KINGSTOWN, St. Vincent, Feb. 27, IWN – The committee of Building & Loan Association shareholders elected on Thursday met on Saturday and prepared “a clear plan” of idea to propose to the Financial Services Authority.
“We have prepared a clear plan as to what we are going forward with, and some ideas for the FSA to probably consider as we assist this process, as we move forward with this process,” Junior Bacchus, chair of the seven-member committee said on Hitz FM’s “Hitz Talk” on Sunday.
“I don’t think it is wise to outline these things publicly at this stage. But we expect when we meet with the FSA. We will be able to share those,” Bacchus, a social activist, further said.
Public relations specialist Jerry George, another member of the committee who was also a panellist on the interactive programme, said, “Having said that, Junior, it is nothing nefarious. It is some very straight forward stuff, it is just not proper at this stage.”
The FSA took over management and control of the BLA on Feb. 1 after $9 million was withdrawn during a run on the building society during the preceding two weeks.
Bacchus noted that his committee’s proposals might not be applicable by the time it meets with the FSA.
“They may not be required because, when we go in, the FSA may say ‘Things are stabilised, we have been speaking to people who want to withdraw deposits [and] they are comfortable with the direction.’ So, maybe, the suggestions may not be even necessary,” Bacchus said.
“So, we prefer to wait and work with them (the FSA). But, clearly, the suggestion about the recapitalisation, the whole structure of financing Building & Loan, the kind of gearing that is there, the level of delinquency, all these are issues that we have to really take on-board.”
But Bacchus said that his committee does not expect the FSA to rescue singlehandedly the beleaguered BLA, which has been battling with governance and other issues over the past few years.
Read: BLA shareholders appoint committee
“Don’t expect that to happen. The FSA can help the new board and the shareholders to put more stringent mechanism, systems and so on in place and, of future boards, … work with them and … continue to be there monitoring.
“But the FSA can’t tell people they can’t take their investment. And that is, by and large, what will help. The FSA can help restore confidence…” Bacchus said.
He said the “major way” to save the BLA is to continue to see the work being done in a positive way, to give continuing support to the BLA, ensure that people who have committed to withdraw their money rethink that decision.
Bacchus also spoke of a need to spend time working along with the FSA and the new board of the BLA to restructure the BLA and satisfy the needs of investors.
“Structurally, going forward, Building & Loan has some major issues that whatever new board that comes on stream will have to look at. There is clearly a problem with the financing mechanism of Building & Loan, vis-à-vis the type of loans and investments,” Bacchus said.