Hans King responds to Dr. Adrian Fraser

Fri, Oct 15, 2010

Editor: I am going to dare and be out of my place once again by addressing issues in the newspaper column of our noted historian Dr. Adrian Fraser. I usually glance over the good Doctor’s column, but every now and again I actually take the time to read it, as I did last Friday October 8, 2010. I chuckled while reading the column in its entirety, as I did while reading that of Anesia Baptitste in The News newspaper of the same date.{{more}}

Dr. Fraser, in making reference to the debate on the sale of 51% of the shares of the National Commercial Bank (SVG) Ltd., says “(t)here is a lot about the debate that is sickening and almost makes you want to puke.” In this regard, I’m totally in agreement with Dr. Fraser, though I doubt the debate which I find sickening is likely to be that which makes Dr. Fraser want to puke.

Dr. Fraser raises several questions in the column which I’m going to be ‘out of place’ and try to address. He writes: “the other cause for concern, perhaps ALARM (my capitalization here, not the good Doctor’s), is that the 51% shares sold to ECFH (Eastern Caribbean Financial Holdings) were valued at $41 million… We are dealing with a bank with assets of 813 million dollars, WE ARE TOLD! (my capitalization again, but the good Doctor’s exclamation mark). Something is certainly missing in the equation and the Mathematics has gone awry.”

Firstly, Doc, it is that kind of ALARM that you and other opposition New Democratic Party (NDP) propagandists are trying to create that I find ‘sickening’ and makes me want to puke. But on to the substantive issue. The question as to what is missing in the sale of 51% of the shares for 41 million dollars, while it has assets of 813 million. It’s something called LIABILITIES, Doc. If you ever looked at a balance sheet for any business, you will see three major headings – ASSETS, LIABILITIES, SHARE HOLDERS EQUITY.

So, yes, Doc, the bank has ASSETS of 813 million dollars but it has LIABILITIES of 731 million dollars, the difference between the ASSETS and LIABILITIES is 82 million dollars, which is the SHARE HOLDERS EQUITY. The SHARE HOLDERS EQUITY, also referred to as the BOOK VALUE of the company, is what is used to value the shares. Fifty one per cent of that comes to around 41 million dollars. Hope you understand that, Doc, or maybe your good friend Arnhim Eustace, whose debate on this issue I find sickening and makes me want to puke, can put aside the politics and explain that to you. Secondly Doc, if you don’t believe what “WE ARE TOLD!” all you have to do is get the 2009 audited financial statements of the bank which includes it balance sheet and would show you the assets, liabilities and share holders equity.

With regard to your questions about the properties that have been returned/resold to the bank, the Reigate building is not included in those properties. The Reigate Building belongs to National Properties (NP) and will be leased to the bank. The other properties which the bank occupies which have been resold to them are valued at around 20 million dollars. And the lands at Mount Wynne will be returned to NP when the 100 million dollar loan is disbursed by the Caribbean Development Bank (CDB).

The good Doc also asked if the 100 million dollar loan from the CDB is “to help the bank to divest?” Yes, Doc, the Prime Minister has said so several times, but if you don’t believe me you can check the Hansard. And your question, “if the bank was as strong as we were told, why did it need $100 million to help it divest?”, has a simple answer. It is to bring down the governments loans at the bank and increase the banks liquidity.

The good doctor ends his column with this: “it probably shouldn’t matter because do we not now have a bank of St. Vincent and the Grenadines with controlling shares by non-Vincentians? This kind of insular garbage which tries to appeal to the basest of nationalist sentiments is throughout the Doc’s column. Here is a man who has worked with a regional institution for most of his life, the University of the West Indies, who has spouted his support for regional integration, but all of a sudden it is ALARMING that a firm based in St. Lucia, our neighbours and economic partners with which we share the same currency and same economic union. Dr. Fraser, your column indeed is part of what makes the debate “sickening and almost makes you want to puke.”

Hans King, Regionalist and Graduate of the UWI, Cave Hill. B.Sc Management Studies (Upper Second Class Honours)

And yes, Press Secretary to the Prime Minister