CASH PLUS SOS – Company seeks approval to appoint temporary manager

CASH PLUS SOS – Company seeks approval to appoint temporary manager; to commence payments to creditors on April 14
published: Sunday | March 30, 2008

Hill

An application filed by a manager of the Carlos Hill-led Cash Plus Ltd in the Supreme Court seeking approval to appoint a temporary manager to supervise the process of disbursement of funds to lenders, is to be heard tomorrow.

The lawyer representing the manager, Minette Palmer, says an application was filed late Friday seeking the court’s approval under Section 213A of the Companies Act (2004).

Under this section of the act, a complainant can make an appli-cation for remedy if he thinks the company or any of its affiliates are oppressive or prejudicial to a share-holder, debenture holder, creditor, director or any officer of the company.

Unable to meet deadline

The application follows an announcement by the Financial Services Commission (FSC) that Cash Plus would not be able to meet its March 31 deadline to commence repayment to its lenders.

The company had announced last month that it would commence repayments on March 31.

However, in a paid statement in today’s Gleaner, the company states that it was unable to meet its deadline because of the lack of banking facilities available to it.

It claims that the court has already given approval for the appointment of a temporary manager and says it will commence disbursements to its lenders on April 14.

Delaying the inevitable

Former secretary of the Jamaica Bankers‘ Association and attorney-at-law, Shirley-Ann Eaton, says the action taken by Cash Plus is not a good sign and certainly raises the question of whether the company is going into receivership.

“When you appoint the receiver manager, he is gathering all the assets and liabilities and, therefore, is not going to pay out anything (to creditors) until he is satisfied about the company’s affairs. It’s a way of delaying the inevitable,” she opines.

That, she therefore notes, raises more questions about the company’s setting of a definite date – April 14 – to commence repayments.

“Because the next step [usually] is winding up,” she says.

Cease-and-desist order

A cease-and-desist order, which remains in effect, was issued by the FSC in December against Cash Plus until it is licensed to deal securities or has its investment products registered.

The order bars Cash Plus from conducting securities business with members of the public, which includes registering new lenders and accepting new funds, as well as making payments to its lenders.

But in a statement earlier this year, the FSC said it was willing to vary the order allowing Cash Plus to pay all outstanding balances if the investment scheme made a request to the commission.

So far, Cash Plus has not applied to the FSC to be registered. This is so, even though it brought an application before the Supreme Court in January last year seeking declarations as to whether the nature of its business required it to be registered under the Securities Act.

In January this year, it withdrew the suit and said it was willing to be registered with the FSC.

CASH PLUS TIMELINE

2002: Cash Plus Ltd, led by Carlos Hill, started operations in Jamaica.

May 2007: Purchased the Hilton Kingston hotel.

July 2007: Acquired Drax Hall Estates, St Ann.

September 2007: Became sponsors of the national premier league football.

December 2007:MegaFone, a subsidiary, collapsed after Oceanic Digital’s Network, popularly known as MiPhone, pulled its plug on the company in a dispute over payments.

The Financial Services Commission (FSC) issued cease-and-desist orders on Cash Plus, its CEO, Carlos Hill, and Kahlil Harris.

January 2008:Cash Plus discontinued its suit against the FSC and assured the court that it was prepared to be regulated by the FSC.

February 2008: Announced plans to resume payments of monthly returns by March 31, but indicated that this was contingent on FSC approval.

Cash Plus has not provided information to vary Cease and Desist Order, FSC says

Cash Plus has not provided information to vary Cease and Desist Order, FSC says

Saturday, March 29, 2008

THE Financial Services Commission (FSC) is advising the public that to date Cash Plus Ltd has not provided the FSC with the information that would allow for a variation of the Cease and Desist Order served on the alternative investment scheme.

Cash Plus had informed the FSC of its intention to pay to its investors all outstanding principal and interest (Total Indebtedness), with a view to closing the investors’ accounts.
In response, the FSC wrote to Cash Plus and informed them of the FSC’s willingness to vary the Cease and Desist Order to allow them to make payments to its investors.

