Erica Virtue, Staff ReporterA commercial bank, which lent $7 million to a local company, is seeking the help of the Registrar of Companies to find the company and its principals who have disappeared with the institution's money.
The company, which has not filed any returns to the Registrar of Companies in almost 20 years, would ordinarily be delisted as it was not in good financial standing.
However, because of the pending court action, The Registrar of Companies cannot delist the company, as it must provide the names of the directors and the address of the businesses for the Writ of Summons to be directed there.
While the Registrar is duty bound to provide the bank with information, the bank, however, cannot divulge any information to the Registrar with information on the delinquent company, because it's a breach of client confidentiality, Registrar of Companies officials say.
Information reaching The Sunday Gleaner is that the bank is one of several lending agencies searching for businesses which have borrowed millions of dollars, however, the directors have closed shop and fled.
Compliance manager at the Registrar of Companies, Shellie Leon, said the cycle is a vicious one.
"In the case of the delinquent company, it was not paying us anything. But a bank has lent it $7 million. But we cannot remove the company although it has not filed returns in about 20 years. We cannot remove them, and we cannot find them. And the same bank that is owed say they cannot give us any information about the company because it is a breach of confidentiality," Ms. Leon said Thursday.
She said, however, that if the banks sue, they need to serve the Writ of Summons at the registered offices of the company and "we are the ones with that detail."
"So they would really be helping themselves, if they help us," she said.
She cautioned that "It is important that they (lending institutions) verify the status of the companies they lend money," she said.
She also explained that "Some companies are delinquent to public and private entities, but we (The Registrar) know about them if they are delinquent to us."
When the new Companies Act of 2001 comes into law, companies will be required to get a compliance certificate from the Registrar of Companies to exercise borrowing powers. Non-compliance with requirements will see fines of $50,000 imposed on companies, in addition to paying the court costs and the outstanding sums.
