JRF recovers US$193 million FINSAC debt
Published:Wednesday | February 23, 2011 | 12:00 AM
One-third paid to Government
The Jamaica Redevelopment Foundation Inc (JRF) has recovered up to US$193 million of the bad debt portfolio which was sold to it by the Government.
At the current conversion rates, the sum amounts to J$16.6 billion.
Sandra Phillips, attorney-at-law representing JRF made the dis-closure while cross-examining Michael Levy, a Mandeville-based business-man who last week told the Commission of Enquiry how a J$4 million loan from the Eagle Commercial Bank, in 1994, turned into J$1 billion of unmanageable debt in 2008.
Phillips said the debts recovered were from 2002 when the bad debt portfolio was acquired by JRF, to January 31, 2011.
She said that of this amount US$69.2 million was paid over to the Jamaican Government.
"Now, the Government of Jamaica has retained in excess of 33 per cent interest of the bad debt portfolio it sold," she said, arguing that this was through the efforts of JRF and which had been written off by the Government while it was at the Financial Sector Adjustment Company (FINSAC).
Phillips was challenging statements given to the Commission earlier by Levy who quoted statements made by Finance Minister Audley Shaw to Parliament that the debt portfolio was not offered to Jamaicans and that the price paid was 50 cents for every dollar recovered.
False statement
"So this statement here is false ... reported purchase price has not yet been determined because until the portfolio is recovered fully, we will not know how much the Government of Jamaica has received from the efforts of JRF in recovering what was viewed as a bad portfolio," she said.
But when pressed by Charles Ross, one of the members of the Commis-sion, what was the value of the debt portfolio, Phillips said the information was irrelevant.
"The original value of the debt is meaningless ... whatever the value put on it is neither here nor there," she said.
Ross, however, insisted that this was important.
Earlier on in the cross examination, Phillips punched holes into statements given by Levy to the FINSAC Commission of Enquiry last week. She presented several documents which indicated that the JRF offered Levy the opportunity to restructure his debt.
Levy however denied that any offer was made, saying that it was the first time he was seeing some of those documents.
Phillips indicated that Levy had carried the JRF to the Supreme Court in 2008 seeking an injunc-tion restraining the JRF from exercising its power of sale. She said the injunction was denied by the Courts.
Levy is one of many witnesses now before the Commission of Enquiry, which is examining the collapse of the financial sector in the 1990s. Minister Shaw set up the Commission last year.