Finance Minister Dr. Nigel Clarke
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Dr. Nigel Clarke, speaking with 'Morning Agenda' host Jodi-Ann Quarrie, and Opposition Spokesman on Finance Julian Robinson
Finance Minister Dr. Nigel Clarke says the duration of the fraud investigation at Stocks and Securities Limited (SSL) will determine how long the government will continue paying the salaries of employees of the investment firm and funding other expenses related to the probe.
The government is spending approximately $15 million monthly on salaries for SSL employees and other operational expenses to avoid disruptions in the investigation into the alleged fleecing of more than $4 billion from clients.
Dr. Clarke is facing criticism from the Parliamentary Opposition for his explanation that it is government resources through the Financial Investigations Division and Financial Services Commission and not tax revenues which are being used to cover the costs.
Opposition Spokesman on Finance Julian Robinson says the resources are public funds.
Speaking Friday on the Morning Agenda on Power 106 FM, Dr. Clarke reiterated that it is necessary to extend government resources to the probe at SSL to determine the full nature and extent of the fraudulent activities at the investment firm.
"We don't want to foreclose on the opportunity that investigators have. This must be an open, a thorough, a complete investigation. And I know that on that score, I have the support of the Jamaican people. What I am trying, what I am communicating, however, is that in order to achieve that, which all well-thinking Jamaicans want, we need to keep them there for just a little while longer. And that will change as soon as investigators indicate that they are happy," he disclosed.
The minister maintained that the funds from the FID are from assets confiscated under the Proceeds of Crime Act, that do not constitute tax revenues.
Recovery of funds?
Asked whether the government will be able to recover the funds spent on the SSL investigation, Dr. Clarke said he did not want to "engage in trying to predict the future".
He insisted that the investigation is at a critical stage and must be thoroughly completed so that perpetrators and conspirators are brought before the court.
But Dr. Clarke's statement has not been well received by the Parliamentary Opposition, with Spokesman on Finance Julian Robinson suggesting that the minister's response is unacceptable, given that public funds are being expended.
"If you have committed to supporting the investigation all the way through, then you must have a plan about how you're going to get back the money at the end of the day, given that this is a private entity, because it will then raise questions about what precedent you are establishing. If in the future another private entity collapses under mismanagement and fraud, will the government step in again and support an investigation all the way through?"
He continued to question what steps if any the government has taken to protect the assets of SSL "so that if you get to court action there is something to recover".
The opposition spokesman also maintained that the true cost of the investigation into the fraud at SSL has not been disclosed by the government, despite the Finance Minister outlining the monthly figure for salaries and operational expenses at the investment company.
"He hasn't said what the expenses of the forensic auditing firm is, he has not said what expenses of the receiver manager is, and then maybe other expenses, legal or otherwise, associated with the work; none of us know what those expenses are. The $15 million only represents the staff members who are there," Mr. Robinson complained.
SSL client funds
Dr. Clarke said Stocks and Securities Limited will shortly begin transferring the balances of its clients to other brokerage dealers of their choice.
He said the management of SSL has been meeting with the Jamaica Stock Exchange and Central Security Depository as part of the process to transfer clients' balances.
The number of accounts defrauded at SSL moved from 40 to 70.
Dr. Clarke reiterated that the government is not in a position to subsidise the losses of the 70 clients.
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