Tip of the iceberg… Distribution of sugar was manipulated to favour GuySuCo friends

Tip of the iceberg… Distribution of sugar was manipulated to favour GuySuCo friends – report

May 17, 2018 News

The Guyana Sugar Corporation (GuySuCo), in addition to not doing the best job to ensure it received top price from its overseas customers, was also not doing enough to protect the local market.
Recent reports have pointed to a manipulation of the local quota system by top staffers.
There is evidence, supported by audit findings, that individuals posing as legitimate businesses, managed to acquire quotas, though not meeting the criteria.
According to recent internal correspondence acquired by Kaieteur News, the findings would point to rackets being run at almost all levels of the state-owned companies.
The other includes procurement fraud, theft of fertilizers, poor supervision and a bloated payroll.
In the case of the local distribution of sugar to the market, there appears to have been help from top GuySuCo officials to ensure close friends get into the action.
Two men, one from De Willem, West Coast Demerara, and another from Canal Polder, West Bank Demerara, who benefitted, are estimated to have made more than $50M in profits, in a six-year period, just for getting more bags of sugar to supply the market.
Local shops have been complaining of the supply being controlled to the point of sugar running out at times.
According to the internal report, it was explained that the cash-strapped GuySuCo, being the sole producer, would have had in place a robust local sales procedure.
Prior to 2016, the procedure was unwritten but practised and enforced unwaveringly.
The maximum quota allowed was 200 bags per week for businesses.
However, various audit checks uncovered that the quota system was manipulated and ignored by the senior management on several occasions.
In short, the procedures were breached, the report said.
Under the conditions to be granted a quota, the business must submit ID, business registration, business licence, shop licence, and TIN and VAT certificates copies.
The applicant must also submit authorizations, permits from the Food and Drugs Department with an automatic investigation by the Marketing Department of GuySuCo before the award of the quota.
It was found that two instances, in 2011, a De Willem resident and Canal Polder shop owner applied for quotas. They were each granted 100 bags weekly.
By 2015, when a top executive who had been off the job, was rehired, the two persons were granted an increase to their quotas.
Auditors flagged the quotas to the two in their 2011, 2013, 2016 reports.
In visits to the De Willem area, they determined that the quota holder did not have a business and was not operating as a food business and grocery.
Despite the warnings of auditors, GuySuCo stuck to the De Willem business, but dropped a number of others who had breached the conditions.
The 2013 audit report said that a Security Manager of GuySuCo went to the premises and verified a bond existed.
However, auditors disputed this in the 2016 audit, when they returned to the De Willem and Canal Polder area and determined that both had no storage bonds and therefore were in breach of the conditions to be quota holders.
Despite the audit findings, GuySuCo stuck with the two quota holders.
The two businesses were estimated by GuySuCo investigators to have earned $56M in profits in the six-year period, 2012-2017, selling a bag for $5,500 after buying it for $4,900.
The report concluded that findings clearly demonstrated a pattern of malfeasance and dereliction of duty by the senior GuySuCo official and must be addressed.

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Tip of the iceberg… Distribution of sugar was manipulated to favour GuySuCo friends – report

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