Arnhim, Leacock and NCB [A]

Fri, Oct 5, 2012

Editor: “I want to make a divergence from your banana and agriculture export subject to revisit a matter which we must keep on the front burner and that is the question of the former NCB, now Bank of SVG.

Mr President, I want to say it would appear to me that if the NDP had loved they (sic) selves more than it had loved St Vincent, we might have been the Government of today on the strength of that NCB issue alone.{{more}} I want to repeat that, if we had loved ourselves, that’s the NDP, more than the country, we may well be in the government day in that, that: bank would have fall and we would have been in government today. The consequences we have been acting out up to today.

“But the specific matter that I want to bring our listeners and the nation’s attention to is the fallout.

You would recall a few months ago, I asked two questions on that; I asked what is the market share of the bank and I went on to ask certain questions with respect to dividend and price earnings ratio and so on and so forth — sophisticated financial and accounting matters, but I was going there for a particular reason.

Now, the information is out, St Vincent just collected $800,000, Mr President, as our dividend on the profit of the new bank, bank of SVG — $800,000 and I think it was said they would pay $20 for every share or something like that or 20 cents per share. I think that’s the ratio, but it was $800,000. I just want to for ease of arithmetic, add another $200,000 to that and say, well look, we got $1million as our share of the profit. Now, assume that we, that it was $1million, we, in fact, had, but we know it’s only $800,000; assume that it was $1million we had, how much that is? $1million! How much did we borrow Mr Eustace?”

Eustace: “$100”

Leacock: “We borrowed $100 million. By that mathematics how many years will it take for us to get back that money by way of the dividends alone?”

Eustace: “Must be 1,000 years” [really?]

Leacock: “100 years.”

Eustace: “Yes, is a long time, a long period of time.”

Leacock: “It will take us a 100 years to get back our money, if we continue to get dividends at that rate. In other words, nobody in this lifetime now will see the recovery of that money by way of dividends earnings alone.

In addition to that, many people in the public are likely to believe that we’re now start to receive monies from the bank, without paying attention that the interest have been paid on the $100 million that they borrowed, and the interests is greater than what we have coming in. In other words the net cash flow will be negative for a long, long time.”

Eustace: “That’s important point”

Leacock: “Very important. What is worse, if we go by the current trend of the government, more than likely they will not apply the $800,000 to paying off the loan; it’s likely to go to the airport.”

Eustace: “Airport, yeah”

Leacock: “Again, which will not be recovered for a long, long time. There’s going to be more debate on this subject, but am whetting the appetite of the public for them to begin to appreciate the magnitude of the financial mismanagement in this country including the master stroke — the NCB.”

Eustace: “Yeah”

Leacock: “And to see what is the extent of the loss that is occurring to us and how long it’s gonna take. More so it is not the statutory corporation that will be burdened to pay back this money, it is going to be the taxpayers.”

Eustace: “The taxpayers, yeah”

Leacock: “That will be paying back that $100 million. People need to understand that, that’s what happening with that investment. While the dividends are coming and will be applied more than likely to a non-financial rewarding activity namely airport etc. We will be continuing as taxpayers to be paying for that debt for a long, long time. Ah just want to make that point.”

Eustace: “That’s a very good point. I hope the public understands.”

Leacock: “I hope they understand”

Eustace: “Mr. Leacock is referring to the $100 million that the government borrowed before they sold the 51% shares in the NCB for $42million, is the $100 million that we borrowed that he’s referring to and he’s saying the earnings that we have from our shares from that this year is $800,000 but you see, even if we increase it to $1million it will take a 100 years for us to pay it back – to get that back and the government will charge the taxpayers for paying that. So we will still pay the loan, cause any dividends they get will go to the airport.”

Leacock’s Stupidity

After listening to the above, I sent the following email with several recordings, the above labeled, “Leacock NCB Stupidity:

“Fellow citizens,

“I want you all to listen to these recordings and do your own analysis or ask your own questions.

Do we now own a bank? How many Vincentians make up the 95 per cent of the customers of NCB? If the bank folded would the government’s debts just disappear? If not, does it mean that the 95 per cent would have been able to collect their moneys once those debts were repaid? So AE made a decision to save the “supposed losses of a few” to the detriment of all.

Since according to the NDP the country is worse off now, does it mean that the NDP had no solution?

If AE made the correct decision in his support of the bank, is not the NDP just as culpable for anything negative that happens at the bank? If they took it off the front burner in 2010, what is the relevance now? Is not Mr Leacock’s presentation a direct result of NDP action?

And everyone else is foolish? My analysis, using all these recording will be published shortly.

Irresponsible Supporters

“And sometimes you know Mr Lynch and I have to say this, sometimes I hear some very, in my view, irresponsible comments being made. For instance, I have been criticized because I said I will not facilitate the crash of the NCB. There are those persons in this country who felt we should have encouraged a run on the bank – mash it up [EG echoes] – for that would be good politics for the NDP. That’s nonsense, as far as I am concerned. If the bank had collapsed as they wanted us to facilitate, all those persons would have lost their five, three, four thousand. And that we should happy cause that would help us to win. I door want to win on that basis,” Eustace, Newtimes May 5, 2011.

“If you had allowed information that you got from bankers to encourage the Vincentian to have a run on the bank with Clico, British American and now the bank, what would have been the economic situation?” quizzed EG.

“The people would have been worst off, so that is a good way to win election. Well I door want to win on that basis by bringing greater suffering on the masses of the people, I want to make that clear. Anybody who persists in that would never have my support.” Eustace concluded.

Does Eustace, the economist -money manager – think the Clico/British American debacle are similar? Who are the people who “persist in that”? Should they continue to support Mr Eustace? Indeed, who needs whose support?

Part B will appear next week. Leacock’s smug response to Hans King’s and my opinion on his presentation with Kingsley. And more of Eustace blast on those who wanted him to “mash up” the NCB.

Frank E da Silva