How did they not know?
Published:Friday | January 27, 2023 | 12:37 AM
THE EDITOR, Madam:
The statements given by former CEOs of SSL with regard to the missing funds at the company is perplexing. Zachary Harding, former CEO, said that during his time at SSL (almost three years), he was not aware that Usain Bolt had an account at the company. Even if the account was under a company name, how could someone managing the operation and not be aware who the top clients are? The same way one would be aware of the top-performing instruments, the top salespeople or advisers, in this case, all of which are key drivers of revenues and net profit! We understand that Bolt’s company operated an account at SSL since 2012, over 10 years. If they didn’t know, I would question the competence of CEOs and management running the company.
It is also mind-blowing that a company could function, much less operate for years with such loose controls and management. According to FSC report in 2017 on SSL, there were allegations about unsafe and unsound practices, which included offer of unregistered securities, overstatement of assets, incomplete client request for proposals which did not include risk appetite of client; there were also inconsistencies in reported assets amounts and funds were overstated; client statements were deficient and did not show investment portfolio nor did they reconcile accurately with bank statements; SSL client accounts were not properly managed and even an astute client would recognised this. SSL was also operating a loan business contrary to the law. All affiliated companies must be investigated, including the ones in Cayman Islands.
It is incomprehensible that FSC, the regulatory body responsible, didn’t act on what they knew; often nepotism and politics get in the way. Even the auditors have questions to answer, how could they not know that problems were severe enough to encourage fraud considering that the company operates in the financial sector with significant portfolio of investments! At least one audit report expressed concerns that the company could continue as a going concern, given the level of irregularities, but it stopped short of raising an alarm. How could a wealth advisor defraud client accounts of millions allegedly, with informal documentation without anyone knowing, or suspecting irregularities? We know that private companies, unlike public ones, do not have the same levels of scrutiny and public disclosure; but considering SSL relied on client investments you would think that transparency and accountability were priorities by management.
My guess is that the loose controls may make it very difficult for the investigators, even the FBI, to uncover the mess at SSL. We can only hope that Usain Bolt and others affected will eventually recover most of their investments when assets are seized and liquidated.
P. CHIN