The Chief Executive of the Fiji Sugar Corporation Abdul Khan who handed in his resignation to the FSC Board of Directors during its meeting yesterday (Wednesday 19th October) must only immediately vacate his position to allow for an independent and thorough investigation to be carried into his handling of operations of the Corporation for more than five years.
Mr Khan’s resignation must not come into effect immediately but until after the completion and outcome of independent investigations. He should only step aside now to ensure independence of the investigation process.
Relinquishing his position immediately with several questions remaining unanswered about both his and the FSC’s performance and the Corporation’s lack of direction during his reign is unacceptable and against good governance in a organisation in which taxpayers have a stake through majority ownership byGovernment.
The performance of FSC’s mills, questionable projects and the one-man handling of both FSC and marketing of sugar cannot be tolerated by cane growers any longer. The industry has now lost every fibre of transparency and accountability. This has now become intolerable.
Annual Reports of four years from 2011-2014 show FSC is technically insolvent and its liabilities are more than $225 million to the combined value of FSC’s assets.
In Mr Abdul Khan, FSC has had a CEO who as Executive Chairman did not hold the Corporation’s AGM for four years until May last year. He was a Board Member from October 2009 till December 31st 2010. From 1st January 2011, he was FSC’s Executive Chairman enjoying hefty salary, perks and privileges while FSC’s debt continued to rise astronomically. The AGM for 2015 has not been held more than 10 months after the end of the year.
There have been many allegations labelled against Mr Khan especially about his salary, perks and privileges. Appointments are allegedly not based on merit. The procurement of mill equipment from India is also highly questionable because it is extremely necessary to establish whether tenders were called by FSC. It is also very important to establish the amounts and types of equipment procured and whether all of it was solely used in the mills. And if not where is the remaining stock of the equipment?
Any shareholder in a company should be concerned, especially if it happens to be the Government, which is the largest shareholder and has pumped in several millions of dollars of taxpayer funds in loans and guarantees into FSC.
When announcing Mr Khan’s appointment as FSC Chairman, the Prime Minister and Minister for Sugar credited him for improvements to the industry.
But once again, this Government demonstrated that the appointment was to try and save the technically insolvent FSC at the expense of writing off its Government loans and subjugating cane growers through the Reform of the Sugar Cane Industry and Sugar Cane Growers Fund (Amendment) Bills, which have been totally rejected by growers.
Furthermore, his recent CEO appointment was seemingly part of FSC’s Strategic Plan that has never been revealed to the cane growers who are the largest and the most important stakeholders in the industry. They genuinely fear reduction in their income with change to the formula determining sharing of proceeds from sale of sugar from the current 70/30 in favour of growers.
Therefore the Fiji First Government had rewarded him with the CEO’s position.
If Government is really concerned about the viability of FSC, it should immediately authorise an independent investigation into the management and operations of FSC to determine the truth.
We re-iterate that Mr Abdul Khan should immediately step aside to ensure freedom and independence of the investigation process. But his resignation should not be immediate and only come into effect upon completion and outcome of the independent investigation process.
Authorised by: –
Hon Professor Biman Prasad