FHL managers survive 'no confidence' scare

November 02, 2009 01:36:20 PM

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The management of Fijian Holdings Limited has endured calls for their resignation over the failed purchase of BP Southwest Pacific.

The matter dominated much of the discussions at the company's annual general meeting at the Holiday Inn in Suva on Friday. But in the end shareholders gave their backing and urged that extra caution be taken on future deals.

FHL spent $3.7million on the deal before pulling out in July this year when it could not secure funds.

The meeting heard that $1.65m was spent on consultancy and legal fees, $795,000 for airfares of FHL directors and consultants when they were seeking funding from India, and $300,000 on bank charges.

About $530,000 was spent on the 14 employees of the Hindustani Petroleum company that were to manage BP Southwest Pacific but were already based in Fiji while negotiations continued.

FHL management expected to reap healthy benefits from the $190m deal while certain shareholders cringed at the risk of taking on such a relatively large investment.

“You have failed us in this deal,” said shareholder Colonel Sakiusa Raivoce while questioning the decision of FHL management.

“Why should we get overseas consultants when we have experts locally, like Jo Marr and Saimoni Lutu and others….they know things about oil!

“Is this the end of the $3.7m? You should step aside if you can not do this deal. This is money we have worked hard at.”

The mood at the packed Lali Room at the Holiday Inn was tense while many seemed embarrassed by the sudden turn of events. FHL chairman Isoa Kaloumaira and managing director Sereana Qoro managed a dry smile as they sat facing the company’s owners.

Col Raivoce asked if the management team will be investigated and informed the meeting that he has already lodged a complaint with the Fiji Independent Commission Against Corruption.

“You will be investigated, if not by this government, the next government will,” he said.

Qoro, however, assured that the “BP Oil is not over” and that they were having discussions with other companies “on other ways we can continue this deal”.

She explained that a deposit of $F18m ($US10m) during the bidding process has been returned along with $F2.4m interest, due to the 20 per cent devaluation of the Fiji currency.

“BP Oil is a huge money making opportunity. This is not the first oil bid, we didn’t succeed the last time so we tried again and we will keep trying so we can move forward. We will continue to look for opportunities with your ideas and opinions in mind,” she said.

Kaloumaira dispelled speculations they had entered into the oil deal without much ground work.

“We had received assurance locally from the Reserve Bank and others of their financial backing for the BP deal,” he said.

“But the climate changed, prompting the locals to pull out and advise us to seek funding overseas instead. But due to the economic and political situation in April, it did not look too attractive to them - so after that difficulty, we decided to pull out.”

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