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FSC 'technically insolvent', says NFP leader

Kalesi Mele
Monday, November 20, 2017

THE National Federation Party claims the mammoth losses by the Fiji Sugar Corporation in the past two financial years portrays the corporation as "technically insolvent".

Prof Prasad claimed he had sighted FSC's annual report for the years 2016 and 2017 and it was evident the State's plans to steer the corporation to profitability were failing.

"FSC's 2016 annual report for the financial year ended May 31, 2015 shows an operating loss of $53.4 million, compared to $31.7 million loss for the previous financial year," he said.

"The 2017 annual report for the financial year ended May 31, 2016, shows an operating loss of $45 million.

"The 2016 report values FSC's assets at $254 million while its total borrowing stood at about $380 million. The 2017 report reduces the value of FSC's assets to around $199.5 million while total borrowing increased to over $421 million.

"This proves FSC is technically insolvent."

Prof Prasad said in the past two years Parliament approved a $322 million guarantee for an FSC credit facility with ANZ Bank.

He said guarantees and loans were necessary because the sugar industry supported the livelihoods of about 200,000 people.

"It is an exercise in futility to pump money into an organisation without knowing what happened to the previous injections of millions of dollars.

"Furthermore, nothing has been heard for a year about the supposed investigation of the operations of the FSC and that of the former executive chairman following his resignation last October."

Prof Prasad said the FSC board should be acutely aware of the new requirements of their accountability in accordance with the Companies Act.

He said discussions in FSC's AGM in Lautoka this Thursday would only be about "rhetorical solutions and pie-in-the-sky theories".

He said unless and until Fiji could produce four million tonnes of cane and manufacture 400,000 tonnes of sugar, the industry would not be viable and FSC would remain a burden to the taxpayers of Fiji.

"We must, as a matter of priority, provide incentives to growers to produce more cane. And the best way to do this is to provide them a minimum guaranteed price of $100 per tonne of cane."

FSC chief executive

officer Graham

Clarke said he was not in a position to discuss the corporation's financial position with the public.

"What I can say is the reports will be tabled at the meeting next week to our shareholders and they will be the ones discussing the company's position," he said on Saturday.

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