Legal committee investigates collapse of brokerage firms |
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AMMAN - The Lower House Legal Committee on Monday continued its investigations into the collapse of hundreds of local brokerage firms last year.
To date, 310 cases have been filed at the State Security Court against these companies, Companies Comptroller Sabri Rawashdeh said at the meeting, which was also attended by Justice Minister Ayman Odeh, Industry and Trade Minister Amer Hadidi, Audit Bureau President Mustafa Barari and Central Bank of Jordan (CBJ)Central Bank of Jordan (CBJ)
Governor Umayya Touqan.
"Although 1,302 companies are registered with the department, none of them is registered for the purpose of trading in foreign currencies," Rawashdeh noted.
He added that only 93 of the complaints were filed against companies registered with the department.
Rawashdeh also stressed that the Companies Comptroller Department is only authorised to register companies and not to issue licences.
Meanwhile, Touqan told the panel that the CBJCBJ is responsible for registering financial corporations and money changers.
During the three-hour session, the head of committee, Deputy Mubarak Abu Yameen, said the absence of legislation regulating such companies was one of the main reasons behind this crisis.
A temporary law was issued last year as a result of the financial crisis which mostly hit small investors lured by brokers offering high returns on their investments.
The new legislation imposes stringent regulations on foreign exchange companies, requiring them to obtain a licence from the recently established Foreign Exchange Regulatory Commission.
Licence requirements include JD10 million in capital for privately owned firms and JD15 million for public firms, as well as a JD500,000 licence fee.
The companies in question were previously allowed to operate after registering with municipalities or commercial chambers as general or commercial services and were not subject to monitoring by the Central Bank of Jordan or the Amman Stock Exchange.
Authorities late last year seized assets worth around JD120 million, from the firms in question and referred 202 companies to the State Security Court prosecutor general.
Last November, the House decided to refer lawmakers' remarks regarding the crisis to the Legal Committee to study and identify those responsible for the crisis.
By Khetam Malkawi
© Jordan Times 2009
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