Current Affairs

Current Affairs




Don't blame NIBJ, says Patterson
Observer Reporter
Thursday, March 21, 2002



PATTERSON... NIBJ did not have final decision-making competence

PRIME Minister P J Patterson insisted last night that the National Investment Bank of Jamaica (NIBJ), for which he has portfolio responsibility, did not have the "final decision-making competence" in approving loans under government's INTEC programme.

"While NIBJ had certain powers to appraise and to recommend they did not have the final decision-making competence," Patterson told Parliament. "That (authority) rested with the LAC (loan approval committee) led by the Ministry of Industry, Commerce and Technology, because it was that ministry that had received the parliamentary vote for purposes which were set out to Parliament and in subsequent ministry papers."

SAMUDA... NetServ as a scam from the start

"I am not saying this... to exonerate the NIBJ for any culpability," he added. "I am simply saying what were the facts and... the chain of accountability, financially and ministerially in respect of this matter."

Patterson was participating in six-hour long debate on a motion moved by Opposition member, Karl Samuda, on the management of the fund, which loaned approximately $700 million to IT start-ups.

The programme was part of the government's plan to create 40,000 jobs in the information technology sector over three years, but only a handful of those jobs have materialised and a report by the auditor-general has said that the INTEC fund was poorly managed and the interest of the government not well protected.

The management of the fund came under sharp scrutiny in December when it emerged that NetServ, a collapsed company that operated a call centre, received $180 million in loans without the most basic of norms in such arrangements being followed.

In fact, NetServ got its first drawdown of $95 million before a proper due-diligence was done and got more even after two due diligence reports suggested that the company's principal, Paul Pereira and some of his colleagues were shysters.

During yesterday's debate, Opposition members repeated their charges about the poor handling of the INTEC fund and Samuda described NetServ as a scam from the start.

While acknowledging the weakness pointed out by Auditor-General Adrian Strachan in his report, Patterson stressed that he made "no complaint ... as to the appropriateness of the policy framework.

"(And) nowhere in the auditor-general's report is there any finding or allegation of corruption on the part of ministers or any public officials," the prime minister said.

Patterson argued that while statutory bodies and government agencies operate in accordance with policy directions given by ministers, the latter were not expected to supervise the day-to-day operation of an agency or department.

"There can be no suggestion that there was, in this case, a wrongful exercise of lawful authority by the minister or failure to exercise ministerial authority where that rested," Patterson noted in response to charges of misfeasance made last week by the Opposition Leader.