Tue | Mar 28, 2023

FSC blocks SSL wind-up

Published:Thursday | January 26, 2023 | 1:26 AMKimone Francis/Senior Staff Reporter
Hugh Croskery
Hugh Croskery

Founder of scandal-scarred Stocks and Securities Limited (SSL), Hugh Croskery, has declined to comment on the Financial Services Commission’s (FSC) securing of a court order Wednesday blocking attempts by directors of the investment firm to liquidate its assets.

Croskery, who is also executive director of the fraud-hit company, said that he was instructed not to speak on matters related to SSL, which is under the temporary management of the FSC.

SSL Chairman Jeffrey Cobham could not be reached for comment as calls to his cell phone went unanswered.

Minister of Finance Dr Nigel Clarke disclosed late Wednesday that the state regulator obtained court orders to block SSL, its trustee, and directors from applying for voluntary liquidation.

Clarke said on or about January 16, SSL applied to the Companies Office of Jamaica for a members’ voluntary wind-up.

He said prior to this, the FSC had put the company under temporary management, using its powers under the Financial Services Commission Act.

“To effect its temporary management, the FSC went to court to prevent the company from going through the process of winding up itself,” Clarke said.

Companies seek to wind up when there are unfavourable business conditions that threaten their future. Additionally, the company may have been designed to be in business only for a set period or for a specific purpose that has been fulfilled. The company could also be seeking tax relief or be looking to reorganise and transfer assets to another company.

The FSC court orders have blocked SSL directors from disposing of; dealing with assets and liabilities in SSL’s name or its clients’ names; or withdrawing, transferring, or otherwise dissipating any funds from accounts in its name wherever held.

The FSC has also restrained SSL from interfering with the probe into the defrauding of dozens of accounts, including track legend Usain Bolt, of approximately $3 billion and to comply with the directions of the FSC and temporary manager Ken Tomlinson and those under his direction.

The FSC is also seeking to stop SSL directors from reorganising the company or its operations, whether it be in any document form or organisation of its members, or the assets and liabilities.

The Gleaner contacted Tomlinson, but he declined to comment on the development.

On Tuesday, Prime Minister Andrew Holness declared that his administration would not bail out any failed financial institution.

He was speaking at the annual Jamaica Stock Exchange capital markets conference.

“The Government will not socialise any debt, and we will not socialise the failure of our banks. They need to be prudential and protect their customers,” said Holness, who went off script in his address.

“Were we to do that, it would send a bad signal to the banks and the investment houses that they can be negligent and expect the coverage of their negligence. That took us into a crisis, which took us decades to get out of and made the entire country poor,” he said.

The bailout of the failed financial sector in the late 1990s rescued the savings of thousands of depositors.

It, however, crippled the Government’s ability to spend on activities that would help grow the economy.

Jamaica’s debt levels kept rising up to 2013.

At that time, Jamaica’s debt was one and a half times larger than all the things produced in the island combined.

Now, it is just about the size of all things produced, with just a bit to spare on the capital side of the Budget.