Gleaner EDITORIAL: Break silence on Cash Plus et al

[Karl]

Break silence on Cash Plus et al
published: Friday | January 4, 2008


The Financial Services Commission (FSC), obviously emboldened by the Supreme Court's ruling in the Olint case, has finally issued a cease-and-desist order on the so-calle investment scheme, Cash Plus, after months of wrangling.

So, at the very least, Cash Plus - which the FSC fears may be insolvent - is unable to accept new deposits. Should anyone, therefore, be at risk of losing money, it would be those who already have deposits in the scheme, with the promise of extraordinarily high returns.

Based on an opaque financial statement recently published by Cash Plus, covering the period up to last September, the company had a deposit liability of $16 billion and interest obligations for the next three years of $22 billion. The company says it wants to convert the debt it does not say precisely which one or what portion, into preference shares.

The FSC is obviously sceptical that Cash Plus has the underlying assets either to meet its obligations or carry through this reorganisation. What is not clear, though, is what plan either the FSC or the Finance Ministry has for Cash Plus or similar institutions.

The Government and, in particular, the Finance Minister, Audley Shaw, have remained silent on the issue, even as panic grows among people worried about the safety of their cash. It is time to hear a definitive strategy from Mr. Shaw.

The Government should be aware that a disorderly collapse of Cash Plus, and other schemes, however constructed, will undermine investor and consumer confidence and the prospect for growth.


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[Muadib]

I thought both the Govt and the Financial sector have already addressed the scenario of alternative schemes crashing...

Country of Samples with their childish agendas..

[Karl]

Herald EDITORIAL: Government must act now

Government must act now

December 30, 2007 - January 8, 2008

The recent Supreme Court ruling on the activities of Olint and Lewfam, confirming that that the unregulated financial schemes must abide by the law, clears the way for the government to act now in the public’s interest.

A month ago, Prime Minister Bruce Golding, in addressing a Media Association of Jamaica forum, indicated that the government was awaiting the ruling of the court to determine its course of action regarding the unregulated financial schemes. He made the remarks against a background where certain commercial banks had taken steps to close bank accounts they held for Cash Plus and Olint.

We are calling on the Prime Minister and the Ministry of Finance to ensure a tidy policy environment in which some closure can be achieved. As we see it, there are only two available options. Either the schemes become compliant and apply for licences to operate as securities dealers, or an orderly process is developed to ensure that people get back the money they have invested with the schemes.

Olint has launched a foundation and it is unclear whether the ruling of the court needs to have an immediate bearing on the future of that foundation, which was welcomed with fanfare, including the endorsement, by their presence, of Cabinet ministers.

Cash Plus is the sponsor for the National Premier Football League. They have injected J$50 million of desperately needed funds into the league. The Minister of Finance and the Public Service, Audley Shaw, while he was the Opposition Spokesman on Finance, had decried the attempts by the then government to regulate the investment schemes as moves to stifle entrepreneurship.

We would encourage the minister, at this point where Cash Plus has been officially ordered to cease and desist its operations, to now say what steps would be taken to further encourage the entrepreneurs behind the unregulated investment schemes. At the very least, it must be borne in mind that media reports have suggested that some 4,000 persons are employed to Cash Plus companies.

Though there are no precise figures available, we are of the belief that more than 40,000 persons have invested in Cash Plus schemes. We believe that the attempt to retrieve their funds could well precipitate a social crisis. It is therefore important that the Ministry of Finance makes clear any policy guarantees that may be offered to the members of the public involved, to ensure a tidy resolution of the matter.

Copyright © 2005 Sunday Herald. All rights reserved

[Lazie]

What I find funny is entities like Cash Plus existed for years. Yet all of a sudden people want the gov't to act ... where was the cry when the previous gov't was in office?

[Gamma]

anyway did bruce not come out and say there will be no bailouts for alternative investment schemes?

[Lazie]

anyway did bruce not come out and say there will be no bailouts for alternative investment schemes?

He did ... but the way I hear Ronnie Thwaites, Ralston Hyman and other insisting that the gov't must act NOW ... mi curious where were the cries before now.

[Assasin]

The law took its course and what can they expect? Only a pity them never do this from years ago. While I think people made some money which is good, I can't understand how the FSC stood by for so many years and let these entities became billion dollar businesses. The FSC as proven by the courts had all the powers.

[Lazie]

The law took its course and what can they expect? Only a pity them never do this from years ago. While I think people made some money which is good, I can't understand how the FSC stood by for so many years and let these entities became billion dollar businesses. The FSC as proven by the courts had all the powers.

Wasn't the FSC trying to reel in these entities, but they were told that they didn't fall under the scope of the FSC? (or something to that effect).

[Gamma]

well i know OLINT (re?)defined itself as an investment club.

[Assasin]

Lazie the law haven't changed and they were business entities. How else can they be defined?

Trying and doing something a two different things. You can't want till the illegal companies come and almost established themselves and compete against legal companies. They must be nipped in the bud. You talk about informal economy, well you can't be serious if you say these companies are not legal.

[Lazie]

Lazie the law haven't changed and they were business entities. How else can they be defined?

Trying and doing something a two different things. You can't want till the illegal companies come and almost established themselves and compete against legal companies. They must be nipped in the bud. You talk about informal economy, well you can't be serious if you say these companies are not legal.

One has to be careful here. OLINT was said to be in Forex trading .... what does Cash Plus do? Todate I'm yet to hear that.

[Assasin]

They shut them down right? They say they need a license trader and have to apply for license to conduct business so they could have done it years ago if they chose to.

I still believe these companies could have been legal entities with the right guidance, not deliver so much return and maybe somewhat smaller in size but competitive but because of our bandoolo society.