BaiShanLin proposes settlement with GRA

Jun 19, 2016 News

---

It appears, for the time being, that controversial logging company, BaiShanLin Forest Development

Inc. is seeking to iron out some of the kinks in its relationship with Guyana by seeking to settle its debt with the Guyana Revenue Authority (GRA) which has been accumulated through what financial experts deemed a wonton distribution of tax concessions.
BaiShanLin has been granted $1.8B in fiscal concessions over the years.
BaiShanLin has persistently defaulted on the investment agreement it has signed with the Government to establish a wood processing plant at Linden. A promise to set up the wooed procession plant is what got BaiShanLin the chance to secure the concessions.
The investment agreement specifically states that if the machinery, equipment and materials for which fiscal concessions have been granted have not been used for the purpose(s) specified, the value of the concessions must be repaid to the Government.
During the period 2012-2015, Baishanlin brought in US$38 million worth of machinery, equipment and materials of which fiscal concessions amounting to G$1.8 billion were granted.
A few months ago, GRA seized two of BaiShanLin’s vehicles as part of the process to recover the outstand sum.
During a recent telephone interview with Kaieteur News, Chairman of the GRA Board, Rawle Lucas confirmed that the company is looking to pay off its debt to avoid further seizures.
He said that discussions are continuing and the Authority is yet to decide a way forward. “None of the company’s proposals have been concretized as yet but indeed, BaiShanLin seems to be open to making the necessary payments.”
Lucas said that the Authority’s discussions are covering all issues relating to duty free concessions. Lucas said that further seizures will depend on the outcome of the discussions

In the mean time, GRA is doing some investigations of its own. Lucas said that the Authority is looking to make sure that the amount quoted in the Audit report on the Guyana Forestry Commission represents BaiShanLin’s accurate debt amount.
He said that GRA wants to make sure that it is not being short changed in any way. “We need to make sure we know exactly how much this company has to compensate for. I am awaiting an update in this t regard.”
Further, Auditor, Anand Goolsarran has reported that some of his work was stymied due to the absence of documents he requested from GRA. Goolsarran reported that GRA told him that there was some sort of system malfunction that led to the Authority not being able to produce the requested documents.
Lucas told Kaieteur News that he is also looking to solve that problem. He said that he was quite concerned that important documents could not be located. He said that he has asked that the documents be retrieved as there can be no proper excuse for improper record keeping at such an institution.
Goolsarran had told Kaieteur News that GRA has every right to seize all of BaiShanLin’s materials, equipment and vehicles until it has recovered the full $1.8B in fiscal concessions that have been granted.
He said that as he commented on the fact that GRA had finally been allowed to seize two of the company’s vehicles, Goolsarran said that it should not end there, since the Chinese company is in high debt because of its violation on agreements.
He said that instead of setting up the wood processing plant BaiShanLin bought five logging companies and has been involved in the wholesale exportation of logs with impunity at a time when most tropical timber producing countries have either banned log exports or have severely restricted their exportation.
Goolsarran said that it is a situation of “an unadulterated raping of our forests and destroying the lungs of the earth”.
In his audit report, Goolsarran said that “according to information provided by the Guyana Revenue Authority, during the period 2012-2015, the Government granted Baishanlin fiscal concessions on a variety of machinery, equipment and construction materials with a CIF value of $7.464 billion, equivalent to US$37.320 million.
This was based on investment agreements entered into between the Government of Guyana (represented by the Minister of Finance) and Baishanlin for the construction of a wood processing facility in Region 10. The total value of concessions granted amounted to $1.827 billion.GRA indicated that it was unable to provide information relating to the earlier years because of computer problems.”
He added that a review of the list of items of machinery, equipment and construction materials for which fiscal concessions were granted indicated that many of the items were either unrelated to, or were significantly in excess of, the requirements for the construction of wood processing facility.
“Indeed, the evidence suggests that the fiscal concessions granted were substantially in relation to BaiShanLin’s ownership/control of the five logging companies having TSAs as well as its proposed investment at Providence, East Bank Demerara. This is notwithstanding that the investment agreements were exclusive to the wood processing facility in Linden,” said Goolsarran.

---

---