The SSL fraud scandal is heating up again.

The Financial Services Commission is now reportedly taking steps to shut the company down completely. 

According to a report from the Sunday Gleaner, the FSC is now officially trying to wind up or liquidate SSL because the company doesn’t have enough money to pay back its debts.

Liquidation means that the company will be shut down and all its assets sold off to repay those debts.

Back in January when the scandal first broke, the FSC placed a temporary manager in charge of SSL and they also barred the investment firm from making any trades.

Now that the manager has been in place for a couple of months, he’s pretty much saying, ‘it’s as bad as we thought’.

Some quick definitions before we go into this next part. Assets are what the company owns and liabilities are what it owes. A balance sheet reports a company’s assets, liabilities, and shareholder equity.  You also have off-balance sheet items such as loans that are not recorded on a company’s balance sheet.

According to Gleaner’s article, up to January 31, SSL had assets of $1.1 billion dollars and liabilities of $1.2 billion. So already, the company owes more than it owns.

But! A source told the Gleaner that around 62% or $710 million of SSL’s assets are monies due from related party companies which are “uncollectable at this time”.

So SSL really only has $432 million in assets on their balance sheet. Meanwhile, their liabilities are stacking up. The company’s losses for the year so far are reportedly up to $184 million.  Plus they have around $29 million of negative equity, and loans totalling $623 million. Plus the company reportedly owes $40 million in taxes.

The Gleaner report also noted that the company has $29 billion off-balance sheet assets, which would almost cover the original investments of the 8,000 active SSL clients.  It would still be short $200 million. 

Essentially, any way you look at it the company doesn’t have enough money to crawl out of this debt. So the FSC is asking the Supreme Court for permission to shut the company down and sell everything they can.

It’s a sad but not completely unexpected update on this case.