Tweet
'I feel like I want to vomit' - another Finsac horror story
Former hotelier tells of $5-m loan increasing six-fold under Finsac
BY PATRICK FOSTER Observer writer [email protected]
Wednesday, March 09, 2011
FORMER proprietor of the Little Pub Hotel and Restaurant in Ocho Rios, Keith Foote, yesterday told the Financial Sector Adjustment Company (Finsac) Commission of Enquiry how mounting interest rates in the 1990s pushed his $5-million loan to $33 million, eventually leading to the loss of his home in 2002.
Foote, joining a long list of aggrieved small entrepreneurs giving testimony at the enquiry into the 1990s meltdown, said that he was treated with disdain when he approached Finsac to renegotiate the loan after paying $26 million toward the debt.
"Coming here today I did not want to come because I did not want to meet anybody who had anything to do with Finsac," commented a distraught Foote at yesterday's sitting of the enquiry at the Jamaica Pegasus Hotel in Kingston.
"Everytime I remember them, I feel like I want to vomit," declared the former Ocho Rios hotelier who said he lost his home to Finsac after repaying more than 75 per cent of the claimed debt.
<span style="font-weight: bold">Foote told the Commission that he borrowed $5 million from National Commercial Bank (NCB) to effect repairs to his Little Pub establishment after Hurricane Gilbert, in 1988, extensively damaged the property.</span>
But according to Foote, the interest rates began to climb, putting pressure on his company's ability to make on-time repayments.
<span style="font-weight: bold">"It was impossible to keep current. I recalled a time when interest rate rose as high as 90 per cent</span>," Foote said.
He admitted that the account was in arrears, but emphasised that he had serviced the loan for years and had repaid $15 million up until the time Finsac acquired NCB.
<span style="font-weight: bold">Foote said at the time of the Finsac takeover, in spite of the $15 million that had already been paid on the $5-million loan, he was told the balance still stood at $33 million.</span>
Yesterday, responding to questions from attorney Judith Clarke, who is marshalling evidence on behalf the Commission, Foote said that with assistance of the Jamaica Tourist Board (JTB) he sought a reprieve from Finsac but was denied.
"In fact, I was laughed at," he remarked, adding that Finsac representatives had even scoffed at the intervention of the JTB on his behalf.
As a consequence, Foote said he borrowed a further $30 million from Capital and Credit Merchant Bank, paid Finsac $26 million and used the balance to finance incidentals such as bank charges and accountant's fees.
"I asked if they could forgive some of the debt after the payment of $26 million but they again turned me down, they said they wanted every dime," Foote declared.
"They [Finsac] said that the balance of $7 million should be paid in two weeks or I would lose the pub," he testified.
According to Foote, Finsac representatives demanded that his apartment — a two-bedroom penthouse at Fisherman's Point in Ocho Rios — be sold to recover the difference owing.
"I had no choice," said the former hotelier.
"They held me down and took it from me," he remarked.
"I pleaded with them to allow me to keep my apartment and to settle the remainder by paying monthly instalments, they refused to allow this," Foote said in his witness statement.
<span style="font-weight: bold">Evidence presented at the enquiry showed that in 2004 Foote's apartment was sold for $3.3 million, approximately a half of the balance owed to Finsac by the former hotelier.</span>
Foote testified that in 2002, apartments in his beachfront complex were valued between $7.5 million and $9 million.
"I would like this Commission to take steps to ascertain from Finsac's records what steps were taken to dispose of my apartment at a fair market price," Foote said in his statement.
Read more: http://www.jamaicaobserver.com/news/...#ixzz1G7erGqAE
Comment