Attorney General, AAumua Ming Leung Wai, has dismissed concerns over a new private company owned by government ministers, set up as part of the process to privatise the Agriculture Store Corporation.
Aumua i s one of two directors of the company called Agriculture Store Corporation Limited, documents obtained by the Samoa Observer shows. Asked for a comment, Aumua said the new company has been set up as part of efforts to privatise the Agriculture Store Corporation. The company came to light when the Samoa Observer was looking into the privatisation programme for the government Agriculture Store Corporation, set up in 1975.
Privatisation has long been pushed by the World Bank and other development partners as a way of improving government efficiency. Ac c o r d i n g t o Aumua, “privatising a Government Corporation that was established by an Act of Parliament can be complicated.”
The “Agriculture Store Corporation Limited” is a private limited liability company set up by government on 10 September 2013 last year. This was one month after the Agriculture Store Corporation Repeal Act was tabled in Parliament on 9th August 2013.
Finance Minister, Faumuina Tiatia Liuga, is named as holding 100,000 shares, while Le Mamea Ropati Mualia is named as the other shareholder, also with 100,000 shares. Neither are named as directors. The Directors are Lavea Tupa'imatuna Iulai Lavea, and Ming Chad Leung Wai.
The contact for the new company is given as Kalameli Se'e Seuseu- So'o. In his response, Aumua said that the assets of the Corporation are being audited, and that the involvement of Cabinet Ministers and other officials in the private company was only for privatisation of a public asset. Government had followed a similar process for privatisation of the former Samoa Broadcasting Corporation, he said.
In the case of the agriculture corporation, assets held by government have not yet been transferred to the new company. “Once the assets are transferred to the company, the shareholders (i.e., Ministers) will transfer the shares of the company to the winning bidder – most likely on the same day.
“The directors (myself and Lavea) will also resign and will be replaced by the directors of the new owner.” The repeal act also aims to ensure that privatisation does not result in a monopoly. Under Section 5 of the act, headed “Monopolisation”, the act reads “A person, who may be, or is, in a position to substantially control the market as a result of the privatisation of Agriculture Store Corporation Limited, shall not be eligible for consideration in such privatisation process.”
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Assets listed under Schedule 4 of the act are: Freehold Land Lot 545 in Plan 5410 1,057 square meters At Savalalo District of Tuamasaga And: Freehold Land Lot 1 in Plan 10009 4,606 square meters At Vaitele District of Tuamasaga Aumua’s email to the Samoa Observer specifically answering some questions are published in verbatim below: “Privatising a Government Corporation that was established by an Act of Parliament can be complicated.
“The process that we adopted is to set up a company (Agriculture Store Corporation Ltd) under the Companies Act.
“Another Act of Parliament (namely, Agriculture Store Corporation Repeal Act 2013) will repeal the Agriculture Store Corporation Act 1975 and at the same time transfer all assets and liabilities to this company.
Since all assets and liabilities will be held by the company, it will therefore be easy to transfer the shares in such company to the winning bidder. At the moment, the Agriculture Store Corporation Repeal Act 2013 has not yet come into force. We intend for it to come into force on the day the Government effects the privatisation.
In other words, once the Agriculture Store Corporation Repeal Act 2013 comes into force, it will repeal the Agriculture Store Corporation Act 1975. “At the same time, all the assets and liability of Agriculture Store Corporation will be transferred to the new company Agriculture Store Corporation Ltd. Immediately thereafter, share transfers executed by the Ministers will effect the transfer of shares in the company to the winning bidder.
“The directors of the Agriculture Store Corporation Ltd will also resign. Please note that the current board of Agriculture Store established under the Agriculture Store Corporation Act 1975 has not been dissolved and will continue until the coming into force of the Agriculture Store Corporation Repeal Act 2013.
“We did the same process for Samoa Broadcasting Corporation a few years back when we privatised it. We are now in the process of preparing the bid documents so that those in the private sector can bid to buy Agriculture Store. “I have tried to answer your specific queries below in red…. Ming C. Leung Wai ATTORNEY GENERAL
Question 1: Why are cabinet ministers shareholders and directors of the new Agriculture Store Corporation Ltd?
Answer: “The Ministers are the more appropriate persons to hold the shares (see Public Bodies Act) in the interim period until the shares are transferred to the winning bidder. The processing of the privatisation is being handled by my Office, Ministry of Finance and Audit Office so it makes more sense for the directors to be myself and Lavea Iulai.
Fuimaono Camillo is not a director to ensure his independence. Please note that the new company Agriculture Store Corporation Ltd does not own any assets at the moment. All assets are still with Agriculture Store Corporation.”
Question 2: Why were the shares and directorships not held by officials from a more independent public body, such as the Unit Trust or Samoa Land Corporation?
Answer: “See above.”
Question 3: What would you say to those who might perceive "corrupt practice" in transferring public assets to private ownership - by those who are doing the privatising? Is this not a conflict of interest?
Answer: “No assets have been transferred to the company Agriculture Store Corporation Ltd. The company is merely a vehicle to effect the privatisation process as explained above. Once the assets are transferred to the company, the shareholders (ie, Ministers) will transfer the shares of the company to the winning bidder – most likely on the same day. The directors (myself and Lavea) will also resign and will be replaced by the directors of the new owner.”
Question 4: What if any fees are being paid to the directors and shareholders of the new company?
Answer: “None.”
Question 5: What safeguards have been put in place to ensure that public assets are not lost from the corporation during the transition to privatisation?
Answer: “Meetings have already been held between Government and the current board and management of Agriculture Store Corporation which also covered this situation. Audits are also being carried out.”
Question 6: What is the status of the land that ASC buildings are on?
Answer: “The land at Vaitele will be retained by Government. The land at Salelologa belongs to Government.”
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