Dawn Ritch, ContributorReaders will know that I care deeply about the ability of people to make lots and lots of money in a safe and honest environment right here in Jamaica.
That means I abhor the rape and deliberate destruction of the domestic financial sector. I can't bear to think of it being owned by foreigners, except partly, and in a highly regulated way.
All we have is Jamaica, and Jamaica should belong to Jamaicans. Anybody who feels differently can go and live in Trinidad or Barbados.
In the meantime, I earnestly hope that the local titans of industry - what remains of them - make pots of money. The only relief possible will be to see the richest Jamaicans and the biggest Jamaican companies buy back the domestic financial sector from its current overseas interests. In that way, the profits can remain in Jamaica, or be repatriated to this country.
Unfortunately, most Jamaicans are still only buying government paper and investing in Ponzi schemes. Companies regulated by nothing, claim not to be taking deposits or dealing in securities, but borrowing money on promissory notes and paying the lender 10 per cent monthly. Some people are selling their businesses in order to invest in these schemes.
Who can blame them? These schemes are paying 150 per cent, annually compounded. No business gives that kind of return; no bank either.
With the exception of banks and building societiesthat are regulated by the Bank of Jamaica, life-insurance companies and securities dealers licensed by the Financial Services Commission, all other lenders may only lend money at an interest rate within the Monetary Lending Act, which is approximately 30 per cent.
Ciboney hotel deal
Years ago, when it was 12 per cent, Dr. Paul Chen-Young found himself at the blunt end of that instrument in the Ciboney Hotel deal. Dr. Chen-Young's former Crown Eagle lent Ciboney money at rates then above, and they said they were not paying it up. Horace Barber, a former financial secretary and governor of the Bank of Jamaica, was asked by the Government to step in to settle the matter. He wrote off most of the principal and interest, thereby rewarding the borrowers.
A banker has advised me that loan contracts calling for interest rates over and above that provided by the Money Lending Act are illegal, unless the minister exempts the lender from the provisions of the act. Without this exception, such contracts are null and void and unenforceable. Neither interest nor principal is therefore repayable.
I wonder, therefore, whether or not the lenders to these various entities currently around today - some of whom are ordinary, poor citizens trying to eke out a living - have sought and received permission from the Ministry of Finance to do so. Probably not, which means that the schemes borrowing their money don't have to pay them back. It is even more alarming that some individuals are mortgaging their homes and selling their businesses in order to lend money to these schemes. The operators of these schemes, were they to elect on Monday morning to not repay these loans, could cause the destitution of the lenders.
There is an old Jamaican saying, 'Donkey seh de world nuh level'. Internationally, it's called not having a level playing field. But these are my donkeys, and I care about them enormously.
For the record, I have never had any shares in the former Eagle financial network, nor sat on any of its boards. My advertising agency, along with a number of other agencies, had the honour to do some of the companies advertising.
Dr. Chen-Young has never paid me a retainer of any kind, nor drawn a single cheque to me. I say all of this because some people seem to think that my support for the former Eagle chairman is due to my personal interest in the financial network. My interest was professional, and continues to be so.
Peevishly destroyed
Readers might recall that before the financial meltdown in the mid-90s, Jamaica was indeed largely owned by Jamaicans. They were building thriving financial institutions before that 'first-class and First-World' Minister of Finance peevishly destroyed it. He continued relentlessly to persecute the very persons he had encouraged to invest in Jamaica's development. Dr. Omar Davies eventually succeeded in selling their hard-earned assets for a mess of pottage to foreigners.
How a Finance Minister who hiked interest rates to the highest level in the world, and bankrupted borrowers on a scale never seen before, can persistently deny responsibility for this cavalier and pointless action continues to baffle me. Several thousand people lost their businesses, and even their homes.
Dr. Chen-Young made his customers prosperous by assisting them in either starting a business, expanding their business, or to own a vehicle and a home. He was doing well himself, until the Government took away everything he'd worked for.
I am overjoyed, therefore, that the Miami courts have rebuffed the depredations of the Jamaican Government when they tried to enforce their judgment in the United States. I don't wish to comment at this time on the proceedings in the Jamaican court, which procedures have also been called into question by the American justice system. I understand that these proceedings are likely to be similarly challenged here, hence my decision not to comment.
Dr. Chen-Young should still be in Jamaica, head of Eagle, continuing to help make Jamaica and its citizens prosperous.
It should be noted that the first financial group to have successfully forged a relationship with an investment banking group in the United States, namely Prudential Securities, was Eagle Merchant Bank, in 1993. Eagle was also the first Jamaican institution to raise money on the international capital market. This was achieved long before any other bank in Jamaica, or the Government of Jamaica was able to do so.
When I survey the economy today, Dr. Chen-Young still has few equals. It's the same law but applied in different ways to different entities ... to persecute some, and now to enrich others.
