KINGSTON — Co-owner of once popular furniture and appliance retailer, Homelectrix, George Hugh, told the FINSAC Commission of Enquiry, Tuesday February 22 that his family suffered mentally and financially from the loss of the company following the 1990s financial meltdown.
Mr. Hugh noted that, at the time, Homelectrix was the second largest home appliance retailer in the country, to Courts Jamaica, with 30 stores, islandwide, and over 200 direct employees. However, he said that after Texas-based investor Dennis Joslin’s Joslin Jamaica took over the debt from FINSAC, he was forced out of their main building, Clock Tower Plaza, Kingston, and their other stores.
“We didn’t close, FINSAC closed it,” Mr. Hugh remarked, as he recalled how he and his staff were taken out of the building by the police. He said he is still unaware of what happened to some $200 million in outstanding hire purchase loans to Homelectrix customers.
“It was a family business and we’ve suffered a lot of trauma from this loss of business, financially and mentally,” he said in response to questions from his attorney, Dr. Chris Malcolm. He noted that his brothers, who had joined him in the business, have emigrated since.
Mr. Hugh also stated that he and his family had offered to purchase the bad loan from FINSAC for 35 cents out of the dollar, but received no response. He said on several occasions he had sought to get financial statements, about their loans, from FINSAC without success. Minister of Finance and the Public Service, Hon. Audley Shaw, has stated that the debt was sold to Joslin for approximately 25 cents in the dollar.
In 1997, the Workers Bank, to whom Mr. Hugh and his brother, Raymond, co-owners of Homelectrix, owed a debt of over $500 million, appointed a receiver, Leon Robertson, to ensure payment on the loan.
Workers Bank eventually lifted this receivership and restructured the debt, but the loan slipped back into arrears and became part of the estimated $19 billion portfolio of bad debt and other assets which Joslin Jamaica acquired from FINSAC in February 2002. Mr. Hugh said after the loan with the bank was restructured to a $700 million debt, the bank reneged on the agreement and he started getting amazing statements of accounts, without clarifications.
In 2002, in its first action after purchasing the loan portfolio from the Government-owned FINSAC, Joslin Jamaica, forerunner of Jamaica Redevelopment Fund (JRF), sent in another receiver, Ken Tomlinson, who placed representatives at the company’s stores, islandwide, including the main shop at Clock Tower Plaza, Half-Way-Tree, Kingston, until the business was finally sold.
Mr. Hugh is expected to return to the enquiry on Thursday (February 24), when he is expected to be cross-examined by attorneys for the JRF.
By BALFORD HENRY, JIS Reporter & Editor