KINGSTOWN, St. Vincent, Feb. 15, IWN – Shareholders and depositors in the beleaguered Building & Loan Association could have a legal case against the former managers of the institution if it were to go under.
Prime Minister and Minister of Finance, Dr. Ralph Gonsalves, said Tuesday that he does not think that BLA, which experienced a run on withdrawals in January and is being managed by the Financial Services Authority (FSA), would collapse.
But Gonsalves, who is also a lawyer, said if people were to lose money, they might have legal recourse against former managers of the building society.
“I am sure, speaking not as a goatskin lawyer, but as a man who has been around the law, professionally … for 30-odd years, I feel sure that if people were to lose money through Building & Loan, they should be able to go, successfully, against managers and board members,” he said at a press conference.
Asked if he would encourage lawsuits against the former manager and directors if persons lose money, Gonsalves said:
“I don’t think they are going to lose money, because, you have to have a lost. A fella behave wrongly on a civil matter, the issue only arises if you suffer damage,” he said.
“… I am not sure about criminal liability — but if there is anything that is done that amounts to criminal liability; but the question of acting negligently, I would say that it would give rise to actions in tort, that you have a fiduciary responsibility and you don’t act properly.
“For instance, how could you not appreciate that you need to follow the rules in relation to withdrawals, especially when you are saying that there is a run? That should put you on notice, on alert,” Gonsalves said.
He told the media that after a Jan. 18 letter by Ministry of Finance economist Luke Browne that asked if the institution was about to collapse, the BLA allowed depositors to withdraw special deposits in ways that contravene its rules.