Tuesday, February 27, 2024
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Insurance fraud allegation against FSC board in 2016

The Minister for Sugar Charan Jeath Singh has called for a further investigation in the Cyclone Winston Insurance Settlement that was negotiated by the then Fiji Sugar Corporation CEO and Executive Chair, Abdul Khan and its board in 2016.

In a media conference, Singh said FSC had engaged a civil engineering consulting firm Erasito Beca, to survey the damages on the three mills, its rail networks and bridges, which would in turn allow the consultants to compile an insurance claim report.

Singh said the consultants conducted a comprehensive assessment and assessed the total damages to be $97 million inclusive of VAT – the same amount was submitted to AON Insurance, in September 2016.

He said that before the claims were settled, Khan approved a cash pay out of $35 million and with a deductible amount of $5 million.

The Minister questioned how the $35 million figure was rounded off when the Erasito Beca estimated the damages to be $97 million.

“… How did you pick a figure $62 million short of the estimate by the assessors?”

The Minister said in September 2016, FSC also signed an agreement of $37 million, still $60 million short of the insurance claim report.

Questions are now being raised why the settlement was negotiated in extreme haste.

“… In clause 8 of the Settlement Agreement with the insurance company, Khan had signed off all the rights of FSC, which forbids even the Government from disclosing the terms of this fatal agreement.”

“FSC current chair Nitya Reddy is looking into this matter in a more detail and will be sharing more details with Fiji. In our view, this was a most reckless and irresponsible failure of those, the then Minister Voreqe Bainimarama, FSC board – in terms of their oversight duties to the sugar industry owed to the industry and the people of Fiji.”

“… I have directed the FSC Chairman to investigate further into these matters and report back to me, leaving open the possibility of a formal inquiry,” Singh said.

FijiLive has sent questions to the former Minister for Sugar Voreqe Bainimarama and the Permanent Secretary for Sugar Yogesh Karan for comments.

Ilaitia Ravuwai
Ilaitia Ravuwai
Journalist | news@fijilive.com

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