Chaudhry rubbishes Prime Minister’s ‘proof’

[10 Dec 2005, 10.30]

Opposition Leader Mahendra Chaudhry labled as “laughable” the so-called evidence the Prime Minister tendered as proof that Chaudhry had tried to obtain a commission from the India loan for the sugar reform project.

The Prime Minister who failed to meet a 72-hour deadline to tender an apology to Chaudhry or provide proof or his claims in and out of Parliament that the Opposition Leader had attempted to get a commission, yesterday furnished a letter written by Chaudhry two years ago as his proof.

In the letter to Charles Walker on 25 September 2003, Chaudhry puts in an expression of interest on behalf of the National Farmers Union to acquire government shares in FSC following Walker’s advice that farmers should take the equity since government wanted to divest itself of FSC shares.

Chaudhry contemptuously suggests Qarase is now scraping the barrel in order to establish a link between his allegation and the 2003 letter to Charles Walker.

The full content of Chaudhry’s letter is as follows::

“The Prime Minister’s so-called proof is laughable. He has still not provided any tangible evidence to substantiate his claim that I attempted to obtain a commission from the $86 million loan to FSC from the Exim Bank of India.

It is clear that having made wild baseless allegations, the Prime Minister is now desperately clutching at straws to try and validate his claims.

This is not going to save him from litigation. It shows why having made the allegations, he was so reluctant to furnish the so-called ‘evidence’ until I forced him to come up with ‘this’.

The Prime Minister claimed in Parliament and on TV that, and I quote:

“ The Hon Leader should confirm or deny that he and some of his colleagues have been attempting to get a share of the $86 million loan from the Exim Bank in the form of commission.”

Now, anyone with the slightest discernment will notice that there is nothing in the Prime Minister’s very lengthy statement that even remotely connects me to the $86 million loan from the Exim Bank.

There is absolutely no connection between the loan and a letter that I wrote to Charles Walker as chairman of the Prime Minister’s steering committee on sugar industry reforms that Mr. Qarase released to the media as his ‘proof’ that I tried to get a commission from the loan.

My letter to Charles Walker was written on 25 September 2003. The Prime Minister himself admits that he wrote to the Government of India, almost a year later, on 30 August 2004 seeking an $86 million loan to finance the sugar reform programme.

Where is the connection, Mr. Prime Minister between this letter and your allegations? Aren’t you scraping the barrel somewhat to try and establish a link?

Since the Prime Minister has released this innocuous letter written some 16 months before even the Sugar Technology Mission from India began its work here, let me provide some background to the letter.

I have nothing to hide. This letter was actually written at the suggestion of Charles Walker himself after a long discussion with me about FSC shares.

He said government was wanting to divest itself of its shares in FSC– they will be given away gratis. He himself suggested that farmers should have an interest in FSC and advised that I write to submit an expression of interest on behalf of the NFU.

The Prime Minister cannot now turn this around and use it as evidence of any thing underhand on my part.

As the largest union representing cane farmers, the NFU was naturally very concerned about the declining state of the sugar industry and FSC’s state of bankruptcy.

I have regularly aired my extreme anxiety about the deteriorating plight of the sugar industry both in Parliament and in the media, because of its adverse impact on cane farmers. This letter articulates that concern.

If the NFU were to take over shareholding in the FSC, then naturally we would explore every option of returning the Corporation to viability. I have always believed that FSC can be returned to profitability provided we have a
professional management and operations team.

To strengthen the Union’s bid for government shares, I then mentioned the possibility of employing an overseas company to takeover management of the FSC over a period of time to return it to profitability and to ensure it is run along commercial lines.

This was indeed what I had planned in 1999 as Prime Minister when FSC made a profit after two consecutive years of losses.

This is in view of the fact that the major problem in FSC was that it had been highly politicised since 1987 and appointments to top positions were made on political considerations rather than merit. As major shareholders we wanted this stopped.

Also, FSC had projected a staggering $200 million for capital works to upgrade its mills. As I stated in the letter, the NFU could not allow the farmers, already crippled by heavy debts and high costs of production, to be lumped with such a part of this huge debt burden as well.

We knew from information available to us that the upgrading could be done at much less and from within internal resources.

Hence, the suggestion that the work be undertaken by an overseas company “with impeccable records and state of the art technology”.

But I made it clear to Walker that a comprehensive proposal would only be submitted if government agreed to NFU’s purchase of shares, because of the huge cost outlays involved in such a project.

As it happened NFU’s bid for equity in FSC was refused, and that’s where the matter rested as far as the Union was concerned.

Mr. Anand Singh was asked to evaluate the proposal and assist with its implementation. But this was not needed following government’s refusal to sell its shares to NFU. This refusal was conveyed to us in a letter dated 6 November 2003.

Now, I see nothing underhand or controversial in any of this. It was a sound and completely legitimate business proposal on behalf of NFU, if it were to succeed in its bid to takeover government shares in the Corporation.”