Luke Browne advises against withdrawing shares from Building and Loan  happening – Browne
January 29, 2013
Luke Browne advises against withdrawing shares from Building and Loan happening – Browne

Ministry of Finance employee Luke Browne says he still has shares at the St Vincent Building and Loan Association and that he would not encourage persons to withdraw their deposits.{{more}}

Browne’s comments came in the wake of his January 18 letter published in The Vincentian newspaper, expressing concern about the management and financial health of the institution.

And, yesterday, he defended that decision and told SEARCHLIGHT he had nothing personal against the leadership of Building and Loan, of which his father was a director about 10 years ago.

“What sort of personal thing can I have against the Association and its leadership?” Browne told SEARCHLIGHT.

“… I am a shareholder of Building and Loan. I have an association with Building and Loan in my own right since in 2002. I don’t want to see Building and Loan collapse in anyway at all. I know people are asking whether or not they should take their deposits from that institution. I sincerely advise them against it,” Browne said.

Browne said his letter had “two principled purposes”.

He wanted to get the institution “to issue some proper information related to some of the concerns that I raised”.

He further said his letter was published after he “tried to get some answers to what were legitimate queries and experienced some frustration in going about that process”.

He was also concerned about a recoveries company that Building and Loan had set up, he told SEARCHLIGHT.

That recoveries company, he said, is at the heart of “some of the governance problems that are there right now.

“So, I went about that in a responsible way. So, one of the outcomes that I sought was some more serious response to the issues, and you know Building and Loan gave a press statement on that.

“And I wanted the regulators to get involved a bit more closely in the work of the Association to make sure we have a strong financial system. To make sure we have learnt from the mistakes of the past…”

Browne said a Building and Loan press release last week addressed some of the issues he raised.

But he also questioned the institution waiting until his letter to address those issues “given the financial climate and recent experiences.

“Building and Loan should come to the table and say ‘Look, this is the situation. It shouldn’t take an article by me to get that done.’

“That is the point I really want to underscore. That is in the interest of public confidence. Boost our confidence; let us know what is happening with the institution. That is what I want.”

Browne also spoke of a Financial Services Authority (FSA) investigation of Building and Loan.

“I think you can get that information from FSA. I am really not in a position to make any comments, especially comments on the record about that,” he told SEARCHLIGHT.

An FSA employee told SEARCHLIGHT separately yesterday they were “not at liberty to say” if the FSA was investigating Building and Loan.

Luke also defended his letter in light of his status as an economist at the Ministry of Finance.

“My job really is to look at matters concerning pension reform … There is nothing that was said in the article that relied on any sort of inside information — you might say — as people who make those comments would suggest.

“We look at information that is in the public domain. I think the IMF Article IV consultation report put it plain and straightforward,” he said of the document he mentioned in his letter.

Browne said “there was a legitimate concern” about Building and Loan.

“There are people who are financially literate; … people who are accountants, people who are auditors and the like. These are people that would look at the financial statements of an organisation and be able to make decisions about their money.

“Why can’t we give working class people, so to speak, an opportunity to look at information objectively and to make a decision?”

He, however, said he has no evidence that his letter had resulted in a run on the institution.

“But all I would like to say is that those are not my intentions. I would discourage any destabilising activity in that respect. I think now that the regulators are involved, it is a much safer situation for Vincentians and we should just keep looking out for each other and taking actions, bold as they might be, courageous as they might be, to really make sure that we are contributing to sustainable development.”

Asked if the Government or its agencies had expressed concerns about potential negative impact of his letter, Browne said:

“There have been no concerns expressed in relation to that.”

He added: “Like I said, there is always guidance, not within the realm of government necessarily, but within the realm of our society that perhaps things said a little more mildly…

“But, all in all, we have a responsibility to make sure that things work in a sustainable way and this was my small contribution to see things move in that direction, given recent developments…”

Asked if the situations he spoke about existed when his father was a director of Building and Loan, Browne said: “That’s a different age…”

He added that his letter was about “current issues”, namely the lack of an annual general meeting in 2012 and the absence of audited reports.

“Those are current issues. So, it would be really unfortunate, even unfair, to suggest that those things could be tied to the leadership of the association 10 years ago,” Browne told SEARCHLIGHT. (