D.F.C. hearings look at collection procedures

It may have temporarily replaced the daytime novelas and soap operas usually aired by this station, but the public hearings by the D.F.C. Commission of Inquiry broadcast live every Tuesday and Thursday are not devoid of drama. News Five’s Janelle Chanona reports from the Belize Institute of Management.

Janelle Chanona, Reporting
Day two of the public hearings into the D.F.C. took on an air of heightened drama following a press release by the People?s United Party on Wednesday, calling for the head of Commission Chair David Price. But despite the accusations of a political witch-hunt swirling outside, inside the Belize Institute of Management, it was business as usual.

Eduardo Torres is the Loans Recovery Officer at the D.F.C., a post he assumed from the last witness, Henry Brown Sr. Throughout the course of his two-hour testimony, Torres chronicled a storied history of bad loans that left the D.F.C. strapped for cash.

Merlene Bailey Martinez, Member, Commission of Inquiry
?The Royal Palms could you go back to that list of loans the one you were reading just now of particular concern.?

Eduardo Torres, Loans Recovery Officer, D.F.C.
?The Royal Palm Limited.?

Merlene Bailey Martinez
?And that is James JanMohammed? You are not familiar ok. According to our notes here, go ahead and read it.?

Eduardo Torres
?The whole list??

Merlene Bailey Martinez
?Yes.?

Eduardo Torres
?The following accounts continue to be of primary concern: Khalid Nasser, Derrick Boyd, Ronaldo Pena and Western Development Limited.?

Merlene Bailey Martinez
?Thank you. Just wanted to make sure that we have that cleared what we are talking about, because we go further on to see that more loans were approved and I will ask you about that a little bit later on.?

David Price, Chair, Commission of Inquiry
?How do you account for the recurrence of those loans that you mentioned that read out just now, if this was applied across the board??

Eduardo Torres
?Like you mean in the sensitive loans??

David Price
?Yes.?

Eduardo Torres
?They don?t reach committee, so we don?t discuss it. If it doesn?t reach then they won?t discuss it.?

David Price
?Where along the pipeline? Do these sensitive loans get stuck??

Eduardo Torres
?I can?t answer that. I don?t know. You have to ask management. It is them, I don?t know.?

David Price
?We will ask not to belabour the point. Did anything go wrong at the D.F.C. during your tenure as loan recovery officer??

Eduardo Torres
?Did anything went wrong at the D.F.C.? Well one of the reasons you guys are here is because something definitely went wrong, right? But we just mentioned before inadequate security. I mean if you are in the banking industry and you want to lend somebody and all the collateral that you have is less than you borrow you are looking for trouble there. So I would say yes something went wrong.?

David Price
?Who would be responsible??

Eduardo Torres
?The clerical, the administration, the management, the board and ultimately the government. You know it trickles up and below here and we need to go up. So definitely there?s people to blame.?

David Price
?I?m not sure I understand your response. Are you saying that the blame ought to be across the board this way from the clerical people up to the board or that it trickles up??

Eduardo Torres
?I would say I don?t think you could blame pinpoint one person.?

The commission?s first apparent confrontation came when the D.F.C.?s assistant securitisation officer, Elizabeth Reid, took her turn at the mic. Part of Reid?s job was to replace non-performing loans with good loans in the North American Securitization process. That collection included thirty million to Novelo?s and millions more to the Glen Godfrey Group of Companies and Arnaldo ?Papi? Pena.

David Price
?If one of those loans became non-performing what do you do about it? It?s not as if you could find thirty million worth of mortgages to swap the Novelo?s is it??

Elizabeth Reid, D.F.C.?s Assistant Securitisation Officer
?Novelo?s loan has been removed and had been swapped with other loans.?

David Price
?Yes but that was subsequent to 2004.?

Elizabeth Reid
?Yes.?

David Price
?Prior to 2004, if any of these loans over one million dollars defaulted, how was that remedied.?

Elizabeth Reid
?We would take it out and if we had to put in fifty loans to replace it then that is what we do.?

David Price
?Assuming of course you have fifty loans that would add up to that value. If you don?t have fifty loans that add up to that value what do you do??

Elizabeth Reid
?We always could find loans.?

Merlene Bailey Martinez
?Let me give you a specific example here, and Mr. Ralph please take this to Ms. Reid it is a note to the C.E.O. and then you can tell me what transpired afterwards in this case. I need her to read this note into the record right here. And just confirm that it is your handwriting. It says Reid but I need you to confirm that that is your handwriting. Could you clearly read what your note said to the C.E.O.?

Elizabeth Reid
?Ok, C.E.O. we have not received any payment from Mr. Pena if account is not updated before July thirty-first, 2002 it will fall in arrears over ninety days and it will have to be removed and it is a very sizeable loan, for assistance in collecting arrears.?

Merlene Bailey Martinez
?what subsequently happened to that loan? Was it removed??

Elizabeth Reid
?Yes it was.?

David Price
?At that time, the Novelo?s loan was still close to thirty million if not exceeding thirty million, so it would have to be a considerable pool that would swap Novelo?s. Would you agree??

Elizabeth Reid
?Yes.?…

David Price
?But at this point in time, you don?t have any idea what those loans were??

Elizabeth Reid
?I remember it was like five hundred and so loans. But I can?t give you the details.?

David Price
?Five hundred or so what kind of loans if you can recall??

Elizabeth Reid
?Different kinds, but mostly housing.?

Merlene Bailey Martinez
?How was D.F.C. able to come up with the flow that was due from Novelo?s??

Elizabeth Reid
?We replaced it with a large number of loans.?

Merlene Bailey Martinez
?From Where??

Elizabeth Reid
?From the D.F.C. portfolio.?

Merlene Bailey Martinez
?Do you have any idea how those loans became available, that large number??

Elizabeth Reid
?I don?t know. I don?t have that information.?

Following an ?I don?t know? response to several questions, Reid got homework.

Merlene Bailey Martinez
?Are you making a note??

Elizabeth Reid
?I don?t have a pen.?
Merlene Bailey Martinez
?Would you like a pen??

Janelle Chanona
?Barring a legal injunction against the work of the Commission of Inquiry, Reid?s testimony this afternoon is no doubt the tip of iceberg as the members begin their queries of the D.F.C.?s involvement in the securitization process. Reporting for News Five, I am Janelle Chanona.?