Over the years, we've told you quite t a lot about the on-going dispute in the Citrus Industry. It has always been the Citrus Growers Association against Banks Holdings, or against Henry Canton. Well, the recent financial troubles facing the growers have been laid at the feet of Banks Holdings.
The 2014 season started earlier this month, but the farmers haven't been paid to time for the deliveries of their oranges. The CGA executives say that CPBL is reporting that they don't know when they will be able to pay the farmers. According to the CGA, CBPL is delaying because there is an outstanding audit and no auditor secured to look at the books, so, the banks have frozen their accounts. No accounts mean no money to pay the growers, and it may continue like that indefinitely.
With the assistance of our Colleagues from KREM News, we bring you coverage of this weekend's emergency general membership meeting of the CGA. Daniel Ortiz Reports:
Daniel Ortiz reporting
About 200 farmers gathered at the CGA compound outside of Dangriga Town for an emergency General Membership Meeting.
It was to discuss the fact that CPBL was not was not paying growers for their oranges. The CGA executive said that the farmers were owed around 1 million dollars, which at this point stands to increase at a weekly basis.
Eccleston Irving - Chairman Management Committee, CGA
"The meeting this morning is a gathering of growers and really it is an emergency one as we know that what occurred is that for the first time in history in starting our crop there is a situation where growers cannot get their payment. And what came to the association in the communication was that growers will not get payment indefinitely as such if you want to put it that way and it was then that the association went into action. Our first task was to see the minister as the lead regulator and the control board chairman Mr. Alpuche."
The reason, as explained by Henry Anderson, the CEO of the CGA, who also serves as a board member on CPBL, is that the farmers and the shareholders passed a resolution to change their auditor from the Panell Kerr Foster firm, which has been keeping the CPBL books for over 7 years. According to Anderson, the CFO of CPBL never took the steps to engage the prospective firms to replace PKF.
Henry Anderson - CEO, CGA/Board Member, CPBL
"On August 12th, 2012, there was a board meeting of the board of CPBL in the morning. At that board meeting the board infamously agreed, all 9 directors agreed that we would change auditors. Panel Kerr Foster (PKF) had been the auditors for going on 7 years and it was felt as part of good governance to give it a change and to get new eyes to come in and look at the books. In the afternoon, there was the annual general meeting; several people who were present here were at that meeting. When the vote was taken all present voted to change the auditor. That was August 12th, 2012. Nothing happened in October, September, November and December. January 24, we are having another board meeting of CPBL. In the morning the sub-committee of the board (finance and audit committee) had a meeting. The committee is made up of 3 people; Mr. Richard Cozier who is the managing director of Banks Holdings Ltd., Mr. Julian Murillo who was appointed by CGA's Investment Company and myself. Mr. Cozier chairs the committee."
Anderson says that there was foot dragging to put the issue out to tender to get a new auditor. That's until September when the Chairman of the Finance and Audit Committee, Richard Cozier announced that PKF, the same auditor that is to be changed, is the only firm supposedly willing to be hired to audit the company. The issue was pressed, since it's a board and shareholder's decision, and, under duress, the FAC engaged the Baker Tilly Hulse Firm. By that time, the CPBL Bankers informed the committee that they will refuse to release funds until an audit is done.
Henry Anderson - CEO, CGA/Board Member, CPBL
"First Caribbean Bank and Heritage Bank express their dismay because by contract we should give them the audit at the end of December and I believe FCIB have said well they won't release funds until they know that an auditor is contracted. So that where we are today. Part of the reason to call this meeting, emergency as it is, was to have a dialogue with you the growers so you could decide whether you want the ground to held and have new eyes to go and check those books; whether you want to be paid and you don't care about that or whether you say you know what, something funny is going here for too long."
Discussions among the membership went on like that for over an hour, trying to find out where the problem is, and who is to blame. And, then this motion was put to the meeting.
John Woods - Attendee
"Listen, I mean, I hear all of this stuff and we are all wasting our time. The problem is we are the majority shareholder of this company and we should take over the management of it right now. The only resolution I am going to support today is to remove those people out of there. Whatever you have to do get rid of your manager, get rid of Banks out of the thing one time. If we solve this problem with the auditor it's just a thousand more problems - you'd be having meetings everyday over and over. We have fruit, we have big problems with greening, we have big problems of being able to fertilize, fight the weather and all of that kind of stuff and actual processing. They are not allowing you to see anything. We have no control over what we are doing here and if that agreement was never authorized by CGA to begin with we are wasting time. Come on man let's take over the bloody thing right now."
Anthony Chanona - Attendee
"We need to get the government to help us, put some money, firm up an offer and buy back this company. That's the only way to do it."
That's for the long term, but the immediate concerns are that Baker Tilly Hulse must be engaged to conduct the audits so that the banks can release funds to pay the farmers. CGA says that paying the farmers weekly for their orange deliveries should not be any problem, even without access to the funds from the bank.
Eccleston Irving - Chairman Management Committee, CGA
"Man, if a company has 12 million in receivables, squeezing our juice and selling it properly, we shouldn't have a problem with getting growers been paid. What is the amount for growers to be paid? The first week was $500,000 for all growers including CPBL the company. The second week is $900,000; we see the amount of money in terms of receivables and what is going up. So we believe that this is contrived just to have chaos in our industry and to really sabotage our industry."
Farmer
"We have delivered our fruits more than 2 weeks ago and then some of us still can't get paid. If they are holding our money - all the time they are holding it why is it that they can't pay interest? We want interest with our money since they are keeping it."
As you saw in our story, the CGA claims that the Banks Holdings, which initially supported the change of the Auditor, has backtracked and increased the confusion and loss in confidence amongst the bankers of CPBL.
Today, 7News contacted Kent Herrera, the Chief Financial Officer of CPBL who the CGA blames as the one who is central the foot dragging to replace PKF. He refused to respond to the allegation directly; He told us that the auditor issue is a board/shareholders' issue that is out of his hands, and he is still waiting for the green light to move forward on that.
On the matter of the 10 - 12 million dollars in uncollected receivables from last season, he categorically denied that saying that CPBL has a solid system in place to collect the money that is owed. He added that the nature of the business is to have a running balance with their buying partners.
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