KINGSTON — Anthony Hutchinson has been an accountant and a farmer for the past 26 years but, despite his skills, he is facing eviction from his 15-acre property, because of his inability to pay off a debt of over $12 million triggered by the 1990s financial meltdown.
Mr. Hutchinson says that, after running into problems with repayment of his 1995 loan of $1.6 million from the National Commercial Bank (NCB), which he needed to refinance an overdraft facility, he attempted to sell two acres to the Ministry of Education to accommodate a playfield for the May Day All Age School in Mandeville.
Mr. Hutchinson did not get a payment from the bank, as the funds were used to refinance his overdraft facility, but the debt eventually climbed to a principal of $3.8 million, and interest of just under an additional $1 million.
“Each time the account went into overdraft, the balance as of that date plus any interest was converted to a loan, so that the account was reverted to credit status. At one point during the course of my dealings with the NCB the interest rate on my loan rose to around 70 percent to 80 percent,” he had told the Commission of Enquiry looking into the 1990s financial meltdown and the role of the Financial Sector Adjustment Company (FINSAC), at the Jamaica Pegasus Hotel, New Kingston.
Mr. Hutchinson, a lecturer in accounts at the Northern Caribbean University (NCU) with degrees in accounting and business administration, and a farmer since 1985, made his second appearance at the enquiry on Thursday (March 31). He, basically, reiterated that, if he had been able to complete the deal with the Ministry for the two acres, a process which began in 2001, and was paid the $5.5 million cost much earlier than 2008, he would have been able to settle his debt. By the time the $5.5 million was paid to the Jamaica Redevelopment Foundation (JRF), Inc. he found that he still owed $12 million.
He also stated that after subdivision of the property was approved in November, 2004, two years after he started the negotiations, persons paid down on the lots but he had to refund their deposits, as JRF would not agree to release the titles and allow the sales to go forward.
“Up to 2006, several prospective purchasers were expressing interest in buying the lots. JRF would not allow me to proceed with the sale,” Mr. Hutchinson said. By this time his debt had climbed to over $11 million, of which only $3 million represented principal sums.
“From this point, I had to revert to the negotiations to sell the land to the Government, secure the cash and pay the proceeds to JRF,” Mr. Hutchinson said.
But, the attorney for JRF, Gavin Goffe, in cross examining Mr. Hutchinson, tried to show that the JRF and its predecessor, Joslin Jamaica Limited, which bought the FINSAC bad debts in 2002, unsuccessfully tried to work out arrangements with him to pay off the debt and save his property.
Mr. Goffe noted that JRF’s decision to withhold the titles followed Mr. Hutchinson’s last payment in 2005, which led to a significant increase in the debt. He said that Mr. Hutchinson had made arrangements to make monthly payments, which he breached when he stopped paying in 2005.
“I can’t say that I disagree about not making monthly payments that I should have made but, as I said before, it was because of the cashflow problems,” Mr. Hutchinson insisted.
The Commissioners are chartered accountant Worrick Bogle, chairman, and investment manager, Charles Ross. Justice Henderson Downer is the legal adviser to the commission. The enquiry resumes on April
By Balford Henry, JIS Reporter & Editor