Int’l firm selected to valuate GuySuCo blacklisted

– fined, handed 2-year ban by regulator for alleged fraud in India
– NICIL says firm to commence work in Guyana shortly

By Jarryl Bryan

PricewaterhouseCoopers, the international audit firm selected by the coalition Government to valuate the multibillion-dollar assets of the Guyana Sugar Corporation (GuySuCo), has actually been banned from auditing listed companies in India owing to its alleged involvement in fraud.
According to a report originating from international news agency Reuters, and other news sites in India, the company was handed the two-year ban last week for allegedly overstating earnings and assets for Indian software company Satyam Computer Services.
The report states that Pricewaterhouse was the audit firm at the time the more than US$1 billion fraud occurred. It was the founder of the company, Ramalinga Raju, who blew the whistle on the fraud in 2009, costing shareholders billions and shaking the industry.
Besides the ban, Reuters said the Securities and Exchange Board of India has handed down an order for Pricewaterhouse Bangalore and two of its former partners to pay 131 million rupees or US$2 million, plus interest, in forfeited funds. This must be done within 45 days, with the ban taking effect on March 31.
In its defence, Pricewaterhouse is quoted as saying it will appeal the regulator’s decision in court. It has defended itself by affirming that there was no “intentional” wrongdoing in the fraud at Satyam.

In Guyana
While PricewaterhouseCoopers is facing blacklisting and fines in India for its purported involvement in fraud, the firm may very well commence its work at GuySuCo as early as this week.
This is according to National Industrial and Commercial Investments Limited (NICIL) Chief Executive Officer (CEO) Horace James. During an interview with Guyana Times, he related that Expressions of Interest (EoIs) have been received from local and overseas bidders for the estates.
“Three companies submitted proposals. After a financial and technical review, we selected PricewaterhouseCoopers as the persons to do the audits for the divestment. They should be on board by next week (this week). They will audit the three estates and they will also (evaluate) expressions of interest from all over the world, local and overseas, for the three estates.”
James also informed this publication that an assets register was currently being used as a baseline to determine what assets were in place on the estates.
Government has long made known its plans to close the Enmore and Rose Hall Sugar Estates, sell the Skeldon Sugar Factory, reduce the annual production of sugar, and take on the responsibility of managing the drainage and irrigation services offered by GuySuCo.
GuySuCo, which is saddled with billions of dollars in debt, is currently engaged in divesting its assets to get cash to meet its operational and other expenses. At the same time, Government is forging ahead with downsizing the industry, citing the economic feasibility of the sector. At present, a Special Purpose Unit (SPU) is in charge of this process.
That unit was first announced by Agriculture Minister Noel Holder when he presented a policy paper to the National Assembly on the future of the sugar industry. Some $130 million was allocated “to provide for the establishment of a Special Purpose Unit to manage the reform of the sugar industry”.
In July, the Government had presented a supplementary request to tap the national coffers. The National Assembly has since approved the monies for the Unit, headed by Colvin Keith-London, who will be based at the Kingston Headquarters of NICIL.
At the time monies were being approved for the SPU, Finance Minister Winston Jordan had said that Government was unclear as to what it was looking to earn from the sale of the GuySuCo assets since they still needed to be properly evaluated.
As such, some $60 million was approved to hire an accounting firm, in this case PricewaterhouseCoopers, in order to lead the divestment process, including updated valuations of the assets.