Hon. Qarase - Statement at Press Conference for Sugar Scandal
Dec 9, 2005, 12:00

Honourable Laisenia Qarase
Prime Minister and Minister for Fijian Affairs, Culture & Heritage, Minister for National Reconciliation & Unity; ALTA & Sugar Industry Reform


I have called this press conference to clarify and expand on certain issues connected with the continuing controversy over the sugar industry reforms. There is mounting public concern over this sorry business.

As the Minister responsible for the reform programme, I must say I am disappointed at the attempts by some people to exploit the sugar reforms for their own benefit.

What I intend to do is to establish the truth, including the involvement of Mr. Mahendra Chaudhry and his National Farmers Union.

Let me first deal with the claims by Senator Anand Singh that he was acting alone and on his own initiative in the commercial dealings he was involved with in India. He also said that he was not acting for anyone or any organization. Senator Singh has made the point that the FLP and NFU leader Mr. Chaudhry knew what he was doing in India. But, according to Senator Singh, Mr. Chaudhry had no role or direct involvement.

I now circulate this letter written by Mr Chaudhry to Mr Charles Walker, Chair of the Sugar Industry Reform Steering Committee.

I established the Committee following my announcement on 26th September, 2002 in the House of Representatives, of proposals by the Fiji Sugar Corporation to restructure the sugar industry. The Steering Committee, was to undertake consultations with all industry stakeholders on the FSC proposals.

The letter by Mr. Chaudhry is marked ‘confidential’, but the public interest demands that its contents be now revealed. (circulate copies of letter)

Please note that the letter by Mr Chaudhry was written on the National Farmers Union (NFU) letterhead. He was writing as NFU General Secretary.

I refer you specifically to the second last paragraph of that letter. Mr Chaudhry confirmed that Senator Anand Singh and United Consultancy of Auckland were representing him and the NFU. I understand that United Consultancy is Senator Singh’s company. Mr. Chaudhry said in his letter that he had instructed Senator Singh to continue with negotiations on behalf of the NFU. This establishes that Mr. Chaudhry and Senator Singh were working together.

I stress here that Senator Singh’s role as a representative of the NFU, and his commercial dealings in India, have been hidden from the public. Mr. Chaudhry has had many opportunities to make this known, but he chose to say nothing about it.

Other parts of the letter contain additional relevant information. Essentially, Mr Chaudhry was expressing interest in the NFU acquiring the Government shares in FSC.

If this happened, Mr. Chaudhry would ensure several things.

For example, he said that he intended to ensure that the FSC would operate on a commercial basis.

In conjunction with that, he also said (and I quote): “I have been in touch with an overseas company that may be interested to enter into a management contract.”

Mr Chaudhry further said; “this company has an impeccable record in milling”.

Together with the management contract, he intended to give a supervisory maintenance contract to the overseas company.

The questions, therefore, that should be asked are as follows:

i) in view of what Mr Chaudhry said in his letter, can Senator Anand Singh still say he was acting alone and that he was not appointed as an agent by Mr Chaudhry and the NFU?

ii) Can Mr Chaudhry continue to maintain that he had no direct involvement with what Senator Singh was doing in India?

iii) How could Mr Chaudhry make statements about a possible management contract and a supervisory maintenance contract with an overseas company, if he was not involved in negotiations with that company?

iv) What was the nature of the commercial dealings by Senator Singh, and which company was he dealing with in India?

Please note that Mr Chaudhry’s letter was dated 25th September 2003.

It was not until September 30th, that my Office sent a letter to the Indian High Commissioner to ask the Government of India to assist Fiji by sending its Sugar Technical Mission (STM). We wanted the STM to study our industry, and to make recommendations for improvements to the mills and cane production.

The STM Mission did not arrive in Fiji to conduct its work until the first week of December 2003.

It is clear, therefore, that the commercial dealings in India by Senator Singh, as agent for Mr Chaudhry and the NFU, were not with the Government of India through the STM. They were with a particular commercial company, engaged in the manufacture and supply of milling equipment.

I can only assume that Senator Singh initiated his commercial contacts in India following my announcement in the House of Representatives on September 26th, 2002 about the FSC’s restructure proposals.

The question then follows: what was the identity of this company? This question is answered in two communications.

The first communication was a letter from the Indian High Commissioner to my Office, dated 15 September, 2003. In that letter, the High Commissioner, Professor Chauhan, disclosed that the company was ISGEC.

