Goodyear Shareholders could get another 70 cents from the liquidation of the company according to information gleaned by IC insider. Shareholders in Good Year Jamaica expected the liquidation of the company to have been completed long ago. The liquidators made two payments and then there was dead silence since, with no one indicating what was happening.
The liquidators sold off inventories and fixed assets but Income Tax refund of $17 million and General Consumption Tax (GCT) refund $9 million was outstanding up to 2008 with recovery having been protracted and unlikely to be fully collected due the absence of withholding tax certificates on interest income. Of $21 million claimed for withholding tax between 2000 and 2008 only $14 million is accounted for leaving $6.9 million primarily for 2003 and 2006 to 2008. Seems strange that the staff of the company have left shareholders to suck up such losses and they will end up getting all the surplus on the pension fund.
Refunds totaling $12 million up to and including 2012 were agreed with the tax authorities and the amount for GCT seems to be collectible and should amount to $16 including interest.
The liquidators indicate that they accepted the liquidation for a fixed fee of $1.5 million on the basis that the company was solvent and the winding up process would be resolved within a reasonable time. They are now requesting $18.7 million which is well above the original figure and collected $4.3 million to 2014. But looking at the details it is noted that sitting in a bank current account is $5.7 million in 2013 and $5.4 million in 2014. At the start of 2013 the current account balance was $6.8 million. The big question is why were the funds left in the current account and not placed on an interest earning account to generate interest income? It is difficult to see how the liquidators want more funds when they have fowled here and one wonders how much interest income has been lost due to poor handling of the funds.
Assuming no more funds are collected than those agreed to, the amount that is available should be in excess of $55 million before the liquidator’s fees are finalized.
70c for Goodyear Ja shareholders?
December 7, 2015 by
Poor Carib capital market regulation
The glaring case of the abuse of power exercised by the Trinidad Cement board in the handling of the company’s right issue earlier this year, stands out as a clear case for regulatory action to protect investors. In this matter the company failed to properly inform shareholders of a strong improvement in the profit of the a for the first quarter and made it worse with Price Waterhouse Coopers signing a report that gave the impression that there was no profit for the quarter.
In Jamaica, we have a Financial Services Commission (FSC) that is said to be the regulator for the financial entities not regulated by Bank of Jamaica, much is lacking from them, their inaction in matters of critical import makes one wonder what taxpayers money given to them is really being used for?
When it comes to the FSC, one is reminded of a police station located across from a house of crime but does nothing, unless the neighbours complain about it. Here is a case be it small. One of the FSC regulated entities is late with its 2015 results, the company issued a statement to the stock exchange to say they would be late in releasing the audited statements and the audited figures would be released on December 4. They also had the lateness of the audited accounts in 2014, with December 5th being the promised date. Now the public is being told that Barita Investments Limited (BIL) the entity involved has advised that the Audited Financial Statements for the financial year-end 2014/2015 will be submitted to the Jamaica Stock Exchange (JSE)on or before December 29, 2015. That is a major shift in the time frame. No reason was given in the notice on the stock exchange site. The investing public has a right to know the reason for the lateness. The FSC that regulates the market, should be interested in knowing what the reasons are as well, but there is not even a peep out of them?
IC Insider spoke with Mrs Rita Humphries, Chairman of the company on Wednesday December 9, about the issues affecting the release and subsequently, the last posting was made on the JSE website. According to the Chairman, there were issues relating to reconciliation of a few accounts which required adjusting entries to be made. Barita had them reconciled and the auditors needed to go through the information and transactions to satisfy themselves that the end result is correct. Additionally, the auditors advised of none receipt of confirmation from clients some of which had already been sent on to the auditors we are advised. Last year the audit was held up by a difference of opinion between the auditors and the Barita over the issue of fully providing for the value of shares Barita held in Scotia Group on the basis the auditors said was the impairment of the investment. This was after they fully provided for the value of Barita’s investment in National Commercial Bank shares.
All this bring one back to the glaring errors in the audited accounts for Knutsford Express audited accounts for 2014 and 2015 for which there have been no request for revision of the reports, why? Are these regulators really serious in protecting investors? Take the most recent case of tTech. The prospectus for the company’s shares, made no mention of subscribers being asked to pay the JCSD fees. One day before the issue opens, a note is placed on the JSE website that the fee is to be paid by subscribers, even as the prospectus states that investors would not be paying any more than the $2.50, the shares were offered to the general public at. The JSE clearly did not intervene to prevent a chaotic situation from happening with some applicant including the fee and others did not as they were unaware of it. Thankfully, the management and brokers were sensitive to the issue and agreed to refund those who paid.
The FSC and the Stock Exchange police the system when companies are going to the public to raise money, but what happens after, very little? Goodyear was delisted from the JSE, shareholders got two payments form liquidation of the assets but about three years after, no information but there are no regulators dealing with the issue anymore, leaving many small investors to fend for themselves. That is not good enough.