SVBLA denies EC$6m withdrawal by Government

The Board of Directors and management of the St Vincent Building and Loan Association (SVBLA) have emphatically denied that the Government withdrew EC$6 million from the financial institution; instead, they say, the money was a lump sum debt relief payment.

This was explained in a press release issued by the financial institution yesterday, October 12 (see page 14 for full release), following {{more}}accusations made by the Opposition Leader Arnhim Eustace at a New Democratic Party (NDP) meeting held in Rockies last Friday.

Describing the allegations as “misleading”, the press release (which was signed by SVBLA president Jeremy Jackson), stated: “…the statement made at a recent public event raising question that the Government has taken $6 million from St Vincent Building and Loan is unfounded and untrue…

“In the past, Boards of Directors and Management did not honour their statutory obligation by making Interest Levy payments to the Government since its introduction. This resulted in the Association being indebted to the government for over $17 million due for interest levy, and interest and fines on same as at September 30th 2015…

“In September 2015, representatives of the Board met with the Honourable Prime Minister and the Director General of Finance, Mr Maurice Edwards to appraise them of the position of the Association, and to seek relief from the debt. It was at this meeting that an agreement was reached that if the St. Vincent Building & Loan Association paid a lump sum of EC$6 million, that the Government would waive approximately EC$3 million of the total outstanding interest levy, and all interest and fines accrued of the EC$8 million, bring the total relief granted to approximately EC$11 million.”

At a rally of the NDP last Friday, Eustace called on the Prime Minister to respond to allegations that the Government had withdrawn the sum of money from the institution when, according to him (Eustace), members have not been able to access their savings as they please since the financial fiasco that beset the SVBLA in 2012.

“So, on the one hand you telling the person who has money there ‘you can’t get your money now’, but the Government could take out this money? That is horrible! I am asking Prime Minister Gonsalves, now you tell me that is not true…” lamented Eustace.

Eustace also questioned whether members of the institution will have to wait longer to withdraw their savings now that this $6 million transaction has gone through.

“I know a lady who went for some money to bury her mother. They tell her no she can’t get it, they will pay the funeral home. That is happening, you know!”

However, the statement from the SVBLA emphasised that members are not being denied access to their funds.

“The fact is that during the period of the FSA’s intervention, withdrawal of deposits was put on hold. However, all requests for withdrawals were evaluated, resulting in some requests being approved for medical and other emergencies,” it stated.

“…To date, in all matured bands, some members withdrew their money while others opted to reinvest. We wish to state categorically that no member has ever been refused access to their funds that matured under the recapitalization plan, except in cases where those funds have been pledged as security.”

At a Unity Labour Party (ULP) meeting last Saturday at Sion Hill, Prime Minister Dr Ralph Gonsalves also denied that the Government had withdrawn the money from the SVBLA.

“Now I never hear anything so foolish – I could take Building and Loan money? Building and Loan owes the Government in arrears of interest levy payments, plus penalties and interest upon that… We gave them relief and tell them we will wipe off all the debt; just only pay a $6 million so that you can clean up your balance sheet,” said the Prime Minister, as he addressed the crowd. “By doing so, we have strengthened Building and Loan’s equity position for them to go forward.”

Gonsalves also said that under the law, he has the authority to take to Cabinet a proposal to waive such payments. He also said that his concern right now is that other banks will approach him to be granted similar waivers.

“I had to tell the other banks ‘listen to me, Building and Loan went through a difficult period.’ But now, Building and Loan made, over the last two years, $3 million and $6 million in operational profit.”

Gonsalves dismissed Eustace’s claims as “nonsense”, insisting that the Government’s intervention through the Financial Services Authority is what saved the SVBLA after it was teetering on edge of financial ruin.

“We took them out of the hole through Financial Services Authority, after Eustace’s friends – Eustace have a lot of friends who was involved in the Building and Loan, you know – after they run it down to the dogs!”

He added: “Something gone wrong in Eustace brain. I tell you, the man slowing down! The man don’t understand the simplest things.”

At the NDP meeting at Rockies, Eustace implored Vincentians to “be aware” of matters such as these, and not be fooled by the “sweet talk” from the Prime Minister and other members of the ULP.

“When it come to managing the money belonging to the people of St. Vincent and the Grenadines, they don’t know what they doing, and very often they do stupidness that makes life worse for the average citizen.” (JSV)