Citrus growers take action on audit

By Aaron Humes Freelance Reporter

Members of the Citrus Growers Association (CGA), meeting at their headquarters on Saturday, agreed to allow the Association’s members on the Finance and Audit Committee (FAC) of the Board of Directors of Citrus Products of Belize Limited (CPBL) to settle a festering dispute over the appointment of an auditor to look over the citrus producer’s books.
Overdue audits of the holding company for the seven companies that produce, manufacture and distribute citrus-related products from the Cayo, Stann Creek and Toledo District, have resulted in growers falling behind in receiving payments (an average of a million dollars per week) for their delivered boxes of oranges and grapefruits. CPBL is owed some $12 million for previous sales, according to chairman of the CGA Committee of Management, Eccleston Irving.
However, CPBL has been refused finance by its main banking partners, First Caribbean International and Heritage Bank, because its board has to date been unable to settle a dispute that dates back to the last annual general meeting of the company in 2012. It is also subject of a lawsuit in Puerto Rico, has been accused of authorizing payments of over six hundred thousand to management and recently lost two hundred thousand drums of concentrate from one of its factories.
According to CGA chief executive officer Henry Anderson, minority CPBL shareholders Banks Holdings Limited (BHL) of Barbados and majority partners the CGA Investment Company Limited (ICL) agreed in October of 2012 that the auditor would be changed over from Pannell Kerr Forster (PKF) Belize, which had held the post for seven years. There are only three internationally-recognized firms operating in Belize that could also be considered: Baker Tilly Hulse, Horwath Belize and Steven Moores.
Growers were told in Saturday’s “consultation session” that despite being repeatedly being directed and asked to send out tender applications by himself and fellow FAC members Julian Murillo and Richard Cozier, chair and BHL representative, CPBL’s Chief Finance Officer Kent Herrera dallied for more than a year until August of 2013, when he belatedly reported to Cozier that only PKF Belize had responded. Steven Moores indicated future interest; Horwath none, and Baker asked to come down to look into the matter and when satisfied offered a quote that was rejected at board level by BHL representatives concerned about high expenses, and moreover, were now backtracking on any decision being made to change auditing firms.
But with the pressing issue of the opening of the 2013-14 crop and upcoming audits for Banks itself, the FAC agreed to engage Baker and as the situation now stands, negotiations led by Mr. Murillo are ongoing. Asked to endorse that course of action, growers reluctantly did so; Anthony Chanona, a long-time voice in the industry, sought to have a fall-back compromise ready if negotiations failed by allowing PKF to complete the statutory audit (they were already engaged for the first audit) and have Baker come in for a three-year period thereafter but his view was rejected as having unnecessary risks of its own.
For growers, it is one more example of the non-existence of trust on either side that has landed them in an ugly war that, it now appears, can only end with the buyout of Banks’ 46.5 percent stake in CPBL. Negotiations to that end are also ongoing.
Grower John Woods, former chairman of Kolbe Foundation and former CEO of the Central Prison, said a resolution is desperately needed – not a moment too soon. “The only resolution I am going to support today is to remove those people out of there. Whatever you have to do get rid of your manager, get rid of Banks out of the thing one time. If we solve this problem with the auditor it’s just a thousand more problems – you’d be having meetings everyday over and over,” he stated, arguing that with all the problems the industry has, anything other than a buyout is a waste of time.”
That view rather eloquently summed up the frustration of the growers, now at boiling point after years of fruitless approaches to Banks. In an extended exchange, representative of a citrus-growing family Dr. Geoffrey Frankson and CEO Anderson, along with CGA Director Denzil Jenkins who also sits on the CPBL board as an ICL representative, argued over whether CGA did enough to advance its position.
Anderson told Dr. Frankson, a noted economist, that he was approaching the problem from the angle of expected business practice, but noted that such practices are not expected in their dealings with Banks. He added that if one wants to experience “Hell,” one should become a member of the CPBL board, as there is not a shred of cooperation between the two parties, even to appoint a chairman. ICL as majority shareholder had tried to oust CPBL CEO and director Henry Canton in 2010 to no avail; any attempt to move Herrera or to try to take over the factory would not be looked on favourably and might lead to the banks moving in for receivership.
CPBL posted a modest profit in 2012 after years of losses.
Prominent grower Eugene Zabaneh cited the source of all the drama as the “one-sided” Investment Agreement signed in 2006, which he maintained should be scrapped or challenged in court. He later added that if the Association needed Government interest to secure a buyout deal, the Social Security Board is an option. Initial prices for the buyout are in the range of sixteen to twenty-one million Belize dollars.
The battle with Banks has led to a severe split in the industry, with some larger growers, under the umbrella of Belize Citrus Mutual, advocating for making that split permanent and dividing the two factories located in Pomona and Alta Vista that receive growers’ fruit. The CGA is insistent on maintaining the unity of the industry.
The meeting also heard from smaller growers who wanted answers as to their place in the industry, particularly over the benefits of “value-added” projects such as orange oil, pulp and organic citrus feed being produced by CPBL’s operations and from a political aspirant, Delroy Cuthkelvin, who has been enlisted as a go-between with the Government (he is running for the United Democratic Party in a contested convention in Stann Creek West).
The CGA is also getting a boost from the Belize Sugar Cane Farmers Association (BSCFA), who recently forced a compromise with Belize Sugar Industries (BSI) on the issue of payment for bagasse. Vice-Chairman Alfredo Ortega, who along with chairman Leonardo Cano and Arturo Olivarez attended Saturday’s meeting and rallied the citrus growers to maintain unity, support their leaders and not trust the Government and politicians too far.
Ortega stated, “We ought to remember that in Belize, our politicians are not taking care of us the farmers. They believe that the farmers have no value; they believe that we as farmers are ignorant and don’t have the opportunity to stand up or to sit down around the table where our higher politicians sit down and eat. But we are Belizeans just like them. It is we who vote them in. So, it is in our hands to put the power on our people. Gentleman and ladies, it is time for us to look for respect”.
The meeting adjourned around 3:00 p.m. and a tentative deadline of mid-February has been set to complete the delicate negotiations.

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