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FINSAC interfered with sale of Thermo-Plastics assets - Downer
Published: Friday | June 3, 2011 0 Comments
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Richard Downer, chartered accountant and former receiver for Thermo-Plastics, testifies at the FINSAC enquiry on Monday, May 30, 2011. - JIS Photo
The disposal of Thermo-Plastics Jamaica was delayed at least three times on the request of FINSAC Limited which wanted to give a state-owned investment bank the opportunity to compete for the asset, according to testimony by former receiver Richard Downer on Tuesday. But Downer said that he could not confirm whether there was political interference in the sale of Thermo-Plastics and its subsidiary, Plas Pak Limited.
"It was a matter of opinion," he told the FINSAC enquiry under cross-examination by attorney Anthony Levy, representing Thermo-Plastics and Plas Pak's former boss, Jean Marie Desulme.
Downer, a chartered accountant and former partner of PriceWaterhouseCoopers Jamaica, admitted that he was summoned to a meeting with two cabinet ministers, Horace Clarke and Paul Roberton, as well as National Workers Union executive and Portmore Councillor Owen Saunderson, to discuss the future of the companies in January 1999 at Jamaica House.
The chartered accountant denied that the meeting was chaired by former Prime Minister P.J Patterson.
He said the meeting was convened by then FINSAC managing director, Patrick Hylton, and that he informed those present of a January 15 deadline for bids to purchase both companies, as well as the fact that he was not sure whether the National Investment Bank of Jamaica (NIBJ) was going ahead with its proposal to purchase the debenture from FINSAC.
Downer said that he was asked by Hylton to extend the deadline for the disposal of the companies to February 28, to accommodate NIBJ's interest.
He extended the deadline to March 3, but NIBJ still failed to meet it.
He was eventually instructed by Hylton to suspend the sale of the companies, to allow FINSAC to review an offer from NIBJ, the former receiver said.
Downer denied that he did not advertise the assets for sale abroad because he wanted to confine the bids. He said the receivership lasted three and a half years because FINSAC was not prepared to sell to the bidders that he submitted, although offers were coming in from 1998.
"The length of the receivership, during which our fees continued to be incurred, was due to the fact that the then debenture holders, FINSAC, instructed me, on several widely separate occasions, to facilitate the efforts of the NIBJ to buy the debentures or the businesses, and also not to entertain bids at various times that were coincident with these efforts," he said.
He said that this required him to continue the receivership instead of selling the business, "as I could have, at various times, to Omni Industries.
In the interim, we had to keep the businesses operating as going concerns, so as to get the best possible price in a sale. It was not until 2001 that the secured creditor instructed me to accept an offer from NIBJ," he said.
By the time NIBJ assumed the assets, the receiver's fees had cost the companies some J$111 million.
Downer's responses triggered an appeal from Levy for the commission to subpoena former Prime Minister P.J. Patterson to appear at the enquiry.
Commission chairman Worrick Bogle said they would reconsider the commission's earlier rejection of the request.
The enquiry resumes Tuesday, June 7.
Published: Friday | June 3, 2011 0 Comments
Richard Downer, chartered accountant and former receiver for Thermo-Plastics, testifies at the FINSAC enquiry on Monday, May 30, 2011. - JIS Photo
The disposal of Thermo-Plastics Jamaica was delayed at least three times on the request of FINSAC Limited which wanted to give a state-owned investment bank the opportunity to compete for the asset, according to testimony by former receiver Richard Downer on Tuesday. But Downer said that he could not confirm whether there was political interference in the sale of Thermo-Plastics and its subsidiary, Plas Pak Limited.
"It was a matter of opinion," he told the FINSAC enquiry under cross-examination by attorney Anthony Levy, representing Thermo-Plastics and Plas Pak's former boss, Jean Marie Desulme.
Downer, a chartered accountant and former partner of PriceWaterhouseCoopers Jamaica, admitted that he was summoned to a meeting with two cabinet ministers, Horace Clarke and Paul Roberton, as well as National Workers Union executive and Portmore Councillor Owen Saunderson, to discuss the future of the companies in January 1999 at Jamaica House.
The chartered accountant denied that the meeting was chaired by former Prime Minister P.J Patterson.
He said the meeting was convened by then FINSAC managing director, Patrick Hylton, and that he informed those present of a January 15 deadline for bids to purchase both companies, as well as the fact that he was not sure whether the National Investment Bank of Jamaica (NIBJ) was going ahead with its proposal to purchase the debenture from FINSAC.
Downer said that he was asked by Hylton to extend the deadline for the disposal of the companies to February 28, to accommodate NIBJ's interest.
He extended the deadline to March 3, but NIBJ still failed to meet it.
He was eventually instructed by Hylton to suspend the sale of the companies, to allow FINSAC to review an offer from NIBJ, the former receiver said.
Downer denied that he did not advertise the assets for sale abroad because he wanted to confine the bids. He said the receivership lasted three and a half years because FINSAC was not prepared to sell to the bidders that he submitted, although offers were coming in from 1998.
"The length of the receivership, during which our fees continued to be incurred, was due to the fact that the then debenture holders, FINSAC, instructed me, on several widely separate occasions, to facilitate the efforts of the NIBJ to buy the debentures or the businesses, and also not to entertain bids at various times that were coincident with these efforts," he said.
He said that this required him to continue the receivership instead of selling the business, "as I could have, at various times, to Omni Industries.
In the interim, we had to keep the businesses operating as going concerns, so as to get the best possible price in a sale. It was not until 2001 that the secured creditor instructed me to accept an offer from NIBJ," he said.
By the time NIBJ assumed the assets, the receiver's fees had cost the companies some J$111 million.
Downer's responses triggered an appeal from Levy for the commission to subpoena former Prime Minister P.J. Patterson to appear at the enquiry.
Commission chairman Worrick Bogle said they would reconsider the commission's earlier rejection of the request.
The enquiry resumes Tuesday, June 7.
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