KINGSTOWN, St. Vincent, Feb. 15, IWN – The former CEO of the Building & Loan Association on Jan. 22 wrote the Minister of Finance asking for help, four days after a letter in a newspaper triggered a run on the institution.
Earl Crichton, in his note to Prime Minister and Minister of Finance, Dr. Ralph Gonsalves, said the letter by Ministry of Finance economist Luke Browne, was “callous” and “misleading”
Four days after it appeared in The Vincentian newspaper, the letter, Crichton said, was “already causing serious anxiety to the investors of St. Vincent Building & Loan and causing a run on the lifeblood of institution.
“Please advise how the Ministry will assist in alleviating the damage being caused by this article,” he told Gonsalves in the letter.
But Gonsalves said that its seems that the BLA and Crichton “didn’t ask themselves how could they alleviate the problem.
“Because they were not following the rules. There was poor governance [of the BLA],” Gonsalves told a press conference on Tuesday.
He said Article 77 of the BLA’s rules says three months’ notice must be given for the withdrawal of special deposits.
“The board may, at any time, for special reasons, waive such notice and thereupon the depositor shall forfeit three months’ interest,” he said, quoting the rules.
“And, despite the fact that the officials in the FSA (Financial Services Authority) spoke to hierarchy of Building & Loan in that very week when Mr. Crichton was writing asking the ministry what can you do to help, they were not following the rules,” the Prime Minister said.
“All you had to do was turn up and say I have money here,” Gonsalves said, adding that persons could have simply said they needed the money to pay for a relative’s medical expenses.
“So, what happen, nobody asked how much money is required for your medical bills. You want the whole million? What happen, you having a heart transplant, a liver transplant, a kidney transplant and a new foot?”
He said enough notice must be given to allow the association to manage its cash flow.
“[But] they proceeded willy-nilly just to give the money, the special deposit. That is a species of irresponsibility — whoever you give it to.
“This is not situation where you are in a normal flow, where the odd person would come and ask you to take out their money and you give [them] then and there and they forfeit three months’ interest,” Gonsalves said.
“Why you ain’t help yourself by applying the rules?” he reiterated, adding,“Now, I ain’t have nobody defending in this business, other than the interest of the depositors.”
On Feb. 1, the FSA temporarily took over management and control of the BLA and disbanded the board of directors and chief executive officer.