Bharath disputes Petrotrin loss figures

“The truth of the matter, as the minister would have been informed, is that Petrotrin would have brought forward unused capital allowances, accumulated as a result of refinery upgrades as well as the failed WGTL project which cost taxpayers $3.3 billion and a further $3.2 billion in relation to a separate project involving an ultra- low sulphur diesel (USD) plant constructed by South Korean firm Samsung Engineering and Construction Limited.” Bharath said both projects had been entered into under the Malcolm Jones-led board in 2009.

“Provided the auditors are given sufficient evidence that the company will make sufficient profits in the future, these allowances remain on the company’s books as a deferred asset,” he said, and noted that a deferred tax asset was an accounting term which referred to a situation where a business has overpaid taxes or taxes paid in advance on its balance sheet.

These taxes were eventually returned to the business in the form of tax relief, and the over-payment was, therefore, an asset for the company, he said.

“It is clear that as a result of no such assurances been given to the auditors, they may have had little choice but to write off the asset as being ‘unrelievable’ against future profits.

This is what has given rise to the alleged loss of $4.2 billion on Petrotrin’s books. “It has absolutely nothing to do with the management of Petrotrin under the People’s Partnership government and everything to do with the incompetence and mismanagement of the present regime.”