InterTrade creditors owed J$3b

McPherse Thompson, Assistant Editor - Business

The Financial Services Commission (FSC) is awaiting judgment on an order it sought in the Supreme Court to stay the continuation of proceedings commenced by parties against securities and fund management firm Intertrade Finance Corporation, given what is said was the indebtedness of the company.

The regulator is also separately seeking an order to wind up the operations of the New Kingston-based Intertrade Finance with a view to liquidating its assets to satisfy creditors to the tune of about J$3.6 billion.

The FSC has confirmed that when the case, seeking the order to stay the continuation of proceedings, last came up for hearing in the Supreme Court before Justice Mangatal on December 14, the judge heard submissions and reserved judgment.

"It is expected that once Justice Mangatal has prepared her judgment, the FSC will be notified to attend court," the FSC said via email last Wednesday.

"The FSC cannot say when this judgment will be handed down."

COK Sodality Co-operative Credit Union was among parties that took legal action against Intertrade, from which it is seeking to recover an undisclosed amount of money.

The FSC said it is not at liberty to discuss any matter connected with COK, given the order of the court.

COK's chief executive officer, Jacqueline Mighty, was unavailable for comment last Thursday and the credit union's attorneys, Hamilton Brown-Hamilton and Associates did not respond to queries up to press time.

In a notice published in mid-October, the FSC said the sum of the total claims submitted by investors of Intertrade Finance Corporation was $3.427 billion.

potential liabilities

The potential liabilities of Intertrade, including debts to the tax authorities, employees, utility service providers, investors and other creditors, were unearthed during the FSC's temporary management of the company and its subsidiary, Intertrade Investments Limited, also based in New Kingston.

There are also debts in relation to Intertrade's cambio business, the FSC said.

The regulator said that based on the records and information received it "has reason to believe that Intertrade is insolvent".

Moreover, the estimated value of the company's available assets identified is approximately J$1.137 billion, a shortfall of J$2.4 billion relative to its outstanding liabilities, the FSC said.

The commission said that during its temporary management, its authorised officers examined such records as were maintained at the offices of Intertrade and conducted interviews with clients, employees and former employees of the company.

"In forming its assessment of the assets and liabilities, the FSC relied on such information as it received from the staff of Intertrade, its review of Intertrade's incomplete records, and the claims presented by investors and creditors," it added.

"The liabilities appear to be approximately J$3.596 billion, using current exchange rates. The total claims submitted to date by investors is $3.427 billion. In addition to these investor liabilities of $3.427 billion, Intertrade owes a number of other creditors, including salaries and statutory deductions of approximately J$4.8 million, redundancy payments of approximately J$7.5 million and taxes of J$36 million," said the regulator.

The FSC also advised creditors that it too is a creditor of Intertrade because of expenses incurred in relation to its temporary management of Intertrade.

The assets of Intertrade are subject to two freeze orders obtained by institutional clients of the company in separate court proceedings.

The FSC did not name the institutional clients, but COK was known to have been granted a Mareva injunction, or freeze order, prohibiting Intertrade from disposing of its assets until the matter has been heard and determined by the court.

In addition to filing a petition to wind up the operations of the company, the FSC said it continues to collaborate with other government agencies, including the Financial Investigations Division and the Director of Public Prosecutions, to take action to protect the interests of investors of the indebted company.

mcpherse.thompson@gleanerjm.com