Factories Corporation going after money paid to lawyer who didn't deliver
The Factories Corporation of Jamaica (FCJ), hit by an audit this year highlighting potential fraud and corruption at the government entity, has finally commented on the matter, declaring it will be "aggressively" trying to recover funds not turned over to the body for the sale of properties.
The new board, chaired by Lyttleton 'Tanny' Shirley, advised of its stance on Auditor General Pamela Monroe Ellis' June findings that funds were not fully handed over to the FCJ from the sale of one of its properties, along with interest.
In her report, the auditor general noted that the FCJ had called in the Fraud Squad in relation to an attorney not handing over $70 million for the 2011 sale of the property.
Since then, interest and penalties totalling $39.6 million have been applied to the outstanding amount.
While there's been no update on the police probe, the FCJ said it is going after $750,000 advanced on December 22, 2011 to the attorney contracted at a cost of $3 million to review the FCJ's Policy and Procedures Manual.
That review, according to the auditor general, was not delivered, and the lawyer's services terminated in September 2012.
"The matter has been handed over to the General Legal Council. The FCJ board intends to aggressively pursue this matter to recover all funds due from the sale of the property in question," read the statement from the FCJ's board.
SEEKING LEGAL ADVICE
Meanwhile, the FCJ said it was seeking legal advice on the action to take in relation to the finding that two former FCJ board members were engaged to provide paid legal-conveyancing services to the entity while five former members were engaged at a cost of $25 million to provide paid management-related services to the corporation.
"The FCJ is seeking, among other things, independent legal advice as to whether the directors in question acted in breach of their fiduciary duties to the corporation and, if so, what causes of action may lie against them," the board said.
"Once this advice is received, the FCJ board will consider its next steps in the matter."
The new board said it has "accepted that the auditor general's findings are reflective of lack of adherence to corporate governance practices at the FCJ" during the relevant points in time.
However, it sought to point out that the auditor general's findings are for financial years 2010-2011 to 2014-2015, which covers the tenure of two different FCJ boards of directors.
The FCJ, which currently owns assets in excess of $9 billion, is the largest provider of industrial and commercial factory space and real estate in Jamaica.