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Scammed! - Cane group pays millions to shadyfirm for cheap fertiliser
published: Tuesday | December 2, 2008
Mark Titus, Enterprise Reporter
Left: Rickards - A decision was taken to try asample shipment. Right: James - Everything is being done to recover the deposit.
An Indian company has left Jamaica Cane Products Sales (JCPS) holding the bag after swindling it out of approximately $87 million that was earmarked for the purchase of cheap fertiliser from the subcontinent.
The deal was made through a New York-based Jamaican company, which contacted players in the industry, claiming they were able to source and supply the product more cheaply than Newport-Fersan limited.
Newport-Fersan is the only company in Jamaica that manufactures fertiliser.
"A decision was taken to try a sample shipment," said Allan Rickards, chairman of the Jamaica Sugar Cane Growers' Association.
Easing financial bind
JCPS, jointly owned by cane farmers and manufacturers, is primarily the marketing arm of the sector, but was attempting to import fertiliser at cheaper rates. In less than a year, fertiliser prices more than doubled, leaving many growers in a financial bind.
"The (Indian) company required a deposit of US$1.4 million (J$105 million) and that was paid over to the (Jamaican) company in New York," Rickards added. However, the agreed delivery of the fertiliser by the end of the sugar crop did not materialise and, except for the New York-based agency's commission of US$250,000 (approximately J$18 million), efforts to recover the cash have been unsuccessful.
Boss to blame
It would appear that the chips are falling at the feet of JCPS boss Karl James as, according to sources intimate with the details of the arrangement, the normal mode of payment for such a transaction was not followed, as a cash deposit was made instead of a letter of credit.
(hopefully none of this cash funded the terrorist activities in Mumbai)
While the deal was expected to benefit the nation's farmers, Minister of Agriculture Dr Christopher Tufton said he had no information on what had taken place.
"The Cane Farmers' Association and the Jamaica Cane Product Sales, they are independent of the SCJ (Sugar Company of Jamaica)," Tufton told The Gleaner.
Controversial arrangement
In concurring with the minister, SCJ head Robert Levy said his organisation had nothing to do with the controversial arrangement.
While unwilling to provide The Gleaner with particulars for the Jamaican company in New York, James, who has served in numerous managerial capacities in both the private and public sectors for more than 40 years, confirmed the incident, but said everything was being done to recover the deposit.
"We have a very well-known legal firm working with us, plus the Indian High Commission and other international people who we are in touch with," he said.
No track record
James revealed that checks had been made through the Jamaican consulate in New York.
"It was a new company," he explained of the finding. (that mek it worse!)
"They don't have a track record, but they are listed, which is the important thing, and they have an address," he added optimistically. (in reality, it means nothing)
Move to satisfy people
While avoiding direct comment on the form of payment, James argued that such an incident could occur when one was "seeking to satisfy the cry of people who had given a timeline".
Efforts to speak with the Indian High Commissioner, Mohinder Grover, were unsuccessful. However, an Indian government official, who wished not to be named, has admitted to knowledge of the situation.
No due diligence
The official said an enquiry had been initiated, but made sure to point to the failure of the JCPS to observe due diligence.
The official also cited the lack of a proper agreement as one of the reasons for the problem.
The board of the JCPS is scheduled to meet on the issue later today. mark.titus@gleanerjm.com
published: Tuesday | December 2, 2008
Mark Titus, Enterprise Reporter
Left: Rickards - A decision was taken to try asample shipment. Right: James - Everything is being done to recover the deposit.
An Indian company has left Jamaica Cane Products Sales (JCPS) holding the bag after swindling it out of approximately $87 million that was earmarked for the purchase of cheap fertiliser from the subcontinent.
The deal was made through a New York-based Jamaican company, which contacted players in the industry, claiming they were able to source and supply the product more cheaply than Newport-Fersan limited.
Newport-Fersan is the only company in Jamaica that manufactures fertiliser.
"A decision was taken to try a sample shipment," said Allan Rickards, chairman of the Jamaica Sugar Cane Growers' Association.
Easing financial bind
JCPS, jointly owned by cane farmers and manufacturers, is primarily the marketing arm of the sector, but was attempting to import fertiliser at cheaper rates. In less than a year, fertiliser prices more than doubled, leaving many growers in a financial bind.
"The (Indian) company required a deposit of US$1.4 million (J$105 million) and that was paid over to the (Jamaican) company in New York," Rickards added. However, the agreed delivery of the fertiliser by the end of the sugar crop did not materialise and, except for the New York-based agency's commission of US$250,000 (approximately J$18 million), efforts to recover the cash have been unsuccessful.
Boss to blame
It would appear that the chips are falling at the feet of JCPS boss Karl James as, according to sources intimate with the details of the arrangement, the normal mode of payment for such a transaction was not followed, as a cash deposit was made instead of a letter of credit.
(hopefully none of this cash funded the terrorist activities in Mumbai)While the deal was expected to benefit the nation's farmers, Minister of Agriculture Dr Christopher Tufton said he had no information on what had taken place.
"The Cane Farmers' Association and the Jamaica Cane Product Sales, they are independent of the SCJ (Sugar Company of Jamaica)," Tufton told The Gleaner.
Controversial arrangement
In concurring with the minister, SCJ head Robert Levy said his organisation had nothing to do with the controversial arrangement.
While unwilling to provide The Gleaner with particulars for the Jamaican company in New York, James, who has served in numerous managerial capacities in both the private and public sectors for more than 40 years, confirmed the incident, but said everything was being done to recover the deposit.
"We have a very well-known legal firm working with us, plus the Indian High Commission and other international people who we are in touch with," he said.
No track record
James revealed that checks had been made through the Jamaican consulate in New York.
"It was a new company," he explained of the finding. (that mek it worse!)
"They don't have a track record, but they are listed, which is the important thing, and they have an address," he added optimistically. (in reality, it means nothing)
Move to satisfy people
While avoiding direct comment on the form of payment, James argued that such an incident could occur when one was "seeking to satisfy the cry of people who had given a timeline".
Efforts to speak with the Indian High Commissioner, Mohinder Grover, were unsuccessful. However, an Indian government official, who wished not to be named, has admitted to knowledge of the situation.
No due diligence
The official said an enquiry had been initiated, but made sure to point to the failure of the JCPS to observe due diligence.
The official also cited the lack of a proper agreement as one of the reasons for the problem.
The board of the JCPS is scheduled to meet on the issue later today. mark.titus@gleanerjm.com
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