FORMER Banker Aubyn Hill, who was appointed to spearhead the Government’s divestment of its sugar factories, is now being paid $7.5 million to be the chief executive officer of the Sugar Company of Jamaica (SCJ) Holdings Limited.

He has been replaced as chairman of SCJ Holdings by Erwin Burton, a senior manager of GraceKennedy Limited.

The disclosure was made yesterday in the House of Representatives by Agriculture Minister Dr Christopher Tufton.

But no sooner had he made the statement than the Opposition People’s National Party raised talk of a possible conflict of interest in Hill’s new role at the SCJ.

Describing the move as “obviously something new,” Peter Bunting, the Opposition spokesman on national security and himself a banker, argued that it was “highly unusual for the CEO of an entity to be divested also to be the one responsible for the divestment.”

“It would appear to me that a number of potential conflicts of interest would arise in that situation,” he said.

Bunting asked the minister to provide examples where other salaried CEOs were responsible for the divestment of the entity they had responsibility for. And to explain why Hill would be paid a “success fee of the percentage of the price of the divestment.”

In defending the move, Dr Tufton said Hill will report to the board, which he formerly chaired.

“There are many examples of companies with CEOs that have been charged with divesting elements of the operations that they preside over. They are subject to supervision…,” Tufton argued.

In the case of Hill, the agriculture minister pointed out that he was no longer a member of the board and that a subcommittee of the said board would focus on the divestment. Hill will ultimately report to the cabinet on all matters related to the divestment.

The Minister also said Hill’s duties were clearly identified.

“His (Hill’s) principal roles will be to manage the operations of SCJ Holdings so as to ensure continued improvements in the efficiency of Frome, Monymusk and Bernard Lodge estates without recourse to the public purse, as well as to accelerate the divestment of these estates,” Tufton said.

He disclosed that Hill will also be paid a commission equivalent to one per cent of the proceeds realized from the divestment of the three estates still owned by the government. Two of the five state owned sugar estates have already been divested.

When the Minister was asked to defend the decision to pay Hill a percentage of the divestment proceeds, he said the Government was guided by the Development Bank of Jamaica.

The Minister also said Hill’s duties were clearly identified.

“His (Hill’s) principal roles will be to manage the operations of SCJ Holdings so as to ensure continued improvements in the efficiency of Frome, Monymusk and Bernard Lodge estates without recourse to the public purse, as well as to accelerate the divestment of these estates,” Tufton said.

He disclosed that Hill will also be paid a commission equivalent to one per cent of the proceeds realized from the divestment of the three estates still owned by the government. Two of the five state owned sugar estates have already been divested.

When the Minister was asked to defend the decision to pay Hill a percentage of the divestment proceeds, he said the Government was guided by the Development Bank of Jamaica.

Meanwhile, Dr Tufton also disclosed that the Government is to conduct a commission of enquiry into the state of the sugar industry. This comes more than 22 years after the last such enquiry was conducted in 1987. Among other things, the commission of enquiry will “review, enquire and make recommendations as to changes, if any, to the current regulatory, institutional and pricing arrangements in the sugar sector,”

“The overall objective of undertaking the review is to establish the relevance of the current regulatory, institutional and pricing arrangements in the sugar industry given the changes in the domestic and international environment,” Tufton said when asked to justify another possible expensive commission of enquiry.

Nonetheless, Bunting still questioned whether this was the most cost-effective route to determining what the current regulatory requirements of the sugar sector were.