FINSAC debtors await closure

KINGSTON — The Association of Finsac’d Entrepreneurs (AFE) says that the treatment of debtors, who were victims of the 1990s financial meltdown, is a travesty of justice which has been ongoing since then.

“We view the treatment of our members as a travesty of justice, that was a political conspiracy with malicious and envious motives and intentions of those who held power, including but not limited to the prime architects of FINSAC, whose actions we deem reckless, incompetent, irresponsible and inappropriate,” AFE president, Yola Gray Baker, told a press briefing at the Medallion Hall Hotel, Kingston, on Friday May 13.

“We were denied our basic human rights in clear breach of the laws of justice, and still are being denied those rights,” she insisted.

Mrs. Gray-Baker, whose blossoming career as an international fashion designer nosedived after her family became indebted to the tune of well over $100 million on a $10 million loan in 1994, took over the leadership of the organisation in 2009, after the death of founder, Neville Boxe, whose $2.5 million loan for his construction company ballooned to $300 million.

She said that AFE called the press briefing, because its members felt that it was an appropriate point to provide the nation with full and total disclosures. She was referring to the fact that the Commission of Enquiry, which started in 2009 but has been dogged by delays for various reasons including court challenges, is expected to end within another few weeks.

The FINSAC enquiry was initiated by the current government in 2009, to assess the cause of the meltdown, and whether the debtors whose assets were confiscated were treated fairly.

Three-year-old AFE groups more than 30 entrepreneurs who lost billions of dollars, including their properties, homes and businesses during the collapse and since.

AFE blames the previous Government’s high interest rate policy for the failure of their businesses, saying their loans went into default because of the constant increase in debt servicing charges, as interest rates kept climbing in the 1990s.

Former Minister of Finance and Planning, Dr. Omar Davies, who has been characterised as the chief architect of the former Government’s high interest rates policy, has consistently argued that much of the mess was the result of poor management by bankers and debtors.

Mrs. Gray Baker said that the AFE is looking forward to greater and more improved civility, justice, truth and respect for all, “and a more favourable path, that is conducive to a responsible investment climate and less hostile way of life, after the enquiry.”

“I cannot address all the issues that have impacted on us, the borrowers negatively, so we will, at this point, rely on the commissioners with the hope that the outcome for us, after more than 13 years, will be a positive one,” she said in a statement to the media.

She accused the Financial Sector Adjustment Company (FINSAC), and the Jamaica Redevelopment Foundation Inc., the Texan firm which bought the bad debts for close to twenty cents in the dollar in 2002, of selling the borrowers assets “with reckless disregard for the interest of registered owners, investors, shareholders and other interests”.

She said that there was lack of transparency in how the debts were handled, as well as “collusion, conflict of interest and gross under-selling of properties”.

The Commission of Enquiry, comprising commissioners Worrick Bogle and Charles Ross, will resume hearings on Tuesday morning at the Jamaica Pegasus Hotel, New Kingston, when representatives of JRF, formed by the late Texan millionaire, Dennis Joslin, to manage the debts, are scheduled to appear.

Several previous witnesses, including former Minister of Finance and Planning, Dr. Omar Davies, former FINSAC Managing Director, Patrick Hylton, and bankers Elon Beckford and Jeff Cobham, are likely to return to the hearings. Controversial former chairman of the defunct Century National Bank (CNB), Don Crawford, and former PriceWaterhouse partner, Richard Downer, are being anxiously awaited. But it is still uncertain when the enquiry will be completed.

Friday, attorney for Thermoplastics Limited, Anthony Levy, said that he has written the Commissioners requesting that former Prime Minister, the Most Hon P.J. Patterson, be called to testify. But up to Thursday, chairman Bogle was saying that he saw no need to call in Mr. Patterson. However, it is anticipated by the debtors that recent statements by Mr. Patterson explaining that without the establishment of FINSAC, the 1990s situation could have been violent and bloody, could change the commissioners’ minds.              

At Friday’s briefing, AFE thanked Prime Minister Bruce Golding and Minister of Finance and the Public Service, the Hon Audley Shaw, for the chance for their issues to be aired publicly, adding that they are willing to await the findings of the commission. However, they have expressed concerns that their questions are not being fully answered, as the bankers are proving evasive, they cannot question them and they cannot afford the lawyers they need to present their cases as they would wish.

By BALFORD HENRY, JIS Reporter