KINGSTON — The Financial Sector Adjustment Company (FINSAC) admitted Thursday May 12, that many depositors with the defunct Century National Bank (CNB) have not been repaid their deposits, some 16 years after the bank was taken over and closed down by the Government.
But, FINSAC's General Manager, Errol Campbell, told the Commission of Enquiry that it was not its fault that it was still holding some $170 million owed to the depositors.
“The last time we did an advertisement was around two years ago, asking persons who had deposits with CNB to apply; only about five or six persons responded and it was only about $10,000 we had to pay out,” Mr. Campbell said.
Former Minister of Finance and Planning, Dr. Omar Davies, took over CNB in July 1996, by assuming “temporary management” under the provisions of the Banking Act. This was done on the basis that the bank had excess liabilities of some $2.5 billion.
The Financial Institutions Services Limited (FIS), which was formed to takeover the Blaise Trust and Merchant Bank, Government’s first takeover during the 1990s financial sector meltdown, also took over management of CNB, but was later merged into FINSAC.
Mr. Campbell succeeded current National Commercial Bank (NCB) Group Managing Director, Patrick Hylton, as boss of FINSAC in 2003 and still runs the company.
He told Commission member, Charles.Ross, any person who had deposits with the bank could still apply, “as long as they can provide proof that they had the account”. Asked what sort of proof, Mr. Campbell suggested an old pass book, or an original certificate of deposit for fixed deposits.
However, Worrick Bogle, who chairs the commission, felt that it would be more helpful if the public follow the example of other commercial banks, and publish the list of the names of the depositors, so that even relatives of dead depositors could make claims.
The Commissioners also informed the sitting that they are still working on arrangements to have former CNB chairman, Don Crawford, appear via video conferencing. Mr. Crawford, who has lived abroad since the takeover, has expressed an interest in testifying via video like former Eagle Group chairman, Dr. Paul Chen Young.
The Commissioners were also surprised to learn that FINSAC still had a staff of about 12 persons, despite selling off the bad debts to the Texan Dennis Joslin in 2002. Mr. Campbell also admitted that FINSAC has one person at JRF's head office in New Kingston, who is there to open the vault containing securities for the bad debts, as all copies were turned over to Joslin’s companies, Dennis Joslin Jamaica (DJJ) and Jamaica Redevelopment Foundation Inc. (JRF) in 2002.
He said following the sale of the bad loans, DJJ moved into the office formerly occupied by FINSAC at the Mutual Life building, Oxford Road, Kingston and was given all the documents and securities.
“In reality, FINSAC moved out leaving all loan and collateral files for DJJ,” Mr. Campbell said. FINSAC's offices are currently located at Shalimar Avenue, Vineyard Town, Kingston.
He said, thereafter, credit files for loans repaid prior to the sale were moved to various locations for temporary storage, until some years later, when a Records Centre was established to house the files.
“I should mention that there are about 11,000 boxes of files, each with 10 files on average, stored in a warehouse,” he explained.
Mr. Campbell said, FINSAC still has nearly 10 properties to manage, hence the need for staff. Some were acquired through litigation, including some 16 acres of land owned by the Ciboney Hotel in Whitehouse, Westmoreland; two lots in Drax Hall, St. Ann, which were owned by Dyoll Life; and several pieces of artwork which FINSAC plans to auction soon.
The enquiry resumes next Tuesday, when JRF’s representatives will take the stand.
By BALFORD HENRY, JIS Reporter