US$10 million in loans from SSL debtors to be collected
Overseas portfolio of SSL to be liquidated
Published:Friday | February 23, 2024 | 12:18 AMAvia Collinder - Business Writer
THE FINANCIAL Gleaner has been reliably informed that promissory notes valued at around US$10 million are due for collection from connected companies of Stocks and Securities Limited (SSL).
SSL, a brokerage house facing dissolution after the discovery of fraud, is being dissolved in a process which will see clients get back as much of their assets as is possible.
The company came under the supervision of the FSC in 2022 after high levels of fraud were reported in January of that year.
Sprint legend Usain Bolt and other investors were reportedly fleeced of almost a billion dollars, while the Financial Investigations Division reported another $830 million missing from accounts of another 40 clients.
Pursuant to its powers under Section 8(b) of the Financial Services Commission (FSC) Act, the FSC served notice of its intention to assume temporary management of SSL on January 17, 2023, appointing Kenneth Tomlinson of Business Recovery Services Limited as the temporary manager.
On February 18, 2024, a new update was issued, which stated that phase two of the recovery process will now be pursued and that this involves asset recovery.
Client assets are currently grouped into four categories: cash, local securities, overseas securities and promissory notes issued by SSL-related companies.
The update said that the final phase in the process of transferring clients’ assets will see “action being taken in relation to the asset category of promissory notes”.
In this regard, it was noted, “Action regarding the related party promissory notes will be subject to the financial condition of the SSL group.”
A promissory note is a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.
The source told the Financial Gleaner that many of the loans in question were long overdue and are being investigated. Total value was in the ballpark of US$10 million.
The FSC indicates that funds have been disbursed, on request to over 200 clients, amounting to $626 million.
Meanwhile, an updated total of $14.5 billion in client-owned securities have been transferred to other brokerage houses for account management on their request.
It was also noted that the offices of SSL will be relocated from its current location to 1 Connolley Avenue in Kingston, effective February 26, 2024.
The FSC said that as phase two of the recovery process ensues, the overseas portfolio of the company will now be liquidated to satisfy client demand for their funds.
“After pursuing all other possible solutions, and considering the cross-border nature of these assets, the decision has been made to liquidate the international portfolio and remit funds directly to clients as soon as the reconciliation process is complete,” the FSC stated.
It had previously indicated that phase one involved asset recovery from cash and local securities.
The Commission said, “We are pleased to report that even more significant progress has been made in dealing with these asset categories.”
As of February 16, 2024, over 1,000 client accounts totalling approximately $14.5 billion of local securities were transferred to facilitate access by SSL clients through brokers and institutions.
Temporary manager Business Recovery Services continues to manage the entity in collaboration with the FSC, “safeguarding client accounts, supporting ongoing investigations, locating and securing assets of SSL, and executing the phased approach to the transfer of client assets”, it was noted.
The supervisory body said that the next update will be delivered on March 31, 2024.