Professor Chauhan referred to the visit to Fiji of the Chairman and Managing Director of ISGEC, Mr Ranjit Puri.

I acknowledge that Mr. Puri’s visit might have been arranged by Senator Singh.

But the point that was stressed by Professor Chauhan was that and I quote, “Mr Puri’s visit was from the private sector.”

Professor Chauhan made it clear that the Government of India could only be involved through its own Sugar Technical Mission.

Based on that advice from the High Commissioner, a formal request was then made through my Office on September 30th, 2003.

It was a request for the Government of India to send its STM to Fiji.

The second communication was a fax Senator Singh sent to Mr. JJ Bhagat, the leader of the STM, on 15th December, 2004. This confirmed that the commercial dealings by Senator Singh on behalf of Mr Chaudhry and the NFU, was with the ISGEC company, and not with the Indian Government and its agency the STM.

In this message, Senator Singh asked Mr Bhagat: “Have you any plans for ISGEC? Have you spoken to ISGEC about giving me more money?

Senator Singh mentioned that “Mr Chaudhry was going to Mumbai for Pravdini and that he has asked me to accompany him.”

Senator Singh then asked Mr. Bhagat: “Can an interested bidder pay my fares?”

Mr. Bhagat was advised by the FSC Chairman to reply that the STM could not be involved in such matters and that Senator Singh should direct his enquiries to the FSC Chairman.

Given all this information, does this not confirm that Mr Chaudhry was, through Senator Singh, involved in the commercial negotiations with ISGEC?

Mr Chaudhry himself confirmed in his letter to Mr Walker, that Senator Singh was his representative, acting for him and the NFU.

The fax to Mr. Bhagat also clarifies that Senator Singh was requesting payment for his services.

Any such payment should come from the ISGEC company. He was never engaged by the STM or the Government of India. It is, therefore, strange that he should be demanding some form of payment from the Government of India.

I now deal with other aspects of this unfortunate episode.

Mr. Chaudhry has deliberately distorted what I said in Parliament. I did not make allegations. I said the Leader of the Opposition 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 commissions.

I suspect that Mr. Chaudhry is twisting my comments to deflect public attention away from his own involvement with Senator Singh.

I should mention here, for information, that a commission is defined as a fee paid to an agent for providing services.

Now I draw your attention to the paragraph in Mr. Chaudhry’s letter of September 25th headed “the final proposal”.

There, Mr Chaudhry offers to submit a comprehensive proposal on the restructure of the sugar industry, including the acquisition of Government shares in FSC by NFU.

But he also asked to be invited to do this.

What this would have meant, is that if he was to submit a proposal at the specific invitation of Government, any costs incurred would be covered by the Government.

Since the proposals would relate to the reform and restructure of the sugar industry, the payment of a fee would eventually have to come from the financing of the reform.

Mr. Walker, for the Government, replied to that approach from Mr Chaudhry on 15 October 2003. Mr Chaudhry was informed and I quote “without commitment, I now formally invite you to submit to me your comprehensive proposals, the compilation of which will be at your cost”.

Mr. Chaudhry was also advised that Government had decided not to transfer its shares in FSC.

I can add that this decision was taken because we were not happy with the proposal by Mr. Chaudhry for the Government shares in FSC to be transferred exclusively to the NFU.

No proposals for the restructure were ever received from Mr Chaudhry, Senator Singh or the NFU. It was obvious that he had lost interest because the Government would not agree to transfer its shares to the NFU and that he would have to bear the cost of preparing a submission.

The point I stress is that Mr. Chaudhry wanted to be invited to make a proposal for which he would be paid. He was not prepared to do this simply for the sake of helping the industry.

Again, if a fee was to be paid, it would have come from the finance for the reform programme, which is the $86 million loan.

There is another issue of wider interest in the letter written by Mr Chaudhry to the Chairman of the Sugar Reform Steering Committee.

The proposal by Mr Chaudhry was for the farmers to acquire the Government shareholding in FSC. But he also made it clear in his letter that the transfer of shares by Government was to be exclusively to the NFU which, in his view, “provides the most convenient vehicle”.

In other words, shares would not be allocated for all the farmers and their representative organizations, including the Cane Growers Council and the Cane Growers Association.

The benefit was only to be to the NFU.

