ST. JOHN’S, Antigua – FOLLOWING a February 22 announcement that a number of the region’s indigenous banks had been identified to stabilize Bank of Antigua (BoA), the Eastern Caribbean Central Bank has created a new entity to take control of the vulnerable financial institution.
After BoA Chairman Allen Stanford had been charged for fraud by the US Securities and Exchange Commission (SEC) on February 17, the bank witnessed large-scale withdrawals of cash which caused a drain on the Bank’s liquid deposits.
The ECCB and the Government of Antigua-Barbuda subsequently met to discuss an immediate action plan to safeguard the interests of depositors and business partners of the bank and by extension protect the island’s financial sector.
During a February 23 press conference held at the BoA, Minister of Finance and the Economy Hon. Dr. Errol Cort explained that despite the ongoing issues in respect of the US SEC, the institution will continue to “function normally and engage with its customers in a manner to which they are accustomed”.
He informed that Eastern Caribbean Amalgamated Investment Company (ECAIC) is a combination of indigenous banks within the ECCU together with the Government of Antigua-Barbuda and the East Caribbean Financial Holding Company Limited.
“The formation of this new corporation was the outcome of long and in-depth consultations among the stakeholders over the weekend and is indeed testament to the ingenuity and creativity of our people. The delegation representing Antigua-Barbuda during these consultations secured a 40% interest in the new –fifteen percent of which is allocated to the ACB and the remaining 25% allocated to the Government of Antigua-Barbuda.
“Given the urgency with which action was required, we were not in a position to afford members of the Antigua-Barbuda public the opportunity to acquire a share in this new entity.
However, this Government is determined to give the public a chance to own a stake,” Dr. Cort indicated.
In clarifying the plan of action, Governor of ECCB Sir. K. Dwight Venner outlined the elements embodied in the Memorandum of Understanding geared toward transitioning the Bank.
He said an oversight committee consisting of himself; two members of the Board of Directors of ECCB from Antigua and Barbuda and St. Vincent and the Grenadines; and two members from each representing the Board of Directors of and the Management of five participating indigenous banks would “monitor the operations of bringing the Bank of Antigua back to full normality”. He indicated that another function would be to arrange the purchase of the institution by a newly created company.
“The ECAIC [will] carry on the operations of the Bank while a number of legal and financial activities are being carried out in preparation for the final sale to a new entity as required by Article 5B(1)(vi). Also, the Eastern Caribbean Amalgamated Bank would be created and will purchase the restructuring entity,” Venner noted.
The firm PricewaterhouseCoopers has been engaged by the Central Bank to carry out a valuation of the Bank of Antigua and technical personnel from the Central Bank and the indigenous banks have been working around the clock to complete this exercise as soon as possible.
Antigua News