Clarke raises questions about SSL external audit
Published:Wednesday | February 1, 2023 | 12:26 PM
Minister of Finance, Dr Nigel Clarke, this morning questioned the findings of a special audit on the off-balance sheet portfolio of Stocks and Securities Limited (SSL) conducted in January 2020, after external auditors gave the investment firm's book a clean bill of health.
The accounts of more than 40 people, including retired track legend Usain Bolt, were allegedly defrauded of approximately $3 billion at the private company.
Bolt's account is believed to have been defrauded between 2012 and 2017.
“There are questions to be answered as to why this wasn't detected by external auditors, by special auditors, by internal auditors, over a long period of time. And the reason is not to cast blame on anybody but to understand the weaknesses in the private sector that exist that we have got to take action on as far as regulation or other means at our disposal,” said Clarke during the Financial Investigations Division's Biennial Conference now under way at the Jamaica Pegasus Hotel in New Kingston.
The Gleaner reported on Tuesday that the audit report indicated that SSL's assets and client liabilities within the off-balance sheet portfolio reflected $34.8 billion.
The equity adjusted portfolio balances reflected $31 billion in assets.
Auditors in the five-page standalone report said that they obtained all information and explanations that were deemed necessary for the audit.
“In our opinion, proper accounting records have been maintained so far as appears from our examination of those records, and the statements on and off balance sheet assets and client liabilities, which are in agreement therewith, give the information required by the Jamaica Companies Act in the manner required,” the report dated January 27, 2020, said.
However, Clarke said that the external auditing firm, which he did not identify, will not escape questions on the massive fraud.
“The auditors will not escape scrutiny in this matter and the procedures used to provide audits will not escape scrutiny. The regulators depend on third parties to provide external audits. If there is a direction to get an audit and the audit comes back satisfactory the FSC [Financial Services Commission] cannot act on that point,” added Clarke in a direct attempt to absolve the regulatory body of negligence.
He said while not casting aspersions, questions about the process must be answered “if we are to live up to our creed that no stone will be left unturned.”
The FSC, in an October 2019 letter to SSL, requested evidence of the value of client assets and liabilities within the off-balance sheet portfolio as at September 30, 2019; the value of on-balance sheet client liabilities; and the value of assets (including liquid assets effectively segregated) that is assigned to on-balance sheet client liabilities.
In that letter, it directed the SSL to commission and execute an independent audit.
- Kimone Francis
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