KINGSTOWN, St. Vincent, Feb. 14, IWN – A call went out Wednesday for “persons who have interest in [the] Building & Loan Association [to] come let us reason together” at a meeting next Thursday, Feb. 21.
Social activist Junior Bacchus made the call at a press conference, where he announced a meeting of shareholders of the BLA.
The meeting, scheduled for 5 p.m. at the Methodist Church Hall in Kingstown, is expected to take place before the Financial Services Authority (FSA) meets with shareholders of the beleaguered building society.
Bacchus, along with retired public servant, Jeannie Ollivierre, and trade unionist, Cools Vanloo, said BLA shareholders have been asking their advice about whether to withdraw their deposits.
The BLA experienced a run on withdrawals in January after a government economist wrote a letter in a newspaper, asking whether the BLA was about to collapse.
The FSA, on Feb. 1, took over the management and control of the BLA and has said that it will meet with shareholders at a date to be announced.
Bacchus said it is important that next Thursday’s meeting takes place ahead of talks with the FSA.
“We thought it necessary to meet as soon as possible before they (the FSA) even have their meeting so that we, as shareholders, as members, could get our thoughts together, have our position clearly set out, and have questions that we require the FSA to answer, properly articulated and get proper answers,” he said.
He spoke of the number of persons giving the BLA the three-month notice for the withdrawal of their deposits.
“… if they allow the flow of letters to continue, where people are seeking to have their monies back, at some point, the association will collapse,” Bacchus said.
He said that if the 72-year-old association collapses, a judicial manager will be appointed.
“It will go similarly, in simple terms, as what happened with British American,” he said, mentioning the failed insurance provider, which also accepted deposits for investment.
“Many, many Vincentians will lose if we ever get to the point where there is this flow of funds out of the Association and persons are unable at some point to get back their money.
“… There could be chaos, there could be violence, there could be riots. The lives of people could be at stake if we allow that Association to get to that point,” Bacchus said.
He said that after the FSA removed the Board of the BLA, several shareholders contacted Ollivierre and other persons who were known to attend BLA meetings regularly.
Bacchus said the BLA has had its “ups and downs”.
“This is not the first time that Building & Loan is facing these kinds of challenges,” he said.
With the poor state of the economy, many persons are unable to service their loans and there is a high rate of delinquency, Bacchus said.
He further said many other organisations are facing the same kind of challenge.
“And you will always have to work with your members to ensure that you get back on good footing. And Building & Loan has done that in the past.”
But Bacchus said the FSA “thought it necessary to intervene” following the “ill-advised” letter by Luke Browne, which “created panic” when it was published in The Vincentian on Jan. 18.
“From the reports we got, several people [were] going and remove their monies. And we believe if people continue to remove their monies, the association will collapse,” Bacchus said.
“Let us vent our frustration, let us discuss [in] what direction we want to take this association and let us put together a plan to engage the relevant authorities to restore confidence, to save the Building & Loan Association,” he said as he urged shareholders to attend the meeting.
“We cannot sit idly by and allow Building & Loan to collapse. I don’t know what my grandchildren will think of me…” Bacchus said.
If the investors or depositors decide to all withdraw their money, there will not be sufficient cash to pay them. The Association can be liquidated and the mortgages it holds sold on to another financial company. Or the whole thing can be sold off after making some changes or abandoning the present articles and constitution.
Can the Association trade out of its present situation? most doubtful after the damage has been inflicted by the way the whole thing has been handled by Gonsalves the present minister of finance.
Gonsalves told us he has acquired $15 million to facilitate and help BLA. Junior find out how and under what circumstances’ that will be available.
Unlike the rest of you I believe the FSA is the correct route.
Gonsalves as minister of finance has failed in his duty to the people, anyone with an ounce of decency would resign.
Its not what they have done, its the way they did it, that has people thinking there was something conspiratorial about it.
There is a cloud of darkness and doubt over the whole thing from 2009 to PM Gonsalves mothers cash withdrawal, to Luke Brownes letter, to the FSA take over, now to the disgraceful disclosure by Gonsalves [for his own purposes], of the secret files of the ministry of finance and BLA. A disclosure that seals the fate of BLA as a failed association, with no regard to small investors.
Peter, the only person that needs to RESIGN is your U, as a POSTER on this BLOG, because it is pure adulterated IDIOCY can be seen in your postings.