The FSC also indicated in writing to Cash Plus, that it would grant the variation of the Cease and Desist Order after it provides the FSC with the following basic information:

(a) The total number of investors and the aggregate of the balances due to all investors;

(b) The methodology by which CPL will facilitate the settlement of the Total Indebtedness due to the investors and the closing of all investor accounts so that all investors are treated fairly; and

(c) The source of funds for the making of payments to the investors.

The FSC says that it has not received any of the above information from Cash Plus. Consequently, the Cease and Desist Order served on Cash Plus remains in full effect.
The FSC says it will continue to keep the public advised of any developments in this matter.

No March payout – Cash Plus can’t meet obligations

No March payout – Cash Plus can’t meet obligations
published: Saturday | March 29, 2008

Barbara Gayle, Staff Reporter

The cash-strapped investment club, Cash Plus Ltd will not be able to pay its investors the principal and interest owing to them on March 31 as it had previously announced.

A statement issued yesterday by the Financial Services Commission (FSC) said it had urged Cash Plus to issue a pubic notice advising investors of its position.

The FSC disclosed that it was informed by the attorney-at-law acting on behalf of Cash Plus late yesterday afternoon that “Cash Plus Limited does not currently have the funds to commence the repayment of the principal and interest owing to their investors on March 31, 2008, as they had previously indicated”. The FSC has promised to keep the public informed as the matter progresses.

Cash Plus went to the Supreme Court late yesterday with an application under the Companies Act for the court to appoint a manager to assist Cash Plus in administering its affairs. The company’s lawyer, Minette Palmer, said Cash Plus hoped to make payouts by April 14 .

more than $4 billion

At the end of February, Cash Plus had declared in a public advertisement plans to resume payments of monthly returns by March 31, but noted that it was contingent on FSC approval. It has more than 40,000 investors with loans totalling more than $4 billion.

In a statement issued earlier this month, the FSC said it was not trying to hinder Cash Plus from making payouts to investors. The FSC said it had always indicated its willingness to allow Cash Plus to make payouts to its investors once it approached the FSC for such permission.

A cease-and-desist court order issued in December remains in effect against Cash Plus until it is licensed to deal securities or have its investment products registered.

The order bars Cash Plus from conducting securities business with members of the public, which includes the taking of new funds and making payments to its investors.

The FSC had said in a public notice earlier this year that it was willing to vary the order, allowing Cash Plus to pay all outstanding balances.

Cash Plus had brought an application in the Supreme Court in January last year seeking declarations as to whether the nature of its business required it to be registered under the Securities Act. In January this year, it withdrew the suit and said it was willing to be be registered with the FSC.

So far, Cash Plus has not applied to the FSC to be registered.

barbara.gayle@gleanerjm.com

Letters – Who killed Cash Plus?

Letters – Who killed Cash Plus?
published: Thursday | March 20, 2008

THE EDITOR, Sir:

I, like so many other Jamaicans, continue to be concerned that there appears to be no early resolution to the crisis facing investors in Cash Plus.

With the Financial Services Commission (FSC) having exercised its regulatory authority – despite earlier boasting by the Cash Plus boss that they could not be closed down – one would have thought that every effort would have been made to ‘straighten up and fly right’.

It is being reported that the FSC is still awaiting necessary documentation from Cash Plus, in order to process its application for a licence.

In the meantime, there is no meaningful word from Cash Plus to its investors as to when they will receive their money.

The March 31 date was just a promise, with no real intent. One is therefore left to conclude that there is no urgency on the part of Cash Plus, while their investors languish.

The average Jamaican is blessed with an abundance of patience, but which, if pushed to the limit, becomes explosive beyond measure.

I would caution the Cash Plus management to immediately seek to conform to the regulations, while at the same time, keep their investors advised of their progress.

To do any less, will only confirm my suspicion that the management of Cash Plus, is less than honourable.

I am, etc.,

Less Cash

Kingston 8