Chartered accountant and public commentator, Dennis Chung, is expressing confidence that Jamaica’s financial sector remains strong despite the black eye it has sustained in large part due to the global status of national icon Usain Bolt, who is among dozens of clients affected by a massive fraud at investment company Stocks and Securities Limited (SSL).
Chung, in an interview, said: “we always have to be weary of it (any potential fallout) because the financial system is very sensitive and it’s really confidence that keeps a financial system going – confidence in money, confidence in regulators, and so it is important for us that our regulatory environment is very strong.
“It doesn’t mean that we should go overboard and try to over-regulate. What we need to do is enforce what we have in place,” he emphasised.
Chung also said there is unlikely to be any long or medium-term issue related to confidence in the Jamaican financial system.
“The financial system is very strong and what is obvious here is that it was a situation of a rogue organisation, which happens in every country. Even in the United States we have these situations arising every day.”
The public commentator asserted that what is important is the effectiveness of the regulator, in this case the Financial Services Commission (FSC).
He said media reports this week explained why the licence of SSL, which was flagged as a “problem institution” as far back as 2017 by the FSC, was not suspended, were “clearly explained and make sense where it details all the actions that were taken to bring the organisation up to the required standard, and I think that the actions taken seem to be good. What needed to happen was that as soon as this situation broke, the FSC should have been very transparent, to say ‘these are the things that we have done'”.
According to Chung, what caused a greater level of consternation in the society was the debacle of a press conference that was held by the now former executive director of the FSC, Everton McFarlane, who failed to answer reporters’ questions during a press conference he called last Wednesday.
“I think it (the press conference) was a disaster,” Chung remarked.
“You can’t have a press conference like that and you are not explaining to the people what was done.”
Yet, Chung acknowledged that on the face of it, it appears that the FSC did what it was supposed to do, but that was never explained by McFarlane when he had the opportunity to do so.
McFarlane was asked by Finance Minister Dr Nigel Clarke to demit office the day after the disastrous press conference.
At his own press conference on Monday, Clarke said McFarlane “did not cover himself in glory” at the press conference he had called, with Clarke also stating that it is extremely important to have confidence in the financial system.
For Chung, there are still questions to be answered, including what was the state of the company internally, for example with audit reports that were issued, and “how did they follow up with management letters”.
“Those are questions that should be answered internally,” he insisted, while acknowledging that the FSC may not be privy to all those internal details which are what the management and the board of the SSL need to address.