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Opposition Leader among those alarmed by PM’s disclosure

NDP president and Leader of the Opposition, Arnhim Eustace, right, and Central Kingstown representative, St. Clair Leacock, an NDP vice president, met with the FSA on Thursday. They are pictured here at a press conference in Kingstown on Monday, Feb. 11.

NDP president and Leader of the Opposition, Arnhim Eustace, right, and Central Kingstown representative, St. Clair Leacock, an NDP vice president, met with the FSA on Thursday. They are pictured here at a press conference in Kingstown on Monday, Feb. 11.

KINGSTOWN, St. Vincent, Feb. 13, IWN – Many Vincentians were alarmed by the details Prime Minister Dr Ralph Gonsalves revealed Tuesday about the Building & Loan Association, and Opposition Leader Arnhim Eustace was among them.

“Some of the figures he gave this morning alarmed me. It is the first time I heard them; first time ever. Especially for the non-performing loans,” Eustace said on Tuesday as he responded on radio to Gonsalves’ accusation that the opposition was politicising the situation.

Eustace said the Financial Services Authority was reticent during a meeting on Thursday with Eustace and opposition legislator St. Clair Leacock of the New Democratic Party.

“Mr. Leacock and myself were never told anything with respect to the portfolio of Building & Loan. We only learnt from the general press releases that there are difficulties with the portfolio. What they gave us in terms of documentation were the press releases that they had already issued, … one of which was issued that same day,” Eustace said.

Eustace also said he did not know there was no non-accrual of interest at the BLA. That is, that BLA was putting on its books interest it had not actually received.

“We were not informed about anything in respect to the portfolio of Building & Loan. … We were never told anything about delinquency rate, we were never told anything about non-accrual policy for interest and so on; nothing like that.

“They (the FSA) gave us some broad information. Because they were reluctant, really, to give detailed information,” Eustace said.

“So, for the Prime Minister to give the impression that we have made this statement knowing fully well what is happening, is a lie. … I am saying if Miss [Sharda] Bollers (Executive Director of the FSA) them had them in their notes which they gave to him — because I suspect that he sent them anyway — then, they too would have lied,” Eustace said.

Gonsalves on Tuesday read from a report his Ministry of Finance prepared on the BLA in 2009, although the report writers strictly urged against making its content public.

“He gave more information today that most shareholders of Building & Loan don’t have, don’t know about,” Eustace said.

“I am certain about that. I was never told about any run on Building & Loan in 2009. That wasn’t discussed with us. I don’t know what the current state of the withdrawals are. … We are all concerned about the situation because it is an important financial institution in our country…”

Eustace said the issue the nation faces has to do with the BLA’s role in the economy and the impact of any failure on BLA’s 20,000 members.

“… I just want to make that statement very clear … because he is giving this impression in his presentations that we had all this information.”

Eustace further said that he and Leacock were not briefed on a memorandum of understanding between the Ministry of Finance and the BLA but read about it in an FSA press release.

“In circumstances like these, who would expect people to have confidence in a government — in the government? How, in this kind of situation?

“Sometimes, it is very difficult in the circumstances but I am very, very clear in my head. I’ll be watching the performance of the FSA and also the performance of the public in relation to this matter,” Eustace said.

The FSA took over management and control of the BLA on Feb. 1 after a letter in a newspaper triggered a run on the 72-year-old institution, the second run since 2009.

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Discussion

6 thoughts on “Opposition Leader among those alarmed by PM’s disclosure

  1. Easy now Eustace, easy now, don’t be too hard on the PM “Eustace said the issue the nation faces has to do with the BLA’s role in the economy and the impact of any failure on BLA’s 20,000 members”.
    Remember Gonsalves wrote a cheque for $21,000 to BLA, that ensures that all the investors get at least a dollar each.

    Posted by Peter | February 13, 2013, 07:51
  2. It is the lack of forthrightness and the abundance of offhandedness in respect of The People that saddens me. So much energy was spent to get to this point. In all of the actions of the FSA and Its principals, be they good, bad or indifferent professionals, it is not easy to believe that the interests of the majority of smaller holders were paramount in their deliberations. When one cannot believe, one accepts.

    Given all of the contingent banking arrangements made for the Association by the PM just prior to the FSA intervention into B&L, the only place we can go is forward and up.

    Posted by Jeannine James | February 13, 2013, 17:05
  3. JEANNINE, I think your quite right, the small investor’s were never a consideration.

    I do not think that the government caused the present situation, that was management failure. But there has been a failure of the governments legal and fiduciary control over Building and Loan, just as they failed British American and CLICO.

    Gonsalves as minister of finance has failed in his duty to the people, anyone with an ounce of decency would resign.

    Its not what they have done, its the way they did it that has people thinking there was something conspiratorial about it.

    There is a cloud of darkness and doubt over the whole thing from 2009 to PM Gonsalves mothers cash withdrawal, to Luke Brownes letter, to the FSA take over.

    Posted by Peter | February 13, 2013, 21:14
    • True. No one can blame either the Government or the FSA for what apparently has been going on at B&L.
      And indeed, the Board and Management of B&L are what I would call ‘first responders’. They should be sufficiently endowed and should have equipped themselves to ‘take care of business’.

      But with all of this reliable intelligence available to only a few since roughly 2009, what steps were taken by whom? Who cared? One does not need to be a soothsayer to anticipate that this prevailing situation would get worse rather than better. I would expect that it would take some time to transition and transfer responsibility to an Authority (in this case, the FSA) but it seems that Nero continued to fiddle sweetly and merrily as Rome smouldered. Just like the FSA was incubated within the MOF, so was the regulatory authority over Building and Loan. That’s my take.

      Posted by Jeannine James | February 14, 2013, 10:03
  4. Like singing in the cemetery dark, Sis Jeannine ?

    Posted by STEVE__HUGGINS | February 13, 2013, 23:48

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