– after company repeatedly fails to produce investor or plan to pay M debt
The Guyana Forestry Commission (GFC) has repossessed concessions currently being held by BaiShanLin International Forest Development Inc (BIFDI), since it has continued to fail to produce its proposed investor or a clear plan on how it intended to pay off an $80 million debt owed to the State.
The announcement was made on Tuesday by the GFC.
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It was reported earlier this year that the Long Jiang Forest Industries Group, a Chinese State-owned company, had acquired 55 per cent of the shares in BaiShanLin and had intended to fully take over the company in 2016.
Minister of State, Joseph Harmon had indicated following a trip to China that he had met with the Vice Director of the Company, Wong Dong Xu, along with officials of BaiShanLin, who had assured that the company’s officials would be in Guyana by May 2016 to complete due diligence for the takeover, and to satisfy and expand on the obligations of BaiShanLin to Guyana.
This is yet to obtain, hence the decision by the GFC to immediately repossess the forestry concessions held by BaiShanLin.
According to a public statement issued on Tuesday by the Commission, the decision came after the company “failed to deliver on agreed actions to introduce investors to the Commission and having been given time to prove that it had an acceptable plan to clear an approximately GY$80 million debt”.
The GFC said, in an effort to conclude the matter, representatives of BaiShanLin were invited to a meeting on April 8, 2016 to provide an update on its plans to clear the debt.
The Commission said during the meeting company representatives had indicated that BaiShanLin suffered financial constraints, which affected the establishing of the wood processing facility, and the company was engaging a new partner that would contribute significantly to its investment in Guyana.
The GFC Board said it was, at the time, assured of the financial strength of the new partner, who had committed to pay off the debt owed by the company to the Commission.
“To date, the BIFDI has failed to fulfil any of its commitments to the Government of Guyana, effectively failing on the obligations it made, which were accepted in good faith.”
As such, the GFC said, “In keeping with Forest Governance Practices, the GFC will be formally repossessing the concessions owned by the company and accelerating efforts to recover the debt owed.”
The Guyana Revenue Authority (GRA) in April seized a Lexus SUV bearing licence plate number PRR 2888 and a Nissan minivan with licence plate number PRR 3888 from the Chinese logging company after it had failed to pay import taxes for the two luxury vehicles.
Earlier this year, Natural Resources Minister Raphael Trotman indicated that Government was moving to up the ante in order to recover outstanding monies owed to the State.
The Administration had also banned the logging company from exporting any logs from Guyana until a resolution could be met.
BaiShanLin has repeatedly been accused of unscrupulous and sometimes illegal practices in Guyana’s forests and its export of logs.
When the company started its operations locally, it had also committed under its investment agreement to establish a US$100 million wood processing plant in order to engage in value added exports – this too was never built.
Government has also repeatedly over the years been accused of acting in collusion with BaiShanLin to flout Guyana’s laws in its operations.
The Chinese company has also been accused of contravening local laws to get around logging quotas by purchasing from small loggers and exporting those logs to China under their names.
BaiShanLin has, over the course of the years, been operating in Guyana benefiting from hundreds of millions in concessions, including duty-free imports for vehicles such as heavy-duty trucks and luxury vehicles, as well as cement, steel and fuel for its operations.
Over its years of operating in Guyana, the Chinese logging company had also extended its business interest into gold mining, transporting sand and stone, barge construction for transport of logs and quarried stone, duty-free imported steel sales, real estate, construction of residential housing, a government ministry car park and a shopping mall— Sunset Lakes.
BaiShanLin began its operations in Guyana in 2007.
