…Investment Agreement with Govt was not terminated
High-level meetings are being held in China with stakeholders of BaiShanLin International Forest Developers Inc (BIFDI), with a view of determining the fate of the Chinese logging company in Guyana and whether there will be any further investments locally.
This information was disclosed by Attorney for the embattled logging company in Guyana—Pratesh Satram.
He told Guyana Times on Sunday that the legal team is awaiting word from China on how to move forward with any representation. The meetings, he said, include members of the China Development Bank (CDB) and the executives of the Company.
The CDB’s involvement came after a US$60 million loan the logging company had secured from the bank, was placed in limbo when the Guyana Forestry Commission (GFC) pulled the plug on BaiShanLin’s Joint Venture Agreements here.
Guyana Times was also told that while the GFC has terminated the Joint Venture Arrangements BaiShanLin shared with five local companies, in addition to revoking its State Forests Exploratory Permit (SFEP), the investment agreement that had been inked between the company and government remains in force.
Should the Investment Agreement be terminated, BaiShanLin will be liable to repaying all of the fiscal concessions it had been granted over the years to the tune of billions—in addition to the $80 million the GFC claims it is owed.
The GFC on Tuesday last announced that it was moving to repossess concessions held by BaiShanLin.
Guyana Times has since been able to confirm too that the Forestry Commission had also in the previous week, written to five companies affiliated with BaiShanLin, terminating the Joint Ventures that the companies had effected with the Chinese logging company.
Each of the companies had held Timber Sales Agreements (TSAs) which BaiShanLin used in order to extract and export logs from Guyana since its SFEP disallowed extraction from its concession.
Based on documentation seen by this publication, on September 1, 2016, the GFC wrote to the five companies with whom BaiShanLin had entered into Joint Ventures, informing them that the arrangement had been terminated, since the Commission had not been informed ahead of time of a transfer of shares.
Each company was told to remove any equipment it had on the more than 400,000 hectares of forest within 90 days.
BaiShanLin has since secured the services of Satram and Satram Law Firm and the attorneys are now questioning the action taken against the five companies since none would have made or reneged on any commitments to the government or the Forestry Commission.
Satram had told Guyana Times on Wednesday that the US$60 million loan taken by the Chinese logging company from the CDB was under threat, since the shares BaiShanLin would have acquired in the local companies had been used as security against the loan.
The matter has also engaged the attention of the Chinese Embassy in Guyana, since it was approached for assistance by BaiShanLin.
According to letters issued to Haimorakabra Logging Co Inc, Kwebanna Wood Products Inc, Sherwood Forests Inc, Wood Association Industries Company and Puruni Woods, they had violated provisions in the Forestry Act when they failed to inform the Commission of a transfer of shares, hence the decision to terminate the arrangement.
In making the announcement of repossession, the Commission said: “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.
“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,” it declared.
None of this however, had been communicated to any of the five companies and according to the Attorney this publication spoke with, the GFC has not been formally responded to, but the matter would be vigorously defended in court.
BIFDI was incorporated in September 2006 under the Guyana Companies Act 1991 with the main objective of timber harvesting and establishing downstream wood processing operations in Linden.
To date however, BIFDI has failed to fulfil many of its commitments to the Government of Guyana, reneging on the obligations it made, which were accepted in good faith, according to GFC.