The Editor, Sir:

Your editorial in today's issue is spot on. I am in full agreement with everything that you said. I am, however, still not quite clear as to the status of the company that undertook this deal, but it seems that the line between private and public is blurred, as the company does seem to operate in a quasi-government way at times, hence, it might very well be that these losses will eventually have to be borne by the taxpayers of this country.

From the information thus far gleaned, the transaction was handled in a way that is almost unbelievably bad and amateurish, and one must wonder if the persons involved knew nothing about business, and if not, would they not have asked how a normal import transaction is carried out? Indeed, there are too many unanswered questions, aside from the due diligence that should have been done when dealing with an overseas company for the first time.

The first seems to be why was the importing company dealing through a New York-based agency at what appears to be an exorbitant rate of commission? The normal commission rate on most items ranges between three and five per cent, but for a deal as large as this most commission agencies would reduce their profit margin to perhaps two per cent.

Never done business in jamaica

Why were we paying them a whopping 18 per cent commission fee? A quarter of a million United States dollars for doing what? For writing an order? It is said that this US company had never done business in Jamaica before; the signs point to the probability that they hadn't done business in India before either!

Why did we go through a middle man in the first place? The Indian High Commission in Kingston has a good idea of which firms in India are reputable and which are not. We have written to them in the past and they have provided answers promptly and without charge.

The high commission would have been able to advise the status of the exporting company in question, and if they did not know they could have investigated the company. From what the Indian high commissioner is reported as having said, it seems that he knew nothing of this deal and that his office was never asked anything.

Why was not a letter of credit established? We are told that cash was sent in order to save time. It takes a day or two to establish a letter of credit. For a further fee of one per cent the cargo could have been inspected prior to shipment by a reputable international firm, such as SGS (Societe General de Surveillance), which has offices all over the world, and I am sure in a large exporting country such as India.

'Trial' shipment

Why did we buy 6,000 tonnes as a 'trial' shipment? Surely, one buys a maximum of, say, 500 tonnes, as a trial. To invest over US$1.4 million (J$80 million) for a trial shipment of 6,000 tonnes from a supplier that one knows nothing about seems at best reckless and irresponsible.

It is said that the fertiliser should have been shipped in March to arrive in May. It takes 6-8 weeks for a vessel to travel from India to Jamaica. Why are we hearing of this delay a full six months after the cargo was due to arrive? Perhaps, had action been taken more promptly, a portion if not all of the money might have been saved.

I think that a full investigation into this deal should be carried out, and that the principals of the US company should also be looked into and their track record checked, even though the commission of US$250,000 has reportedly been returned. Let us not forget that the principal sum of US$1.4 million has not been recovered.

I am, etc.,

PHILLIP A. AZAR

L. P. Azar Ltd

5 Marescaux Road

Kingston 5