SSL gets US$1m insurance payout, gov't funds no longer required - Clarke

Finance Minister Dr Nigel Clarke says public funds are no longer necessary to pay the salaries and operational expenses of fraud-hit Stocks and Securities Limited (SSL).

He says SSL has received an insurance payout of US$1 million (J$155 million) which was used to pay the August bills. 

“With this new development, no taxpayer money, no Government of Jamaica resources, no public funds have, or will be, used to support SSL in the payment of any of its employees or any other of its expenses," Clarke said in a statement on Tuesday.

The Government has faced public backlash after Clarke announced earlier this month that about $15 million of public money will be used to cover expenses at SSL to avoid disruptions in the ongoing investigations into the alleged fleecing of more than $4 billion from clients.

Staff at the private investment and brokerage firm stayed off the job in late August to protest the non-payment of the funds. 

Clarke sought to clarify that the money was not directly from tax collections but from proceeds of ill-gotten gains recovered by the Government's Financial Investigations Division. 

Commentators and the Opposition People's National Party dismissed the distinction about the source of funds and demanded to know all the costs involved in the probe and for how long public funds would be used.

In his statement, Clarke said SSL received the insurance payout on September 7, which allowed the August salaries to be paid without a drawdown from the Financial Services Commission (FSC) which took temporary management of SSL in January when the alleged fraud was reported.  

He said the insurance claim was made to the insurers in England in April by Kenneth Tomlinson, the temporary manager installed by the FSC. The agency regulates investment houses.

Clarke said approximately two-thirds of SSL's net salary bill for August was paid last Monday, without any financial support from the government. The other one-third had been paid earlier by SSL.

The US$1 million insurance payout represents the maximum limit claimable under SSL's insurance policies, the finance minister explained. 

Some 22 persons are employed at SSL and their total monthly wage bill is $9.5 million, Clarke said earlier this month. 

There are also other operating expenses of $5 million monthly, in addition to one-off fees for legal services, among other things.

Clarke had argued that the situation was not similar to the government's bailout of failed financial institutions during the 1990s crisis.

"It should be noted, however, that complete removal of SSL as a contingent liability of the GOJ requires a final determination by the Court on the issues surrounding who has proper authority over SSL: whether it is the Financial Services Commission's appointed Temporary Manager or the SSL Board appointed Trustee," the minister said. 

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