KINGSTON — Former PricewaterhouseCoopers (PwC) partner, Richard Downer, Monday (May 30) denied involvement in “secret profits” or fraud, while operating as receiver for the defunct Thermo-Plastics Jamaica companies, during the 1990s financial meltdown.
“I deny that I received, or retained, any secret profits and commissions or committed any fraud in these receivership,” Mr. Downer told the FINSAC Commission of Enquiry, regarding his tenure as receiver for Thermo-Plastics Jamaica, and sister company, Plas Plak, between 1998 and 2002.
Former Thermo-Plastics managing director, Jean-Marie Desulme, had accused the chartered accountant of over-billing the companies as receiver, after they were taken over by the National Commercial Bank (NCB), which was then owned by the Financial Sector Adjustment Company (FINSAC).
His allegations were supported by a witness statement from former Chairman of the Jamaica Urban Transit Company (JUTC), Douglas Chambers, who had succeeded Mr. Downer as receiver in 2002. The statement was meant for cases brought against Mr. Downer by Thermo-Plastics and Plas-Pak which are still in the courts. It was allowed by Commissioners Worrick Bogle and Charles Ross, in March, after objections from some attorneys. Mr. Chambers was killed in June, 2008 but the statement was admitted in court.
In the statement, Mr. Chambers claimed that after gaining access to “some books and records” in June, 2002 he was convinced that Thermo-Plastics and Plas-Pak were fraudulently charged $29.4 million, during Mr. Downer’s tenure. He claimed production managers/receivers were paid $2,500 per hour, while the companies were billed $7,000 to $7,800 per hour for their services.
But, Monday Mr. Downer was adamant that the charges were false and had no basis, during examination by his attorney, Stephen Shelton, a partner in Myers, Fletcher & Gordon.
He said that PricewaterhouseCoopers uplifted the costs, as it was entitled to do, after engaging the general managers. Regarding the length of the receivership, during which the fees were incurred, he said it was due to owners, FINSAC, instructing him to facilitate efforts by the National Investment Bank of Jamaica (NIBJ) to buy the businesses, at the expense of “other bids at various times”.
He said that in the interim, he had to keep the businesses operating as going concerns, so as to get the best possible sale price.
“During this time I, as receiver, had to pay managers and staff supplied by PricewaterhouseCoopers. These fees were based on time charges, at rates which were consistent with PwC’s rates, charged for the various levels of staff that the firm supplied to clients. The receivership fees included only such items and there were no padded bills, as is alleged by Mr. Desulme or is alleged otherwise,” he stated.
“No other payment was made for the benefit of the firm, its partners or myself whatsoever,” Mr. Downer said.
He also noted that in Mr. Chambers’ statement a section titled, the “simple fact of the mark up”, was used to establish that he: facilitated fraud; committed fraud; showed intent to commit fraud; and that the information was proof of fraud. He said, however, that the allegations were unsupported by facts.
He added that the statement also set out to convey that he had taken steps to conceal aspects of the conduct of the receivership. However, he said, he handed over all the receivership documents to Mr. Chambers, and all other documents were left in the companies’ buildings. He said he also authorized his attorneys, Myers Fletcher & Gordon, to give Mr. Chambers any document he needed pertaining to the receiverships.
By BALFORD HENRY, JIS Reporter