Minister To Review Past Management Decisions

The Minister for Sugar Charan Jeath Singh has for­mally written to the Office of the Attorney-General, seeking legal opinion on the acceptance of insurance pay-out made to the Fiji Sugar Corporation (FSC) in 2016.

Mr Singh sought advice against the decision made by the former FSC chief executive officer, Abdul Khan, and the then FSC Board to accept an insurance payout signifi­cantly lower than the initial claim following the damages caused by Tropical Cyclone Winston on Feb­ruary 20, 2016.

Mr Singh said the significant var­iance between the reported dam­age, the accepted payout, and the decision of the former FSC Board and chief executive officer was a major drawback to the sugar in­dustry which resulted in Rakiraki Mill to close down.

Minister for Sugar Charan Jeath Singh. Photo: Ronald Kumar

Background

In the aftermath of TC Winston, FSC, in collaboration with AON (FSC’s insurance brokers), en­gaged the services of Erasito Beca, a reputable engineering consult­ing firm, to assess the damages and prepare an insurance claims report.

A claims report was completed on September 11, 2016 which in­dicated a cost of $84,172,513 VEP ($91,748,039 VIP) and the same was lodged with Underwriters through Aon.

Despite the earlier recommenda­tion from Erasito Beca and AON which indicated a potential claim in the range of $65.0m to $100.0m, the FSC’s Board, in a meeting on August 24, 2016, agreed to accept a cash insurance pay-out of $35.0m, inclusive of deductibles.

Mr Singh has sent a copy of his letter, with supporting documents, to the Acting Commissioner of FICAC since there were previous complaints made about Mr Abdul Khan in 2016 regarding possible fraud and mismanagement of funds in 2015.

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