By G.A. Dwyer Astaphan
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Some years ago I learned that a certain insurance group, through its offices here in St.Kitts & Nevis, was accepting certificates of deposits (CDs).
That struck me as odd, because as I know it, accepting certificates of deposit is the business of banks or other institutions appropriately licensed to do so.
In addition, I was worried because if this, or any other, insurance enterprise was allowed to accept CDs, then money received by it could, and very likely would, be taken out of our banking system.
This would reduce the amount of money available to our people for capital and consumer loans, and so on. As well, it could weaken and, if the rates of interest on offer were higher than those in our banks, even destabilize our banking and financial sector.
And that would be disastrous.
To increase what I thought to be a potential threat to our banking sector, the rate of interest on offer by the insurance group under the scheme was higher than that available from our commercial banks. So, to nobody’s surprise, the scheme gathered investors quite robustly.
Back when it first came to my attention, and I am speaking about maybe five or more years ago, I expressed concern in terms of the appropriateness of the scheme under the law, and in terms of its prudence and fairness with regard to our banking system, our consumers, and our economy.
But I was told by the big brains advising on financial, fiscal and legal matters, and also by the major decision makers who were being advised by the big brains, that my concern was unfounded.
Needless to say, I was not comfortable with their response, or the lack thereof.
How could an insurance company be allowed to operate like a bank in terms of accepting CDs? Was the law being broken? If not, were the regulations governing insurance enterprises sufficiently strict? Was the Government’s Director of Insurance on top of things? Was the Ministry of Finance on top of things? Were the financial statements of this insurance Group being properly assessed? In which part of the financial statements of the insurance group was the revenue generated from these CDs being listed? Was it under Revenue Income, or was it under Deposit Liabilities, or some other part?
Was the Eastern Caribbean Central Bank aware of the scheme, and what role was it playing in assuring proper vigilance of the insurance sector?
Let me say that I never took a formal course in economic, accounts or finance, but I did earn a ‘B.S.C.’ even before I left High School.
I earned it behind my father’s shop counter cashing, selling and weighing out corn, flour, pigs’ snouts, ears and tails, salt’ fish, mackerel, herring, salt’ beef, smoke’ herring, onions, salt’ pork, lard, red butter, rice, sugar, filling bottles of cooking ‘sweet’ oil, and so on.
Behind that shop counter that I learned vital lessons, coming from both sides of the counter, about common sense, about work, about business, about people, about poverty, about our society and our culture (most of my father’s customers were cane cutters and other working class people), and about life.
That is where I earned my ‘B.S.C.’…Behind Shop Counter.
And although I studied law in England, I lay no claim to be an expert in the law governing finance and insurance.
But I know some law, and I have enough (well, nearly enough) common sense and conviction to think, to ask questions, to challenge, and to hold on to my views although others might disagree with me, regardless of how many they are and how educated, smart, loud or boisterous they might be. Unless they are able to convince me that they are right and I am wrong, and I am very quick in yielding to better ideas and the right answers, I hold my ground.
That’s me.
And I am not beating my chest or anything like that, but look at what is happening today.
The same Group is in deep trouble, and thousands of people, both in our Federation and throughout the region, are scrambling and panicking.
I was told that, in both insurances and certificates of deposit, the people of the OECS are invested to over EC$900 million, of which St.Kitts & Nevis has put in EC$130 million(including $19 million of Social Security’s money).
I was also told that the Governments of Trinidad & Tobago and Barbados, which have a significant interest in the happenings, are concerned only with their own citizens, a position which I believe needs to be scrutinised, as those two nations may be discriminating and thereby breaching certain rules of CARICOM.
I know that there is no easy and quick solution to this problem, but I will here and now tell you what I have said to the Government of St.Kitts & Nevis: acquire all of the local assets of the Group in an effort to protect, as best as you can, the citizens of our Federation who are at risk.
From what I have been told, there is also the possibility that fraud may have been committed. And I call upon the Government to expeditiously investigate this, and if a prima facie case can be made, to prosecute without fear or favour, whether it be friend or foe, any executive person involved in any fraud perpetrated against any citizen or resident of this country.
If good citizens lose their money to fraudsters, the scamps must go to jail. Meanwhile, let’s not forget that people are innocent until proven guilty.
And while I am on the subject of acquisition and possible fraud, and protecting the people of this Federation, I also call on the Government to acquire the Stanford assets in St.Kitts. Let all receivers, liquidators, creditors, foreign government agencies, media, etc., deal with Government.
To our Minister of Finance, Dr. Timothy Harris, I say: persuade your esteemed colleagues to take out what you are owed, if anything, and take back the land, the building and everything else. Do not allow any tying up of things here.
And I think you hold a caveat from some time ago. Move up to acquisition.
Also, another call centre operator might be available to take over the premises near to the Airport almost immediately, with the potential of hiring up to 250 persons.
Acquire and rent to the new tenant, and in the interim seek an alternative location for said new tenant. At the same time, make plans to relocate all Ministries (except Communications, Works & Public Utilities) and a number of other Departments there (you are paying too much rent), and sell off the properties in the commercial downtown area. Let those locations generate more economic activity and create more jobs in the process.
Alternatively, relocate to Fort Thomas and put the lands near to R.L. Bradshaw Airport into productive hands.
Remember, Mr. Minister, I have a ‘B.S.C.’
Until Next Time, Plenty Peace.
