9 months ago
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The Financial Gleaner understands that the wording of a set of loans totalling $1 billion and issued through the Jamaica Mortgage Bank, JMB, was at the centre of the separation of former Managing Director Anthony Shaw from the Development Bank of Jamaica.
Internally the bank has said there was no issue of impropriety.
The loan agreements involved different companies and were related to three real estate projects: one being a scheme in St Catherine, another in upper St Andrew, and the third in lower Saint Andrew.
Shaw was sent on leave in mid-August 2023 over what DBJ later said related to ‘corporate governance’ issues. But it came after JMB had requested a change in wording regarding the purpose of the loans, correspondence seen by the Financial Gleaner shows. After inter-departmental consultations, the change was determined to be minor and the funds were disbursed.
An internal audit was launched after Shaw was sent on leave, a review that extended to mid-November, according to sources. When questions were raised internally about the reason for the probe, an insertion in the DBJ’s newsletter said there were concerns about corporate governance.
There were no details regarding the conclusions arising out of the audit in material seen by the Financial Gleaner. However, a source said that Shaw was cleared of any wrongdoing.
“They found nothing after those two months-plus audits. They looked up, they looked down, and nothing,” another source said, pointing to a DBJ newsletter that quoted Acting Managing Director David Wan.
“I wish to dispel any possible misunderstanding that may have arisen, by advising that there is absolutely no indication of financial impropriety in the review currently under way,” Wan said in the newsletter as the audits unfolded.
Questions sent to DBJ Chairman Paul ‘PB’ Scott seeking comment on the outcome of the audit have received no response, despite indications that the messages were received.
Regarding the financing at the heart of the probe, they were all secured loans, the documents show.
“With the liens over those titles, the loan was therefore properly secured,” one source insisted.
Loan approval from the DBJ board was granted in late March 2023, according to correspondence seen. JMB’s request happened after the approval was granted, leading to a round of consultations with the eventual determination that the wording did not effectively change the purpose of the loan and on that basis the disbursement could proceed.
Scott was specifically asked about the loan and what if anything the set of transactions covering it had to do with Shaw’s end of year departure from of the state-run bank. Again, there was no response from the DBJ chairman.
News came in January that after less than two years, Shaw had parted ways with DBJ. The chartered accountant was appointed managing director on April 1, 2022 and demitted office on December 31, 2023.
Sources say Shaw walked away with $25 million to $27 million in severance pay. However, Shaw declined to comment saying he was bound by the confidentiality clause in the separation agreement.
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