The Belize Citrus Mutual (BCM) has issued a press release entitled "Citrus - Where Are We Heading", whose sole purpose seems to be that of making a public appeal on an internal company matter, that is the termination of the employment of Dr. Canton as the CEO of the Citrus Products of Belize Ltd (CPBL). The release also seems to suggest that Dr. Canton, trained as an animal doctor, is indispensible as the only person who can capably manage the Citrus Products of Belize Ltd.
What is the Belize Citrus Mutual?
The Belize Citrus Mutual (BCM) is a private company owned notably by Henry Canton, William Bowman, Mike Duncker and Ernest Raymond. The Belize Citrus Mutual has as one of its objectives to acquire, own and operate a citrus processing plant. Furthermore, CPBL documents dating as far back as 2007 reveal that these same gentlemen, along with Banks Holdings Ltd., agreed to a plan for CPBL to resign its membership from CGA and for these gentlemen to start a new company/association to be called the Citrus Alliance Corporation. The sole aim of the new group was the destruction of the CGA so they and BHL can enjoy full control of CPBL.
Belizeans should recognize that the release from BCM is essentially an appeal to the public to save Henry Canton's employment as CEO of CPBL and to allow him to continue his personal agenda of conflict of interest to the detriment of CPBL.
BCM is a private company, part owned by Henry Canton, making a public appeal on his behalf. This same private company is desirous of acquiring, owning and operating a citrus processing plant. This is just one of the many examples of the conflict of interests that has come to define Dr. Canton's leadership style of his personal agenda before everything else.
Performance of CPBL
The release would suggest that with the appointment of Henry Canton as CEO and the Investment Agreement with Banks Holdings Ltd (BHL) the performance of CPBL has done well.
However, all of that changed with the consummation of the Investment Agreement in the 2007 fiscal year. Since the involvement of BHL, and especially over the past two years, CPBL has experienced a $27 million downturn in profitability to the point were retained earnings have been exhausted.
BCM asserts that the Investment Agreement as a Model for the Caribbean
Model for whom, certainly not the majority shareholder! From the perspective of the majority shareholder, the CGA under the then stewardship of the now owners of BCM, received only $US2.00 for giving up 46.5% of its stake in CPBL and with limited decision making powers of the majority shareholder. The Jane Longsworth Report clearly shows that BCGAICL lost some $23 million in equity at the outset.
Furthermore the business model allows for BHL to gain income by selling CPBL products in Barbados, selling BHL products to CPBL for resale in Belize, and through the receipt of dividends from CPBL. On the other hand, the majority shareholder can only earn a return from
CPBL if a dividend is declared. However, a dividend can only be declared if BHL so agrees. For the past three years no dividends have been declared.
BHL Showing Good Faith by Forgoing Dividends
BHL annual report for 2007 fiscal year shows that BHL enjoyed a sizeable increase in their net income of some $11.378 million most of which was attributable to the effect of the cheap sale price for which they bought into CPBL, based on their negotiations with Henry Canton, William Bowman and Ernest Raymond. The reason they could act in "good faith" was because they had purchased the premier juice source in the region at a fire sale price, which is locked and fully controlled, working in full alliance with Henry Canton
They deceptively commented on the debt the CGA owes to the European Investment Bank and the Social Security Board. The CGA has clearly made the point that the reason it had to look out for the best interest of its investment in CPBL is because it must make good on all its obligations.
Belizeans should know that the way the transaction was constructed resulted in the CGA giving up 46.5% of CPBL with control of CPBL and receiving only US$2.00 as consideration. At that time the growers were misled and believed that the EIB loan was a grant. Furthermore, what
BCM did not say, and now refuses to say, is that these monies were borrowed during the time when Ernest Raymond and William Bowman where the Chairmen of the CGA. They did not only gave away the industry but followed through of their plan to destroy the CGA be resigning
so as not pay dues. Henry Canton and BHL have now stopped payments from CPBL to CGA despite a Board resolution being in place. Finally, the CGA's financial statements are consolidated therefore that CGA will not show any profitability when its largest asset losses more than $ 10 million dollars annually.
Sale of Products Should be an Arm's Length Third Party Transaction
Just recently the CGA requested a new price submission from CPBL because there was an increase in world market prices but the new price submission proposed in return amounted to a reduction in price to growers.
This was the first time CPBL representatives ever, in the history of the industry that the price to growers was going down when the world market price was increasing. Even after it was made abundantly clear that it was recommended that CPBL does not supply product at such low prices, Henry Canton refused to accept the recommendation. It should be noted that Henry Canton took this decision to continue to sell at such a cheap price despite the company projecting to losing some $11.0 million dollars. It was only after the CGA had complained that Canton and CPBL did not supply the remaining product to this customer. It should also be noted that this same customer has 39% stake in a subsidiary of CPBL, Belize Cattle Feed Limited. The entity has invested $1.0m in equity, while CPBL has invested 2.5m in equity and has loaned the company $10 m dollars at a rate that is less than the group interest rate for CPBL.
We can only wonder if this sort of arrangement is why that entity has come forth in the media to justify why is was a good deal to buy product at US$0.98 per pound solid when the market was above US$1.18 per pound solid.
A citrus industry where the rights of all stakeholders are equally protected. Increased utilization of CPBL achieved through improving citrus productivity and the introduction of new juice crops such as passion fruit, mangoes and pineapple. A robust marketing arm will develop and establish our brands nationally and globally. The buying power of the industry will be leveraged to gel cheaper inputs for growers, assist with drainage of groves and the overall sharing of the costs to address plant health challenges that face the industry.
The latest press releases from the Belize Growers Citrus Association can be found here.
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