Where would Government get EC $32.3 million to buy back shares? – Eustace

The 31 per cent shares in the Bank of St Vincent and the Grenadines (BOSVG), which was bought back by the Government, will be resold in the future.

So said former Opposition Leader and parliamentary representative for East Kingstown Arnhim Eustace during a press conference on Wednesday.

“I want the public to understand; everybody saying ‘we get back the Bank,’ we ain’t get back no Bank! We entered into an arrangement where, later on, some other significant partner will buy shares in what we know as our bank, with a view to strengthening our bank operations, not only in terms of money, but in terms of their ability to manage … financial institutions…,” Eustace explained.

Last Friday, the Government of St Vincent and the Grenadines bought back 31 per cent of the shares in the BOSVG, which it had sold to the Eastern Caribbean Financial Holdings Limited (ECFH).

This purchase increased the Government’s total shareholding in the BOSVG from 12 per cent to 43 per cent and reduced the ECFH’s holding in the BOSVG from 51 per cent to 20 per cent.

Eustace, however, said he does not know how long the process will take to get to an amalgamated state or to even get a partner to repurchase the shares.

“So, in a sense, we almost ending up where we started.”

He also questioned where will the government get the EC $32.3 million, the agreed price for the buy-back, to repurchase the shares.

Eustace said about 18 per cent of the shares are owned by private citizens and many people’s lives and fortunes are involved and as such, the process needs to be taken seriously.

Leader of the Opposition Dr Godwin Friday said that he, Eustace and parliamentary representative for North Leeward Roland Matthews met with former director-general of finance Maurice Edwards, acting director-general of finance Edmond Jackson and consultant Andre Iton, who informed them about the repurchase of the shares by the Government.

“At the meeting, we wanted to know when the repurchase would be done, why it was being done, how much shareholding the Government would have in total, the role of the Central Bank in the transaction, the cost of the shares to be repurchased and how the Government intended to pay for the shares,” he said.

Friday said while the answers given shed more light on the deal, they did not satisfy all his concerns.

“It is in our people’s interest to have a stable and thriving national banking sector. This means having stable and thriving banks.”

He stated that several years ago, they were told that the sale of 51 per cent stake in the bank to ECFH would strengthen the bank.

“Today we are told that repurchasing the shares would also achieve that objective. We naturally hope that this will materialize in the quickest time to the benefit the shareholders, depositors and other users of the services of the bank,” Friday said.

In November 2010, the GOSVG sold 51 per cent of its shares in the wholly-owned State financial institution, then known as the National Commercial Bank to the St Lucia-based ECFH at a price of EC $42 million or $8.24 per share.(CM)