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Shaw says FINSAC to undergo audit
published: Friday | February 22, 2008
Jamaica-Gleaner.com
Minster of Finance and the Public Service Audley Shaw has ordered a forensic external audit of the Financial Sector Adjustment Company (FINSAC) and Financial Institution Services Ltd (FIS).
Mr Shaw told the House of Representatives, on Tuesday, that the purpose of the audit was to examine the sale of government companies by the entities.
"The purpose of that audit, Mr Speaker, is to examine and report on the probity, propriety and legality of sale agreements and management decisions made ... and whether the Government of Jamaica suffered any loss that could have been avoided," Shaw said.
FINSAC was established in 1997 to help bail out Jamaica's financial sector which had collapsed. The meltdown of the financial sector cost taxpayers $140 billion, which represented approximately 40 per cent of the country's gross domestic product.
As part of the bailout, FINSAC assumed indebted companies in order to save investors' money. Some of these companies were ordered sold by the courts to pay for the debts.
Stem improper management
Shaw told the House that the audit was intended to examine the "internal control systems that led to fraud in the company".
"This audit, Mr Speaker, was considered necessary because of reports of improper management and the manner in which the sale agreements of FINSAC have been conducted," Shaw said.
A case of fraud involving $26 million is now before the court. Nicasha Edwards, 27, who was employed to FINSAC as an accounting officer, is accused of committing the offences in 2005. She is also charged with larceny as a servant. She is accused of falsifying lodgements, forging signatures of signing officers and making the cheques payable to her.
On Tuesday, Shaw charged that the body had no internal auditor and did not provide financial statement to the end of March 2007, as required under the Public Management and Accountability Act.
The minister said he was not happy with they way assets acquired by FINSAC were being disposed of.
Shaw's comments came during question time which Dr Peter Phillips, leader of Opposition business, said was marked by "spurious fury".
The Chen Young saga
Dr Omar Davies, the former finance minister under whom the meltdown of Jamaica's economy took place during the 1990s, had tabled questions surrounding the sale of assets belonging to Dr Paul Chen Young assets.
Shaw said that the price of properties belonging to Dr Chen Young was below market value.
Dr Chen Young was the chief executive officer of the Eagle financial entities, which folded during the meltdown. The court had found him to be responsible for the loss of investors' money and ordered his assets sold.
The answers had hardly come when government members, Franklyn Witter, Gregory Mair and Karl Samuda, asked follow-ups of Shaw. Cross-talking and disorder soon followed as Dr Davies was accused of causing the meltdown and then giving away the country's assets.
Opposition's view
Dr Phillips rose on a point of order during the proceedings. "This is an abuse of question time and of the intention," he said.
"Instead of answering questions legitimately asked, members of the Government are taking the opportunity to abuse persons in the (previous) Government to play petty politics with the interest of the country.
"If they want to engage in witch-hunts Mr Speaker, then we can all decide to just have fisticuffs, if that is the intention.
"If they want to discuss who had debts and didn't pay, then we can go down that road," Dr Phillips said, but this was met with shouts of "call name" from government MPs.
Meanwhile, Shaw, responding to a question from Mair as to whether there would be a commission of enquiry into the cause of the meltdown, which he called a total disaster said, "It is my own view that a commission of enquiry, which would be dedicated to pinning down all the precise circumstances that led to such a devastating disaster upon Jamaica, is necessary."
published: Friday | February 22, 2008
Jamaica-Gleaner.com
Minster of Finance and the Public Service Audley Shaw has ordered a forensic external audit of the Financial Sector Adjustment Company (FINSAC) and Financial Institution Services Ltd (FIS).
Mr Shaw told the House of Representatives, on Tuesday, that the purpose of the audit was to examine the sale of government companies by the entities.
"The purpose of that audit, Mr Speaker, is to examine and report on the probity, propriety and legality of sale agreements and management decisions made ... and whether the Government of Jamaica suffered any loss that could have been avoided," Shaw said.
FINSAC was established in 1997 to help bail out Jamaica's financial sector which had collapsed. The meltdown of the financial sector cost taxpayers $140 billion, which represented approximately 40 per cent of the country's gross domestic product.
As part of the bailout, FINSAC assumed indebted companies in order to save investors' money. Some of these companies were ordered sold by the courts to pay for the debts.
Stem improper management
Shaw told the House that the audit was intended to examine the "internal control systems that led to fraud in the company".
"This audit, Mr Speaker, was considered necessary because of reports of improper management and the manner in which the sale agreements of FINSAC have been conducted," Shaw said.
A case of fraud involving $26 million is now before the court. Nicasha Edwards, 27, who was employed to FINSAC as an accounting officer, is accused of committing the offences in 2005. She is also charged with larceny as a servant. She is accused of falsifying lodgements, forging signatures of signing officers and making the cheques payable to her.
On Tuesday, Shaw charged that the body had no internal auditor and did not provide financial statement to the end of March 2007, as required under the Public Management and Accountability Act.
The minister said he was not happy with they way assets acquired by FINSAC were being disposed of.
Shaw's comments came during question time which Dr Peter Phillips, leader of Opposition business, said was marked by "spurious fury".
The Chen Young saga
Dr Omar Davies, the former finance minister under whom the meltdown of Jamaica's economy took place during the 1990s, had tabled questions surrounding the sale of assets belonging to Dr Paul Chen Young assets.
Shaw said that the price of properties belonging to Dr Chen Young was below market value.
Dr Chen Young was the chief executive officer of the Eagle financial entities, which folded during the meltdown. The court had found him to be responsible for the loss of investors' money and ordered his assets sold.
The answers had hardly come when government members, Franklyn Witter, Gregory Mair and Karl Samuda, asked follow-ups of Shaw. Cross-talking and disorder soon followed as Dr Davies was accused of causing the meltdown and then giving away the country's assets.
Opposition's view
Dr Phillips rose on a point of order during the proceedings. "This is an abuse of question time and of the intention," he said.
"Instead of answering questions legitimately asked, members of the Government are taking the opportunity to abuse persons in the (previous) Government to play petty politics with the interest of the country.
"If they want to engage in witch-hunts Mr Speaker, then we can all decide to just have fisticuffs, if that is the intention.
"If they want to discuss who had debts and didn't pay, then we can go down that road," Dr Phillips said, but this was met with shouts of "call name" from government MPs.
Meanwhile, Shaw, responding to a question from Mair as to whether there would be a commission of enquiry into the cause of the meltdown, which he called a total disaster said, "It is my own view that a commission of enquiry, which would be dedicated to pinning down all the precise circumstances that led to such a devastating disaster upon Jamaica, is necessary."
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