NIBJ Outameni write-off condemns NHT board
Aubyn Hill, Financial Gleaner COLUMNIST
BEFORE THE National Investment Bank of Jamaica (NIBJ) was merged with the Development Bank of Jamaica (DBJ) in September 2006, it gave a US$500,000 loan in early 2005 to the Outameni Experience business that was being promoted as a new venture by Lennie Little-White.
The NIBJ acted as a government-owned venture capital firm and, as such, took venture capital risks that were invariably higher-than-normal commercial risks.
The lending experiences of the NIBJ proved to be fraught with high risks and the organisation did lose a lot of taxpayers' money.
Nonetheless, the high-risk-taking business was its mandate and all government officials and taxpayers knew that was the case.
I was the chairman of the NIBJ for a short while and one of my main duties was to oversee its merger with the DBJ, which was done within about a year of my joining the board of NIBJ.
The Outameni transaction was inherited by the DBJ and, in time, its board made a decision to treat its stake in Outameni as a loss.
Boards and management of banks do that from time to time, and one would find that DBJ has written off more than Outameni's outstandings.
Commercial banks like National Commercail Bank, Scotiabank and, recently, the former RBC Royal Bank - quite publicly - have written off large amounts over the years. Indeed, in these very hard economic times, many small and not-so-small commercial businesses have had to be writing off debts which their customers simply cannot pay.
So why - when NHT board members had the NIBJ experience to learn from - did they buy the Outameni business?
As more and more revelations are made, it is becoming quite clear that there are at least two private-sector companies that are substantial beneficiaries of this NHT purchase - which many are now calling a bailout.
Mr Little-White's protestations that he did not get a dollar of the proceeds can be put aside.
What both Mr Little-White as principal owner of Outameni and Capital and Credit Merchant Bank (CCMB) received from the NHT's possibly out-of-mandate $180-million spend was the opportunity to clear up some debt. Mr Little-White got to pay the loan owed to CCMB.
Given former board member Dr Davidson Daway's public claim that the Outameni purchase was not agreed at the December 2012 board meeting as claimed by current NHT Chairman Easton Douglas, and other newspaper reports of Mr Douglas, as chairman, announcing that the decision to purchase was made already, the board chairman could only have got such a directive from very high in the political directorate above him.
FIGMENTS OF IMAGINATION
Further, Mr Douglas' claim of a unanimous decision by the board to purchase the Outameni business - not the lands as claimed in a subsequent presentation by the NHT's portfolio minister, Prime Minister Portia Simpson Miller, in Parliament - appears more and more like a figment of his very experienced imagination, or something worse.
As we hear from those who are involved and are trying to draw the wagons around this scandal involving some of the poorest Jamaican taxpayers' money, the more we hear really wild imaginings.
We are being asked to accept and swallow what appears to be some barefaced foolishness. Take this example: The chairman of the NHT is a former minister in a former People's National Party (PNP) administration, who was appointed to the NHT board by Mrs Portia Simpson Miller - and for about two years, he told her nothing about this major transaction!
Nor did the businessman, who after being appointed to the NHT board, became the treasurer of the PNP (and did not resign from the NHT board), and is known as a very shrewd businessman, tell his party leader - and our prime minister - about the NHT's plans to use poor taxpayers' money to buy a perennial loss-making business?
And then there is the senator, who was appointed to the Senate and the NHT board by the prime minister, whose kitchen cabinet he is said to be a part of - he told her nothing? Plus, he represents workers as a union leader, yet he thought buying this year-after-year loss-making business was the best way to spend poor Jamaican's taxes - and does not advise the prime minister who extended such trust in him with her double, major, appointments?
So, too, the lady from the Office of the Prime Minister, whom she appointed to the NHT board, failed - for two years - to tell her boss about this decrepit deal!
Pulitzer Prize-winning author John Kennedy Toole, wrote a fascinating novel called A Confederacy of Dunces. These prime ministerial appointments look like such a confederacy against her, and us. Or do they think we are all dunces?
Prime Minister Portia Simpson Miller is obliged to fire her appointees for keeping her so long and wickedly in the dark.
Aubyn Hill is CEO of Corporate Strategies Ltd and chairman of the opposition leader's Economic Advisory Council.Email: firstname.lastname@example.orgTwitter: @hillaubynFacebook: facebook.com/corporate.strategies