Thursday, February 18, 2010

Belize Citrus Industry in a war over control of the Board of Directors!

** photo in top right hand corner of Dr. Henry Canton the controversial figure. He is also running the BNE oil company operations I believe? ( photo from Google Images - attributed to )

by Ray Auxillou

Banks Holdings two representatives have come and gone from Barbados to Belize. The two men represented their arguments over control of the Board of Directors of teh Citrus Industry, to the media in a television question and answer session. They saw the Prime Minister, Dean Barrow of Belize and they met with the leaders of the Citrus Growers Association.
Both sides at war with each other, over control of the Board of Directors of the Citrus Factory, the CGA and the Barbados Investment Bank had their say.
What did we the public get out of this as an understanding?
The Prime Minister has withdrawn from the controversy. His only stipulation, is that he will support the CITRUS Growers in their ONE MAN - ONE VOTE as stockholders.
The CGA own 51% of the shares of the company. The Investment Bank from Barbados holds 49% of the shares. In order to invest in the citrus factory, the Investment Bank insisted on control of the Board of Directors of the FACTORY. In return for this in a legal agreement, they put up $60 million to take care of the big pile of millions of dollars in debts the previous management of the CGA had run up, and was on the verge of BANKRUPTING the citrus industry and then existing factory. This factory back then, only shipped raw commodities and if the INVESTMENT BANK were to come in, they were going to make the industry profitable again. An agreement was signed giving the Investment Bank control of the Board of Directors and their choice of a CEO, which was Dr. Henry Canton.
Since that time, the new CEO Dr. Henry Canton, ( Investment Bank and at the time the CGA 400 growers choice ) has invested in diversification of the end product, in value added juices of different kinds of fruits. The citrus industry was modernized with a lot of new machinery and no longer sells raw citrus commodities, for another country to process and gain the profits from a value added juice product. The new juices are selling in Costa Rica, Guatemala, Trinidad, Jamaica, Barbados and Guyana. The new improved modernized citrus factory cannot keep up with market demand. The citrus industry can now sell all the product they can produce. This has just happened, but the bookkeeping, past debts, and such financials, have not yet had enough time to catch up.
The 400 or so small Citrus Growers Association want more money from the factory. The factory bookkeeping currently has RETAINED EARNINGS, an amount which is used to operate, maintain and re-invest in the factory. The bookkeeping shows the new factory is short of some $11 million in profits so far this year, to enable the issuing of a DIVIDEND to share holders. Indeed the Board of Directors controlled by the Investment Bank want to postpone the dividend payout until 2013 in order to put the new factory business on a solid financial footing. The CGA members want to dip into the RETAINED EARNINGS and pay the money out as a dividend NOW. Failing that, the CGA want the Board of Directors to BORROW a foreign loan from banks and issue a DIVIDEND now.
This is the same problem the CGA had when they owned the previous simple factory. The sucked out all the money in back payments to small growers and pretty much had bankrupted the citrus industry, saddling the previous factory with huge debts. The Investment Bank want to do this properly, slowly and build up reserves and make the citrus industry a long term profitable enterprise. Standing in the way is the INVESTMENT BANK choice of CEO, Dr. Henry Canton, who fully appreciates the money angle. He is the target the small 400 Citrus Growers are going after, because he will not give them the RETAINED EARNINGS, or BORROW a FOREIGN LOAN against future earnings for a DIVIDEND payout this year.
As a parallel example we have the same stupid management practice of the government of Belize by our two political parties. Consequently the nation of Belize is now over 90% DEBT TO GDP ratio. We are bankrupt, but neither political party will organize the country finances and operations on a solid financial basis. Instant gratification is the rule here in Belize. No common sense professionalism.
The two representatives of the Investment Bank returned to Barbados yesterday evening and a Board of Directors and annual shareholders meeting has been called for April this year. The only contentious point is that the CGA shareholders want to get rid of Dr. Henry Canton who is blocking them from sucking the new factory investment dry of money, before it can walk. Right now the Citrus Industry is still crawling. Dr. Henry Canton is not representing the small 400 shareholders they claim. The INVESTMENT BANK says he is doing his job which is building a solid factory and citrus industry and they are well satisfied with the business plan and performance, despite any fluctuations in the citrus market on the world price stage. Dr. Henry Canton has been charged with protecting ALL shareholders investment, both the CGA 400 shareholders, 51% holding and the Investment Bank 49% holding. His contract of employment is legal and binding and could fracture the factory and industry if he were fired and he sued. The Investment Bank refuse to do anything like this. In Belize, governments tend to break contracts, both verbal and written with impunity. This culture of disrespect for the law and investment has apparently filtered down to the 400 small shareholders of CGA.
The Investment Bank say they cannot replace Dr. Henry Canton with an equally capable person easily and that he is a KEY CEO, that has been instrumental in making the factory over into a modern and future profitable enterprise. It is obvious the CGA 400 growers want to ruin the factory before it is on a solid financial footing for the long term future. They want to suck out and spend money now, before there is availability. Personal greed and immediate gratification are their viewpoint and to hell with the future. That is my opinion as an outside observer.

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