BASSETERRE, St. Kitts, June 20, 2010 (PAM Secretariat Press Release) - The sixth month of 2010 is now more than half completed but an important part of the annual financial calendar in the Federation is still yet to come to fruition. The Annual General Meeting of the St. Kitts, Nevis and Anguilla National Bank which should have been held since December 2009 is nearly six months overdue.
This is a very alarming situation in this time of severe economic and financial constraint. The national economy is experiencing significant difficulty and the last thing anyone would like to contemplate is trouble in our largest indigenous bank. The AGM is held annually in December to enable returning nationals to attend and dividends are paid but up till now there has not been any meeting and no explanation.
It is reported by sources close to the bank that the AGM has been postponed without a date set because the auditors have refused to sign off on the accounts that should be made available to shareholders at the AGM. Information is scarce about the precise objections being raised by the auditors and this lack of information is fueling ever wilder rumours.
Is our National Bank in trouble? Last December the government of Denzil Douglas paid a double salary to civil servants in a blatant attempt at electoral bribery knowing fully well that mere months later the Treasury would be strapped for cash. Just last week, on June 11th the cost of that ill advised expenditure was revealed. The Denzil Douglas regime will have to raise electricity rates, raise the social services levy and raise $497 million from commercial banks at undisclosed interest rates.
With speculation rife about the status of the National Bank its own payment policy in December 2009 is coming under intense scrutiny. For Christmas the employees of National Bank from Sir Edmund Lawrence himself right down to the lowest paid carried home the equivalent of three (3) months salary in bonuses and holiday payments. This amounted to a significant expenditure on the part of the bank while many shareholders are still waiting for their long overdue dividends. Could it be that the very same reckless spendthrift today, suffer tomorrow policy used by the government was employed by the bank in the prelude to a hotly contested General Election just over one month away? Only the full airing of the audited accounts of the National Bank at the AGM will provide any answers to this question.
However the situation with our National Bank has much farther reaching implications beyond the shores of St. Kitts and Nevis. In the aftermath of the fallout from the collapse of the financial enterprises of disgraced financier Allen Stanford, the Bank of Antigua suffered a classic bank run in the week beginning 16 February 2009. Four indigenous banks took over the Stanford owned Bank of Antigua in an attempt by the ECCB to ensure stability in the regional banking sector. Those banks were the St. Kitts, Nevis & Anguilla National Bank, the National Commercial Bank of St. Vincent, the Antigua Commercial bank and the National Bank of Dominica.
The National Commercial Bank of St. Vincent has already been reported to have lost a significant percentage of its share value recently. Our National Bank is the largest in the ECCU and any trouble with it would reverberate throughout the OECS. The indigenous banks were revealed in October 2009 to be suffering liquidity problems and are already vulnerable after taking on the liabilities of the damaged Bank of Antigua. There is no financial space for playing fast and loose with the largest indigenous bank in the OECS sub – region.
It is incumbent on both the manager of the bank Sir Edmund Lawrence and the Minister of Finance, Prime Minister Douglas, to immediately inform the public on the status of our National Bank. The shareholders are entitled to know the fate of their investments and the public of the Federation and the OECS region are entitled to be informed about the state of the backbone of the Eastern Caribbean Currency Union.
