The Sugar Industry Authority (SIA) has found itself in the middle of a growing controversy over its decision to dump more than $40 million into the investment segments of two life-insurance schemes.

The controversy has deepened since it was disclosed that the wife of a board member at the SIA is to collect more than $2 million in commission from the transactions.

Already, the minister with responsibility for the SIA, Dr Christopher Tufton, has demanded answers to several questions concerning the transactions and could ask his internal auditors to conduct a further probe.

"I requested a report from Ambassador Derrick Heaven, executive chairman of the SIA, and received it over the weekend," Tufton told The Gleaner yesterday.

Tufton wanted answers as to why the SIA would invest $40 million in an insurance company when there were many more lucrative investment options available.

$20-million investment

Under the deal, the SIA added $20 million as investment on life-insurance policies it had taken out for two senior staff members.

The deal offers the SIA no guarantees of a rate of return on the investment and the state-owned company is only certain of getting back $38 million of its money as the agent collected five per cent, or more than $2 million.

"When people have that sort of money to invest, we usually send them to an investment house, such as Guardian Asset Management, where they get a guaranteed rate, which is about 16 per cent at this time," an insurance expert said.

"Insurance companies are not investment bankers and you have to pay them five per cent of your money that you are giving them to invest," added the insurance expert.

However, insurance agent Claudette Rickards, wife of SIA board member, Allan Rickards, told The Gleaner there was nothing unusual about the transactions.

According to Rickards, the money has been invested in a fund which had averaged a 27 per cent rate of return over the past 12 months. She said the fund had performed very well for investors over the years and the projection was that this good run would continue

"Some people are bent on making mischief. This is just petty jealousy and straight foolishness," Rickards said.

"People want to make trouble playing politics and they are trying to create a problem," added Rickards, as she argued that the investment was sound.

That is a position shared by the SIA in its report to Tufton.

"They told me that they had some money and they moved it from one company to the next because they were offered a better deal," Tufton told The Gleaner.

No guaranteed return

However, he seemed unaware that the SIA was not guaranteed any rate of return on its money, and that $2 million would be paid to the agent before the investment was made.

"I will ask our internal auditors to check because I heard about it and requested a report, which I received over the weekend, which said it was not unusual and, even though the policy is in someone's name, the SIA is the beneficiary," added Tufton.

"I want the auditors to determine if this is value for money," Tufton said.