I now come to claims by Senator Singh that somehow the Government of India and, perhaps, the Government of Fiji owe him some payment.

From the information I have given you, it is clear that his dealings were strictly with a particular commercial company. It was a private sector entity - ISGEC. If he requires payment for the services he provided as part of a commercial contract with ISGEC, logically, he should go to that company.

The latest information we have received from Mr. Bhagat came in October this year. He complained that he had received “obnoxious” e-mails from Senator Singh demanding payment for services allegedly rendered. There were threats of legal action. This was clearly an attempt to put pressure on Mr. Bhagat in an effort to force some form of payment.

Again, I say that Senator Singh should do the right thing and make his demand to ISGEC, the company he was dealing with.

Senator Singh claims that he played a role in the special loan of $86 million which the Government of India agreed to provide through its Exim Bank.

I confirm that, like the arrangement for the Government of India’s Sugar Technical Mission to come to Fiji, the loan was negotiated on a direct Government-to-Government basis.

I have here for you, (circulate) copies of the letter I wrote to the Indian High Commissioner on 30th August, 2004. In that letter I formally requested the Government of India for a loan of $86 million to finance the sugar industry reform programme.

If Senator Singh was involved in any negotiations, as he claims, it was probably in connection with what is stated in Mr. Chaudhry’s letter of 25th September, 2003 to the Chairman of the Sugar Industry Reform Steering Committee.

On page 5 of this, Mr. Chaudhry said that if the farmers through the NFU were allowed to acquire Government’s shareholding in the FSC, “we (meaning the farmers through the NFU) intend to finance the operating budget of FSC through a finance programme from the farmers”.

He further said: “I am happy to advise that our associates have been in contact with their financiers. In the event of a favorable response from you, negotiations will commence for the extension of a line of credit to FSC to provide long-term finance to it at competitive rates for its capital programme".

The point to note, again, is that Mr. Chaudhry’s letter is dated 25th September, 2003. The Government’s formal request to the Government of India for the assistance of its Sugar Technical Mission was not made until 30th September, 2003. The STM Mission did not actually arrive in Fiji until early December, 2003. The Government-to-Government negotiations with India for a loan was not started until the Government of Fiji decided in February, 2004 to accept the STM’s recommendations as the basis for the sugar industry reform.

So, really, there is no basis to Senator Singh’s claims that he helped to negotiate the $86 million loan and should be paid for it.

Concluding remarks.
I trust the information I have provided has clearly established that Mr. Chaudhry and his National Farmers Union were directly linked with what Senator Singh was doing in India.
There were attempts to get fees from the sugar restructure.

Mr. Chaudhry and the NFU, appointed Senator Singh to be their representative. Mr. Chaudhry also made reference to an overseas company which might be given management and supervisory maintenance contracts.

One is therefore led to believe that Mr. Chaudhry was directly associated with commercial negotiations in India by Senator Singh.

I make another point. We have received information that the communications with the company in India from Senator Singh was through fax and e-mail from the Fiji Labour Party office in Parliament. This suggests that the involvement of Senator Singh was not just on behalf of the NFU. It was also with the full knowledge of Mr Chaudhry as the FLP leader.

One can only assume that the FLP leader had given him approval for the use of office equipment in the Office of the Parliamentary Opposition.

If Mr Chaudhry, as the Parliamentary Leader of the FLP, denies equipment in his office was used for communicating with the Indian company, I challenge him to allow the Auditor General to inspect all international communications to India from his office during the period 2002, 2003, 2004 and 2005.

Mr. Chaudhry has now taken legal action against me through the legal firm of Senator Anand Singh and his son, Mr. Rajendra Chaudhry. He wants me to apologise.

Mr. Chaudhry is exercising his legal right. I am prepared to defend myself in Court. Every statement I have made on this sordid saga, is in my capacity as Prime Minister and Minister for Sugar Reforms. In light of the disclosures about Mr. Chaudhry’s involvement, I believe he owes me as Prime Minister and Minister responsible for Sugar Industry Reform, and the people of Fiji, an apology for attempting to mislead the nation.

As for Senator Singh, I would advise him to go to ISGEC for the payment he is seeking. His fax dated 15 December 2004 to Mr. Bhagat plainly indicated that he had received some payment from that company. I invite him to give details of the beneficiaries of this.

Ladies and Gentlemen: I will now take some questions.