PARAMARIBO, Suriname, CMC – 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.
FAI was at one time the country’s sole banana exporter, operating large-scale banana plantations. While its primary function was to produce and export bananas, it also played a unique role in the regional market, though it has faced challenges such as disease and competition.
The state has recently taken over the company 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, on 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. During the investigation into FAI, financial malpractice was discovered, likely involving violations of anti-corruption laws and harming 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 points to deeper problems, noting, for example, that 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 Barbados’ and Trinidad and Tobago’s export markets.
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breakeven point of 350 hectares required for profitable exports, noting that among the cases for the decline include an outdated irrigation system, the sale of unseaworthy containers and other company property at remarkably low prices, as well as salary increases implemented without the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.
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