Sugar services out of India for the management services on a number of estates at unreasonably high cost and without approval of the board of directors.

Research into the financial accounts of GuySuCo, found that Dr. Singh had “deliberately misled” Agriculture Minister, Noel Holder, on the true financial state of the company prior to the passing of the 2015 budget.

He had said that GuySuCo only had sufficient cash flow to sustain it until the end of May and subsequently informed the unions that due to inadequate funds, the corporation was on the brink of closure by the end of May 2015 as it would be unable to pay employees.

What is also troubling to the coalition government is Dr. Singh’s violation of GuySuCo’s Code of Conduct. He allegedly used his position to elicit sexual favours from an employee at Rose Hall.

He purportedly rewarded her with a promotion and increased remuneration. “This goes against the grain of the company’s promotion and remuneration procedure and the labor agreement between the corporation and The National Association of Agricultural Commercial and Industrial Employees (NAACIE),” a report stated.

Kaieteur News also understands that Dr. Singh persisted with a commercial bio-fertilizer project despite advice to the contrary from the corporation’s research and technical personnel.

The former CEO, on his own initiative, engaged in sole sourcing of bio fertilizers from Kay Bouvet Engineering Ltd. of India to the tune of US$76, 688 in June 2014 and from Global Cane Sugar Services Pvt. Ltd. of India in the sum of US$68,580 in February 2015.

Despite being cautioned numerous times regarding the whole scale of adaptation of a practice that has not been used outside of India, the former CEO persisted with commercial application rather than a trial as advised.

Further, on a number of occasions, he left the jurisdiction for matters unrelated to the business of the Corporation for extended periods without informing and without obtaining leave from the board of directors.

The former CEO also made decisions which resulted in millions of dollars being lost by GuySuCo.

The documents reveal that Singh had responsibility for finance and marketing for the company and entered into a one-year agreement with Tate and Lyle in 2013 when the company could have entered into one for three years while locking in at a higher sugar price for 2014 and 2015.

This was the first time in the history of the Long Term Agreement (LTA) with Tate and Lyle that a one-year agreement was entered into. The failure to enter into a three-year agreement resulted in a conservatively estimated loss of US$60M in revenue for the corporation for the years 2014 and 2015.

During his time as CEO, he also committed 38,000 tonnes of sugar to Futures Market without locking in a price. The buying price was US$0.16 per pound. The current price is now US $11 per pound. This decline resulted in a loss of revenue in the sum of US$4.2M for GuySuCo.

But the infractions listed in the document do not stop there. In a bid to defy the odds and criticisms from various quarters that GuySuCo was ailing, poorly mismanaged and could not reach its production targets, Dr. Singh did the unthinkable.

He instructed operational management to bring forward unprecedentedly high acreages of cane to achieve the revised production targets in 2014 and first crop for 2015:

Last year, 5,272.5 hectares of cane averaging 48.3 tonnes of Cane per Hectare (TCH) were brought forward.

The document also notes that there are even more infringements on the part of Dr. Singh.

The former CEO through his Attorney-at-law, Ashton Chase, S.C is hoping to settle the matter with GuySuCo. If this route is not successful, they will move to the courts.

Dr. Singh is suing for wrongful dismissal. He said that his contract which came into effect in May 2013, allows him to be employed for a period of five years.

In a letter addressed to GuySuCo, the lawyer outlines that Dr. Singh’s contract had about three more years to run and six months remuneration in lieu of notice would not be unreasonable.

Chase said, too, that his client’s “complementary benefits” should not be overlooked. These include coverage for telephone, electricity and water services and the provision of a vehicle and a driver.

In addition, Chase said that Singh is due six weeks leave, leave passage of $1,168,081 and a gratuity every six months. They are hoping to reach an agreement on his basic net salary which was US$12,530 per month and $70,000 for other allowances.