Cash Plus concedes

Cash Plus concedes Alternative investment scheme now wants to register with FSC

PAUL HENRY, Observer staff reporter henryp@jamaicaobserver.com Thursday, January 24, 2008

EMBATTLED alternative investment player Cash Plus Limited yesterday ended its running legal battle with the Financial Services Commission (FSC) and announced it would seek to register with the regulatory body.

The announcement came at the expected start of the highly anticipated case brought by Cash Plus, seeking a declaration in the Supreme Court that its operations did not amount to securities trading, which would require it to be regulated by the state-run FSC.

The about-turn by Cash Plus’ legal team appeared to take the court by surprise but the company said it had drawn comfort from the pending legislative changes the government has ordered, presumably to make room for non-traditional financial entities.

“.Though the particulars and requirements (of the legislation to come) are not yet known . we are committed to embark on the process (of being registered) in the coming week,” said Bert Samuels of the law firm Knight Junior and Samuels, representing Cash Plus.

Presiding judge, Justice Patrick Brooks immediately removed the stay of a cease and desist order he had earlier granted the investment player, clearing the way for the company to effectively cease all trading operations until it is licensed.
Cash Plus was served with the cease and desist order by the FSC on December 29, 2007 after the regulatory agency won an earlier round in the legal tussle that has been nervously watched by hundreds of Jamaicans who invested money in the club for interest gains upwards of 10 per cent per month.

But Samuels’ eleventh hour announcement of the Cash Plus change of heart, did not sit well with Acting Solicitor General Patrick Foster who said he was not prepared to endorse an adjournment of the matter, unless the court made a declaration as to whether Cash Plus was dealing in securities.

This way, it could be determined if the entity should be registered under the Securities Act, the Unit Trust Act, the Pensions Act or the Insurance Act.

Foster also impressed upon the court that as a condition for an adjournment, Cash Plus had to agree to subject itself to FSC jurisdiction.

Samuels shot back that the reason for withdrawing the court action was that Cash Plus had accepted that the FSC had jurisdiction over the entity, insisting: “It was Cash Plus who sought to become registered.”

Pressed for a comment after court, Cash Plus principal, Carlos Hill said that he would be communicating with the company’s “loyal members” through newspaper advertisement by the weekend.

But is known that he had earlier urged investors to agree to allow Cash Plus to roll over their money for three months while the company transformed itself to a conglomerate that would offer them preferential shares.

Cash Plus is again due in court this morning in a matter with the National Commercial Bank, which is seeking to close the investment player’s remaining nine accounts with the bank.

A court ruling last week cleared the way for NCB to close 17 of Cash Plus’ accounts under the Cash Plus Group name.