PwC begins valuation of GuySuCo assets

– despite int’l firm facing ban, fraud charge in India

Despite being handed a two-year ban last week for allegedly overstating the earnings and assets of Indian software company Satyam Computer Services, the international audit firm Pricewaterhouse Coopers (PwC) on Monday commenced the process of evaluating the assets of the Guyana Sugar Corporation (GuySuCo).
According to the Special Purpose Unit (SPU), which falls under the National Industrial & Commercial Investments Limited (NICIL), PwC was selected from a field of the top four international financial services’ providers, and has for the last seven years been ranked as the most prestigious accounting firm in the world.
The agreement between NICIL and PwC was signed on Friday, January 12, 2018, and work commenced on Monday with meetings held between PwC and the SPU team at its La Bonne Intention offices.

PwC will hold its first meeting with the CEO of GuySuCo today, in order to carry out the valuation of all assets. In addition to the valuation, PwC is expected to provide other advisory and financial services.
Having met with the sugar company, SPU Head Colvin Heath-London has said he is encouraged that the SPU was able to get the PwC team in Guyana speedily. “With the current developments in the sugarcane sector, we are working to bring stability to the industry and affected communities as quickly as possible,” he explained.
Heath-London has said, “The work of PwC, given their vast experience in this type of process, will help all decision-makers to arrive at the best decisions for the assets of GuySuCo; for other businesses that are in the GuySuCo supply chain; and, most importantly, for the workers, who are uncertain about their future.”
Meanwhile, PwC’s Caribbean partner, Wilfred Baghaloo, has said he looks forward to the opportunity of working with the Government and people of Guyana to find a practical economic solution to the privatisation of the three sugar estates on a timely basis. While noting that this will be a challenging task, Baghaloo has said the PwC is equipped to ensure that the project is successful.
And while PwC will be tasked with ensuring a level playing field for all interested parties and stakeholders as the process goes forward, a report originating from international news agency Reuters and other news sites in India has claimed that PwC has been handed a two-year ban last week for allegedly overstating the earnings and assets of the Indian software company Satyam Computer Services.
The report states that PricewaterhouseCoopers was the audit firm at the time the more-than US$1 billion fraud occurred. It was the founder of the company, Ramalinga Raju, who blew the whistle on the fraud in 2009, costing shareholders billions and shaking the industry.
Besides the ban, Reuters said, the Securities and Exchange Board of India has handed down an order for PricewaterhouseCoopers Bangalore and two of its former partners to pay 131 million rupees, or US$2 million, plus interest, in forfeited funds. This must be done within 45 days, with the ban taking effect on March 31.
In its defence, PricewaterhouseCoopers is quoted as saying it would appeal the regulator’s decision in court. It has defended itself by affirming that there was no “intentional” wrongdoing in the fraud at Satyam.
When asked about this issue on Monday, Baghaloo said, “I cannot comment too much on this as the matter is subject to an appeal. In summary, the matter relates to a 2009 event relating to a specific company and a specific stock exchange. We continue to service our numerous clients in India, and we continue to enjoy their support and confidence. As it relates to the task at hand in Guyana, our long history of strong commitment to excellence, integrity, innovation and quality will continue.”
GuySuCo, which is saddled with billions of dollars in debt, is currently engaged in divesting its assets to get cash to meet its operational and other expenses. At the same time, Government is forging ahead with downsizing the industry, citing the economic feasibility of the sector.
At present, a Special Purpose Unit (SPU) is in charge of this process. That unit was first announced by Agriculture Minister Noel Holder when he presented to the National Assembly a policy paper on the future of the sugar industry. Some $130 million have been allocated “to provide for the establishment of a Special Purpose Unit to manage the reform of the sugar industry”.
In July, the Government had presented a supplementary request to tap the national coffers. The National Assembly has since approved the monies for the Unit.
At the time that monies were being approved for the SPU, Finance Minister Winston Jordan had said Government was unclear as to what it was looking to earn from the sale of the GuySuCo assets, since those assets had still needed to be properly evaluated.
PwC, which was awarded the$60 million contract, will lead the divestment process, including updating valuations of the assets of GuySuCo. PwC’s work on the GuySuCo project is expected to last eight months.