Tue | Jun 6, 2023

Gov't backs off plan to pull $2b CIB shares

Published:Friday | September 9, 2016 | 12:00 AMErica Virtue
Karl Samuda: What appears to be undeniable is that the shares are the property of the Coconut Industry Board.

The long-running attempt by the Government to capture shares held by the Coconut Industry Board (CIB) in Seprod has come to an end.

The Andrew Holness-led administration has backed off the scheme which was initiated by the previous administration to cash out the shares valued at more than $2 billion to provide budgetary support.

But Sunday Gleaner sources say having won that battle the board of the CIB is considering a proposal to gift $300 million as a peace offering to the Ministry of Industry, Commerce, Agriculture and Fisheries.

Karl Samuda, who heads the ministry, last week conceded that the Government has been convinced that the shares do not belong to the Government as was claimed by the previous administration.

"What appears to be undeniable is that the shares are the property of the Coconut Industry Board ... there is no information available to me at this time that suggests that the transfer of the shares to the government is imminent ...," Samuda told a Gleaner Editors' Forum last week.

Samuda would not say if the Government has arrived at this position based on advice from the Office of the Attorney General, but the sources say he is the third minister to have been given that warning.


The real growth


"Now the real growth of those shares has come from the expansion development of Seprod. The company grows and your shares become larger so you have that value. I have no argument with that," said Samuda.

The Government has targeted the cash-rich board for the money, which is equivalent to 75 per cent of the shares it holds in Seprod, on at least three occasions.

"They are too stubborn. The first time they came was during Omar's (Davies) time, and we told them that the shares did not belong to them. We sought to solidify that position through legal advice, but that didn't stop Peter (Dr Peter Phillips) from coming. And here this Government come again," said an official close to the CIB late last week.

In May at the annual general meeting of the CIB, board member A.A. 'Bobby' Pottinger had warned that they would fight to the bitter end to protect the shares which, he argued, belongs to the coconut farmers.

"We uncompromisingly will not bow to any pressure or effort to hand over any money to Government, because it is not ours to give," warned Pottinger then.

The Government had earned the ire of the coconut farmers following indications that it planned to sell 122.5 million or 75 per cent of the 163.42 million shares held in Seprod by the CIB.

That was expected to put some $2 billion in the state coffers. That was rejected by the CIB which made the counter-offer of a $300 million one-off payment.


Going forward


With the Government now satisfied that it has no ground to claim the shares the CIB official, who asked not to be named, said "we will be offering the same sum, and a proposal (on the way forward)".

Samuda last Tuesday told Gleaner editors and reporters that the way forward could include changes in how the boards operate.

"What is going to develop now is that we are going to pass the Jamaica Agricultural Commodities Regulatory Authority Bill, which will eliminate commodity boards. You will have one regulatory unit, designed to ensure that the quality of product that is shipped out of Jamaica, produced, etc, will be controlled by one body," said Samuda.

"But the marketing within each of the commodity groupings will be independently managed by the farmers and communities. So they will now come together as associations, and not as boards.

"They can form themselves into private associations. It is in the context of that new status ... that we will discuss with them the question of the shares."