Senior Official At Suriname's State-Owned FAI Remanded Into Custody
PARAMARIBO, Suriname – A director at the state-owned Food and Agriculture Industries (FAI) has been remanded into custody on suspicion of financial malfeasance, a few weeks after he and the general manager, were suspended for serious mismanagement.
Agriculture, Animal Husbandry and Fisheries Minister, Mike Noersalim speaking during the meeting on TuesdayFAI was at one time, the country’s sole banana exporter, operating large-scale banana plantations and while its primary function was to produce and export bananas, it also has a unique role in the regional market, though it has faced challenges like disease and competition.
The company has recently been taken over by the state and has claims against its former management due to alleged mismanagement.
An investigation by the Quick Scan Team of the Ministry of Agriculture, Animal Husbandry and Fisheries (LVV) shows that the baking company has debt totalling US$22 million and that the government as a shareholder, has over the past five years, been subsidising the state-owned company by nearly SRD 200 million (Suriname dollar=US$0.02 cents)
Agriculture, Animal Husbandry and Fisheries Minister, Mike Noersalim, Tuesday held a meeting with stakeholders telling them “there is a very urgent situation at FAI” and that the crisis did not happen overnight.
Noersalim said that upon taking office, the government indicated it would investigate state-owned enterprises and during the investigation into FAI, financial malpractice was discovered, likely involving violations of anti-corruption law and harm to the state.
He told the meeting that in principle, state-owned enterprises with good management do not require subsidies, although in practice this appears to be different.
He said that the review point to deeper problems, noting for example, exports have been delayed because a transport company suspended its partnership due to unpaid invoices. Speaking to reporters following the meeting, Noersalim said that everything is being done to avoid losing the export markets of Barbados and Trinidad and Tobago.
He said that production has declined sharply, currently at around 200 hectares, far below the breakeven point of 350 hectares required for profitable exports, noting that among the cases for the decline include an outdated irrigation system, the sale of unseaworthy containers and other company property at remarkably low prices, as well as salary increases implemented without the usual Supervisory Board approval.
As a result, Noersalim said that strict measures are necessary.
“If we are faced with a debt of US$8.5 million to Hakrinbank and we are unable to repay it, then we cannot continue in this way,” he said, adding that he has already consulted with the bank and his counterpart from Finance to find solutions.
“This is a high priority for the government,” he said.
The meeting also agreed to jointly explore all options to reduce the debt, increase production, and restore the company to a healthy, transparent, and profitable operation.
