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Singh seeks legal opinion on decision by FSC in 2016

The Minister for Sugar, Charan Jeath Singh is seeking the legal opinion of the Solicitor-General, on a decision made by the Fiji Sugar Corporation former Executive Chair and CEO Abdul Khan on the insurance payout shortfall that was approved by the board.

In a statement, Singh said Khan accepted an insurance payout that was significantly lower than the initial claim following the devastation caused by TC Winston in 2016.

Singh said the variance between the reported damages, the accepted payout, and the decision of the former FSC’s Board and Chief Executive Officer was a major drawback on the sugar industry which resulted in the closing of the Rakiraki mill.

“I have been briefed by the current chairman of FSC, Nitya Reddy, about the insurance payout and its acceptance. Also, I wanted to ascertain whether there was an issue of governance and accountability in 2016.”

“As the Minister Responsible, I am seriously concerned about the decision made by the FSC’s Board and the CEO at that time to accept the payout despite the recommendation provided by the independent engineering firm,” Singh said.

In 2016, Singh said FSC had engaged the services of Erasito Beca, a reputable engineering consulting firm, in collaboration with AON (FSC’s insurance brokers), to assess damages and prepare an insurance claim report following TC Winston in 2016.

A claims report was completed in September 2016, which indicated a cost of more than $91 million, and the same was lodged with Underwriters through Aon.

Despite the earlier recommendation from Erasito Beca and AON, FSC approved and agreed to a cash insurance payout of $35 million, inclusive of deductibles.

This was in August 2016.

Singh said this decision was further solidified when, in October 2016, Khan signed an insurance settlement agreement for a final payout of $37 million (including the deductible of $5 million).

The Ministry for Sugar has written a letter of the complaint to the Fiji Independent Commission Against Corruption to investigate its findings.

Ilaitia Ravuwai
Ilaitia Ravuwai
Journalist | news@fijilive.com

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