Minister of Finance and the Public Service, Hon. Audley Shaw, is warning that the Ministry will be vigilant in monitoring the operations of companies listed on the Junior Stock Exchange, to ensure compliance with the purpose for which it was established.
Speaking at the sixth Jamaica Stock Exchange (JSE) investment and capital market seminar at the Jamaica Pegasus Hotel, New Kingston, on Wednesday (January 26), Mr. Shaw said the Junior Stock Exchange, which operates under the JSE, was established to encourage the start up and expansion of business operations, job creation, foreign exchange earnings and wealth creation, on the basis of equity rather than debt financing.
Noting that some businesses and financial interests have become “far too comfortable” with debt financing rather than equity financing, the Finance Minister warned that no abuse of the Junior Stock Exchange will be tolerated, particularly to avoid the payment of corporate taxes.
“There should be no attempt to use the Junior Stock Exchange as a means of maintaining the status quo, simply seeking to avoid the payment of corporate taxes: That’s not the purpose,” he asserted.
Mr. Shaw said the Ministry welcomes new listings whose activities are based on the principles governing the Junior Stock Exchange. He, however, warned that “we will be carefully monitoring operations, to ensure that all of the terms set out in the remission notice are fully complied with”.
Noting that seven companies were listed on the Junior Stock Exchange in 2010, with another eight due this year, Mr. Shaw intimated his familiarity with the development of some of the entities.
He highlighted Lasco’s entering a “very significant expansion phase”, involving an investment incremental of about $400 million which will create some additional 300 jobs, as the kind of expansion and investment “that will allow me to make that sacrifice.”
“It is an opportunity for Jamaicans to take a stake in the ownership of a company like that. So I remain committed to the principles that guide the establishment and the vision of the Junior Stock Exchange,” Mr. Shaw said.
“I am simply saying, based on your own guidance and based on the understanding and acceptance of the principle, let us not violate those principles. But, if we use it within the context of the principles set down, then everybody will mutually benefit, ultimately, including the tax coffers,” Mr. Shaw said.
CONTACT: DOUGLAS McINTOSH