Tanteak for sale… again
Loss-making State company, Tanteak is back on the auction block.
Government is making yet another effort to sell Tanteak, officially known as Trinidad and Tobago Forest Products Company Limited; a company which has not been in operation for the past seven or eight years.
On Sunday, there were advertisements in the newspapers for auctioneers to sell Tanteak’s assets.
The company, which was formed in 1978, racked up losses of around TT$84 million, over the years, and was plagued by corruption and political intrigue.
In fact, Tanteak might have contributed to the demise of the United National Congress (UNC) administration in 2001.
The then government had agreed to sell the troublesome company to the C.L. Financial Group but this was stymied by Attorney General Ramesh Lawrence Maharaj, who also prevented the sale of Caroni Limited’s prized Rum Division to the conglomerate.
Political observers believe that Maharaj had inside knowledge of Clico’s unhealthy dealings and a sixth sense that the C.L. Financial Group was heading for trouble. In fact, he did give a hint of Clico’s affairs back then.
All of this angered Prime Minister Basdeo Panday, a close friend of Lawrence Duprey, C.L. Financial’s chairman.
Billionaire Duprey had appeared on UNC election platforms, had ploughed money into the party and later revealed that he had given one of Panday’s daughters a million dollar scholarship.
Matters came to a head when Maharaj was sacked and the strained relations with his boss led to a snap general election in 2001 – and the rest is history.
Several unsuccessful efforts were subsequently made to off-load this State enterprise which was involved in the harvesting and sale of teak and pine from Government’s extensive plantations.
By 2000, Tanteak had accumulated losses of $82.8 million. Government provided a cash transfusion of $30 million in 1999 to pay the company’s bills which included wages and salaries for a work force of 231 which was enthusiastically represented by three unions.
The accumulated losses eroded the company’s equity and made the company insolvent with liabilities exceeding equity by almost $29 million.
In 1999, one board member resigned after he was confronted with serious allegations of financial impropriety involving a foreign company. The chairman of the board also jumped ship.
Tanteak sought approximately $100 million from the Panday Administration to restructure the company so that it could be profitable but the UNC felt that it made no sense trying to throw good money after bad and decided to divest the company.
C.L. Financial was chosen and this might have been a prudent decision as Duprey planned to refinance Tanteak and to revitalise Government’s 8,000 hectares of plantation teak -the largest in the Western Hemisphere- and 4,000 hectares of Caribbean pine using Finnish silviculture technology.
The fact is that Duprey’s Guyana-based lumber company, Star Lumber, for some time had a strategic relationship with Tanteak, supplying it with several species of hardwood.
Tanteak’s output would have been primarily utilised for his housing development projects here, in Antigua and South America. This, obviously, made business sense.
The UNC Government did not purchase any of Tanteak’s products for any of its construction projects including the billion Piarco Airport Terminal project, despite a policy decision to provide the company with business.
“Well, we were a scrunting outfit and didn’t have any money to bribe anyone”, a former official explained.
Worse: the Minister of Agriculture, contrary to the original concession agreement which decreed Tanteak as the sole entity to harvest teak and pine on State plantations, modified the agreement and brought in private saw-millers and gave them plum contracts.
This has severely damaged the plantations as there is no replanting and little or no mature trees, which take over 40 years to reach that stage, remaining.
Tanteak has languished all these years with no staff- workers were retrenched seven years ago and they have taken the Government to court. The $24 million sawmill, other machinery, equipment, trucks and other vehicles have been rusting. These assets which are for sale will be all but worthless.
Jerry Hospedales, former head of the Divestment Secretariat who was the first executive director of the Unit Trust Corporation in 1982, has been chairman, all these years, of a non-functioning company.
Industry insiders believe that there are two or three big sawmillers who will buy what is left of the Carlsen Field company- if there is anything of practical value remaining.