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Businessman tells Finsac Enquiry how $4million loan turned into $1 billion debt
A Mandeville businessman told the Commission of Enquiry into the 1990s financial sector collapse, on Wednesday (February 16), how a $4 million loan from the Eagle Commercial Bank in 1994 turned into a $1 billion debt in 2008.
Businessman Michael Levy, who owned the Bankhouse Mall on Manchester Road, Mandeville, said that after learning that, despite paying back over $20 million by 1997, he still owed over $1 billion, he wrote Minister of Finance and the Public Service, the Hon Audley Shaw, seeking his assistance.
His lawyer, Rafael Codling, quoted extensively from a statement Mr. Shaw made in the House of Representatives, sometime after the letter was sent to him, indentifying that thousands of Jamaicans had suffered severe financial losses from the meltdown, and the subsequent sale of the bad debts to a Texan firm, Jamaica Redevelopment Foundation (JRF) for only 20 cents in the dollar.
Mr. Levy told the Commission that his mall at Manchester Road was taken from him, he and his staff were chased off the premises and it was eventually sold for far less that the $1 billion owed to JRF.
“I can’t understand how a man has borrowed $4 million and has repaid tens of millions to the bank, could still end up owing the bank over $1 billion,” Mr. Levy said.
He said that the finance minister had stated that some depositors and debtors had received support from the then Government by way of 90-100 percent of deposits, plus interest in some instances, leaving the Government with over $60 billion in debt, but that he had received none of this support.
Mr. Levy said he couldn’t understand how a firm based in Texas was named “Jamaica Redevelopment Foundation”, and how it could acquire the bad debts at 20 cents in the dollar, when no such offer was made to the thousands of Jamaican debtors who had already repaid huge sums on their loans.
He said that he has taken the Government to court for allowing JRF to tack on 50 percent compounded interest on his debt which, he said, is against the law. He is still awaiting a ruling.
The Finsac Commission of Enquiry resumed its sittings in November after being stalled for more than 3 months. Retired Justice Boyd Carey has been replaced as Chairman by Worrick Bogle. Retired Justice Henderson Downer and Investment manager Charles Ross are the other Commissioners.
The enquiry resumes Thursday at 2 p.m. at the Jamaica Pegasus Hotel, New Kingston.
A Mandeville businessman told the Commission of Enquiry into the 1990s financial sector collapse, on Wednesday (February 16), how a $4 million loan from the Eagle Commercial Bank in 1994 turned into a $1 billion debt in 2008.
Businessman Michael Levy, who owned the Bankhouse Mall on Manchester Road, Mandeville, said that after learning that, despite paying back over $20 million by 1997, he still owed over $1 billion, he wrote Minister of Finance and the Public Service, the Hon Audley Shaw, seeking his assistance.
His lawyer, Rafael Codling, quoted extensively from a statement Mr. Shaw made in the House of Representatives, sometime after the letter was sent to him, indentifying that thousands of Jamaicans had suffered severe financial losses from the meltdown, and the subsequent sale of the bad debts to a Texan firm, Jamaica Redevelopment Foundation (JRF) for only 20 cents in the dollar.
Mr. Levy told the Commission that his mall at Manchester Road was taken from him, he and his staff were chased off the premises and it was eventually sold for far less that the $1 billion owed to JRF.
“I can’t understand how a man has borrowed $4 million and has repaid tens of millions to the bank, could still end up owing the bank over $1 billion,” Mr. Levy said.
He said that the finance minister had stated that some depositors and debtors had received support from the then Government by way of 90-100 percent of deposits, plus interest in some instances, leaving the Government with over $60 billion in debt, but that he had received none of this support.
Mr. Levy said he couldn’t understand how a firm based in Texas was named “Jamaica Redevelopment Foundation”, and how it could acquire the bad debts at 20 cents in the dollar, when no such offer was made to the thousands of Jamaican debtors who had already repaid huge sums on their loans.
He said that he has taken the Government to court for allowing JRF to tack on 50 percent compounded interest on his debt which, he said, is against the law. He is still awaiting a ruling.
The Finsac Commission of Enquiry resumed its sittings in November after being stalled for more than 3 months. Retired Justice Boyd Carey has been replaced as Chairman by Worrick Bogle. Retired Justice Henderson Downer and Investment manager Charles Ross are the other Commissioners.
The enquiry resumes Thursday at 2 p.m. at the Jamaica Pegasus Hotel, New Kingston.
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