JRF offered options to FINSAC debtors, says lawyer

Mandeville businessman Michael Levy last Thursday denied that he signed on to a 55 per cent interest rate on a J$4 million loan from Eagle Commercial Bank in 1992, which ballooned into his over J$1 billion indebtedness to the Jamaica Redevelopment Foundation Inc (JRF) in 2008.

Attorney for the JRF, Sandra Phillips, while cross examining Levy as the commission of enquiry into the 1990s financial meltdown and the Government's intervention through FINSAC continued in Kingston, suggested that the debtor had signed a document agreeing to the 55 per cent interest rate with Eagle in 1992, which he later accused the JRF of imposing.

"I would be a mad man to agree to that," Levy reacted.

Phillips denied that the JRF restructured the interest agreement on Levy's loan. She told JIS News that debtors were given an option to negotiate a restructuring of the terms of their loans by the JRF, but Levy was not among those who took up the offer, and the original interest rate was kept intact.

The issue was triggered by Levy's revelation that he had taken the Government to court for allowing the JRF to charge him 55 per cent interest, which, he charges, was illegal.

Last Wednesday, Levy had informed the commission of the J$4-million loan he obtained from the now defunct Eagle Commercial Bank. He said that although he repaid more than J$20 million by 1997, he was told that he owed the JRF, which took over the bad debts, over J$1 billion in 2008. This resulted in the sale of his Bankhouse Mall complex in Mandeville.

He said, at the time, the Mall had about 40 tenants paying monthly rent amounting to between J$900,000 and J$1 million. However, he received none of this money after it was taken over and his staff and effects were ejected.

Fail to produce documents

But Levy has not produced a number of documents requested by the commission to support his contention. He admitted to signing a number of blank documents. His lawyer, Rafael Codling, said he is still hoping to retrieve some of the documents from former lawyer, Anthony Pearson.

Phillips produced documents to show that the JRF has been compliant with business laws in Jamaica, as well as in Texas, where it has its headquarters.

The members of the commission are accountant Worrick Bogle, who replaced Justice Boyd Carey as chairman earlier this year, retired judge Justice Henderson Downer, and investment manager Charles Ross.

The hearings resume at 9 a.m. on Tuesday at The Jamaica Pegasus hotel.

- JIS