Receiver said FINSAC interfered with sale of thermo-plastics’ assets in 1990s

KINGSTON — Former receiver for Thermo-Plastics Jamaica, Richard Downer, told the FINSAC Commission of Enquiry Tuesday (May 31) that he could not confirm if there was political interference in the disposal of the assets, as well as those of sister company Plas Pak Limited, after the 1990s financial sector meltdown.

“It was a matter of opinion,” Mr. Downer told the Commission of Enquiry probing the meltdown and the role of the Government ‘s Financial Sector Adjustment Company (FINSAC), on Tuesday (May 31) at the Jamaica Pegasus Hotel, New Kingston.

Mr. Downer was responding to questions from attorney Anthony Levy, representing Thermo-Plastics Jamaica’s and Plas-Pak’s former boss, Jean Marie Desulme.

Mr. Levy admitted he was summoned to a meeting at Jamaica House in January, 1999, with former Prime Minister, the Most Hon P.J. Patterson, and two of his cabinet ministers, Horace Clarke and Paul Robertson, as well as National Workers Union (NWU) executive and Portmore Councillor Owen Saunderson, to discuss the future of the companies.

He said that the meeting was convened by then FINSAC managing director, Patrick Hylton, and that he informed those present of a January 15 deadline for bids to purchase both companies, as well as the fact that he was not sure whether the National Investment Bank of Jamaica (NIBJ) was going ahead with its proposal to purchase the debenture from FINSAC.

He said that he was requested by Mr. Hylton to extend the deadline for the disposal of the companies to February 28, to accommodate NIBJ’s interest. He extended the deadline to March 3, but The NIBJ still failed to make it. He was eventually instructed by Mr. Hylton to suspend the sale of the companies, to allow FINSAC to review an offer from NIBJ.

Mr. Downer denied that he did not advertise the assets for sale abroad because he wanted to confine the bids, but confirmed that the receivership lasted three and a half years because FINSAC was not prepared to sell to the bidders that he submitted, although offers were coming in from 1998.

“The length of the receivership, during which our fees continued to be incurred, was due to the fact that the then debenture holders, FINSAC, instructed me, on several widely separate occasions, to facilitate the efforts of the NIBJ to buy the debentures or the businesses, and also not to entertain bids at various times that were coincident with these efforts,” he explained.

He said that this required him to continue the receivership instead of selling the business, “as I could have on at various times to Omni Industries.

“In the interim, we had to keep the businesses operating as going concerns, so as to get the best possible price in a sale. It was not until 2001 that he secured creditor instructed me t accept an offer from NBJ,” he said. By the time NIBJ assumed the assets, receiver’s fees had cost the companies some $111 million.

Mr. Downer’s responses triggered an appeal from Mr. Levy for the Commission to subpoena former Prime Minister, P.J. Patterson, to appear at the enquiry. Commission chairman, Worrick Bogle, said that they would reconsider the Commission’s earlier rejection of the request.

The enquiry resumes Tuesday (June 7).

By BALFORD HENRY, JIS Reporter & Editor