FINSAC Sold Prime Assets That Were 'Severely Under-Priced' Based on 'Appraisal' from Unqualified Valuator -- Confidential Report

Michael B. McNaughton. He has denied carrying out a valuation of properties in FINSAC’s portfolio but rather said he provided an “opinion” on their value for which he was paid and said he wasn’t engaged or paid by FINSAC. Photo credit: Jamaica Stock Exchange.

SUBSCRIBER CONTENT

Before Hurricane Melissa ravaged western Jamaica last year, the only other post-Independence event to have wiped out two-fifths of Jamaica’s GDP was the meltdown of the financial sector in the 1990s.

The PJ Patterson-led government of the day set up the Financial Sector Adjustment Company (FINSAC) to bail out some financial institutions and take over others, saddling it with bad loans and some of the underlying real estate assets.

The intervention by FINSAC caused the government to bleed billions of Jamaican dollars, making it desperate for cash.

Now a confidential report that has not been previously reported publicly is showing how that desperation coupled with FINSAC having “engaged the services of an unqualified valuator, Michael McNaughton,” led to the disposal of valuable assets that were “severely under-priced,” lowering returns to the state-owned company.