Jamalco denies CCA report of US$100m CAP gap

Jamalco has taken “serious issue” with a Sunday Gleaner report quoting a CCA Capital Partners financial review of its operations, which shows that nearly US$100 million, or more than J$13 billion, in payments made by Clarendon Alumina Production (CAP) over a four-year period could not be accounted for.

In a press statement released Thursday, Jamalco said the report by CCA was “incomplete based on fundamental misinterpretations of the information provided by Jamalco and published before all the required information had been disclosed”.

“Had CCA or the former board of Clarendon Alumina Production Limited provided this report to Jamalco for review, the organisation would have been able to conclusively address this error,” the statement said.

“However, this was not done.”

The findings of the report were published in The Sunday Gleaner on December 5.

The stage one treasury review involved combing through four years of invoices, monthly statements, and transactions posted to Jamalco’s United States bank account, according to the review document prepared by the Andrew Simpson-led CCA.

It revealed that US$61 million was from production and capital expenditure payments to Jamalco between 2017 and last year, while US$37.5 million was from fuel oil payments to the Noble Group, co-owners of the refinery.

The findings led the review team to recommend that “intensified surveillance” be conducted to unearth what it claimed were “operational and management deficiencies of the managing partner”.

Jamalco is operated under an unincorporated joint-venture arrangement between the Jamaican Government and the Hong Kong-headquartered Noble Group, which controls a 55 per cent stake in the refinery through its subsidiary, General Alumina Jamaica (GAJ).

The remaining 45 per cent is owned by the Jamaican Government and managed through CAP.

But Jamalco said it was only provided with the CCA report after the publication of the Sunday Gleaner article.

Finance Minister Dr Nigel Clarke acknowledged last Friday that the CCA review raises questions about the reconciliation of fuel-supply costs to Jamalco and the distribution of these costs between CAP and Noble. He promised to get answers.

“I will ask the new board to see to it that this matter is thoroughly reviewed as a matter of priority by an established accounting firm with a track record in auditing,” Clarke said, appearing to question the competency of the review team.

Simpson, president and chief executive officer of CCA Capital Partners, declined to discuss the findings, citing confidentiality agreements, but insisted that the report could stand up to scrutiny.

Up to last month, the CCA boss had been engaged by CAP as a consultant, but after nearly two years, the contract was not renewed.

But Jamalco said it has submitted to the new board of directors of CAP a full reconciliation of the “alleged gap” and has offered to subject this analysis to review by a reputable, internationally recognised accounting firm should this be required.

It said that audits of Jamalco, GAJ, and CAP for the periods 2017-2020 have identified no negative findings.

“There is not a US$100 million missing from Jamalco, and we intend to take all the necessary steps to prove the claims are false and hold those responsible for the claims to account,” said the company’s managing director, Austin Mooney, while contending that the financial integrity of the company has been incorrectly called into question.