The shamelessly embattled citrus industry, which has had years of disputes between the Citrus Growers Association and Banks Holdings, or the CGA and Henry Canton, is once again having difficulties. Farmers are not being paid for their weekly delivery of their oranges, since the beginning of this crop season, which began a few weeks ago.
The CGA held an emergency General Meeting on Saturday, February 2, where about almost 200 growers showed up to get an update from the executive what the problem is for them to be paid on a timely basis. It turns out that the problem is that there are audit reports to be done for the Citrus Products of Belize Limited, the company which buys the growers' oranges and produces the juices, and so the company's bankers have refused to release funds, which would then be used to pay the farmers to time.
The main speakers at the meeting were Eccleston Irving, the Chairman of the CGA; Henry Anderson, the CEO of the CGA, who also sits on the Board of Directors of the CPBL, and Denzil Jenkins, the Chairman of the Belize Citrus Growers Investment Company Limited, the growers' company which has a 51% majority shareholdings in CPBL.
Anderson was the first to take rostrum and explain to the growers the backstory to this problem. As his version goes, the issue started on August 12, 2012. At a Board of Directors' meeting that morning, it was unanimously decided that the current auditing firm, Panel Kerr Foster, was to be replaced as CPBL's bookkeeper since they had been doing the work for around 7 years. The decision was taken not as a vote of no confidence in the good work that PKF was doing, but as a good corporate practice to have a fresh set of eyes looking at the company's finances and inventory. Later that same day, there was a shareholders' Annual General Meeting where the same resolution was passed to replace PKF. The Finance and Audit Committee, a sub-committee of the Board, was tasked to put that resolution into action. The FAC, is made up of Henry Anderson, Julian Murrillo, and Richard Cozier. Cozier is the Managing Director of Banks Holdings Limited, the Barbadian Beverage giant which owns 47% of shares in CPBL, the largest minority shareholdings. The sequence of events which was recommended to get this new auditor in place was that the Board would put the issue to tender to the different qualifying firms, they would make a bid, and then an extraordinary general meeting would be called to appoint the firm chosen.
The FAC directed Kent Herrera, the Chief Financial Officer of the CPBL, as the person in charge of the tendering process for the auditor, and according to Anderson he dragged his feet to get it done, despite numerous reminders from Murrillo and him.
In August of 2013, a year after the resolution had been passed, it was still not done, Herrera reported back the 2013 AGM saying that he misunderstood the directions that he was supposed to send out the tenders because the BCGICL was doing due diligence of CPBL, to look at how the company was running.
In order for Growers to be paid their September 2013 payment, which still ended up being late, Herrera asked the AGM to allow PKF to be allowed to conduct the price formula audit, one of the two audits required, and that was approved in the interest of time. The company was, at that time, under duress to produce their audited financial statements in order to access funds for the next season.
According to Anderson, Herrera reported back via email later on in September, of the 4 firms eligible to make an offer only PKF had responded. Anderson's opinion was that while PKF meets the criteria, a tender from that time should not have been accepted, since the resolution was that they were to be changed completely. He says that at that time, Richard Cozier started to backtrack on the replacement of PKF. Anderson and Murrillo insisted, since it was a unanimous board/shareholders' decision, and then the Baker Tilly Hulse firm was engaged to be set in place. Anderson's recount of the events ended that because there was foot-dragging by the CFO, and a reluctance to move ahead by BHL's Richard Cozier, the statutory audit for CPBL was never done, and as a result, the bankers refused to release the funds.
After the attendants discussed the events which led up to this problem for the citrus growers for over an hour or so, John Woods, an attendant of the emergency meeting, put a motion to the floor. Woods commented that the real problem here, which has supposedly always been a source of in-fighting in the industry, is that Banks Holdings owns shares. His motion was that the CGA agitate to buy back the shares that Banks Holdings own so that the company could no longer exert influence on the citrus industry. That was unanimously supported by the growers present, and the motion was passed into a resolution. The short-term resolution from the growers was that the CGA takes steps to get Baker Tilly Hulse in place so that the audits can be done to appease the banks so that funds can be release to pay them in a timely manner.
So, that’s where it is at right now, the farmers want to eject Banks Holdings from Belize’s Citrus Industry, and they are seeking the assistance of the Government of Belize to do it. Reports to the growers are that Banks Holdings would consider selling their shares if the right offer was made, and so they intend to try to make an offer.
So, if Henry Anderson’s account is to be taken as completely factual in terms of the events which led up to the non-payment of the growers, the blame rests with Kent Herrera the CFO of CPBL. He has given a brief response to the media saying that while he has not heard the allegations against him directly, he denies that this problem is his making. He said that the audit tender process was strictly a board/shareholders’ decision, and he was still waiting on the permission to move forward with the process as best as possible.
He has also been criticized by the CGA for supposedly not following up properly with the clients of the CPBL who owe the company a total of some 10-12 million dollars in receivables. The reasoning is that if the company was collecting what was owed to it, then it would have cash in hand to pay the farmers to time. He also denied that saying that the company has been collecting and follow up with the clients. Herrera said that it is the practice of the company that each of their clients has a running balance where payments are made regularly and more product is bought on credit.The Guardian