Finsac Commission of Enquiry - Blythe: I did not fully honour my debt commitments
Published:Sunday | August 7, 2011 | 12:00 AM
McPherse Thompson, Assistant Editor - Business
Former Water and Housing Minister Dr Karl Blythe has admitted to complaining about not being treated fairly by debt collector Jamaican Redevelopment Foundation (JRF) in circumstances where he has personally failed to fully honour his commitments to repay a number of loans.
He acknowledged that his commitments to the JRF, as reflected in correspondence to him in April 2002, covered an J$84.69 million liability on a National Commercial Bank (NCB) loan for Central Westmoreland Trust, a non-profit organisation established to provide for the general welfare of people living and/or working in that area.
Testifying under cross-examination at the commission of enquiry into the financial sector crises of the 1990s, which continued at The Jamaica Pegasus hotel, New Kingston last Thursday, Blythe also accepted that, as at April 2002, his personal debt from NCB stood at J$30.3 million and another from Workers Savings and Loan Bank at US$222,394.01.
He was also responsible for a loan from NCB in favour of family members David and Joy Blythe for J$3.68 million.
However, the former minister who was cross-examined for most of the day's proceedings by attorney Sandra Minott-Phillips, who is representing the debt collector, accepted there were various correspondences between himself and the JRF in efforts to settle and thus he would not describe the company as being unresponsive.
Blythe told commission Chairman Worrick Bogle and commissioner Charles Ross that he had made arrangements to pay off the loans, but, having failed in his efforts to dispose of assets belonging to either himself or the family, "I did not fully honour my commitments to the JRF."
The Jamaica Tamboo Hotel was to be sold to repay part of the debt, but, asked if it the sale has now been concluded, Blythe responded, "unfortunately not".
Blythe admitted to receiving a letter from the JRF on February 5, 2009, setting out his indebtedness - excluding the contentious Central Westmoreland Trust account - at J$57.03 million with a formal demand for payment within 14 days. But Blythe said he has still not paid the debt.
In earlier testimony, Blythe had told the commission that, over a number of years, the JRF had been less than cooperative with him as he sought their permission to sell family properties at Great George Street, Westmoreland to pay off the debts. NCB has a lien on the properties and the debts having been sold, JRF is holding the title deeds.
Shown a number of documents bearing his signature, as well as mortgage records used to secure a debt from Workers Bank, Blythe accepted obtaining the loan for US$153,500 in June 1994, but said it was denominated in Jamaican currency worth J$5.1 million.
In earlier testimony, he had said it was a J$900,000 loan which was up-stamped, but agreed last Thursday that it was a new facility and it was not up-stamped. That debt, he said, has still not been paid.
The former minister also accepted that some of the family loans for which he assumed responsibility were not mentioned in his earlier submission to the commission. Those include Blythe Insurance Agents Limited for which he took responsibility for a debt of J$1 million.
Blythe said that in 2002 he came to an agreement with JRF as to how to pay off the loans, including that of the Central Westmoreland Trust, which he accepted was part of his liabilities.
Liabilities
However, later in the proceedings, he became adamant that the Trust's debt was not among his or his family's liabilities as the then People's National Party (PNP) government, through the permanent secretary in the Ministry of Environment and Housing, had undertaken to repay the principal and any interest accrued.
He admitted that he was a director when the trust borrowed J$28.4 million from NCB on July 16, 1997 with an agreement to repay on August 18, 1997. The loan carried an interest rate of 25 per cent per annum.
However, he denied that as member of parliament and wearing other caps, and with his family members also involved in the executive of the trust, he was instrumental in obtaining the loan.
Minott-Phillips, faced with objections from attorney Leonard Green representing Blythe, said all the correspondence from the relevant creditors showed that over time the trust's loan and accrued interest and fees have been referenced to Blythe's loan portfolio and, therefore, it was an issue to be pursued.
Blythe admitted that, having led negotiations to settle the debt, he had offered 60 lots of the Truro/Toll Gate subdivision belonging to the Central Westmoreland Trust and each valued at a minimum of J$500,000 in full settlement before the debt was transmitted to the government.
"Are you aware that those lots were sold and not a cent paid over to National Commercial Bank?" asked Minott-Phillips. "No, I am not so aware," Blythe said.