The Commission of Inquiry into the Development Finance Corporation is postponed until next week with in-camera hearings being held in the interim. And while the commission digs into the books and the deals that went bad, government's money managers are looking at ways in which they can minimize the impact that the DFC will have on the economy. That means that the DFC is being liquidated. Contrary to advice government had received from the international financial communities government is going about the process in an orderly fashion. CEO in the Ministry of National Development explains.
Hugh O'Brien,
"The present asset base of the DFC is around a hundred and eighty million dollars so it is a significant reduction in the size of the corporation and the staffing component of the institution was around a hundred and twelve, that is now down to just a little bit over sixty and by June or so next year that figure should be down to about forty five and this has been a very silent process. The DFC has been actively pursuing the collection of loans, it has been revaluing its assets and selling off assets that have more realistic market value.
It did not go along the path recommended or insisted upon by our partners in the international financial community where they wanted the DFC to go a full fledged one process negotiation; contract a liquidator and just sell off assets. People would have bid as low as twenty five or thirty cents on the dollar as what was already happening and in many of those cases, it would mean that government would have had to pick up whatever shortfalls that was not collected from the DFC liquidation process. The second problem it would cause for us is that the value of real estate would have plummeted, reduced significantly, and the real estate market would have been put into disarray with DFC putting all that portfolio on the market all at once. And the third problem is that you would have had a situation where you have a corporation with a hundred and ten plus staff and you essentially have to in a period of three to six months had to want to get rid of all of them at the liquidation process. That obviously has serious social and human considerations."
At it's largest the DFC had as much as $600 million in its portfolio. That has since been shrunk to about $180 million and the liquidation process continues with staff being reduced from about 60 to about 45. The longer plan for the DFC is to turn it into a private sector controlled institution insulated from government control.
