KINGSTOWN, St. Vincent, Feb. 24, IWN – A shareholder of the Building & Loan Association (BLA) says the Financial Services Authority (FSA) lacks the capacity to run the building society, which it took over on Feb. 1.
Ron Browne told a meeting of fellow BLA shareholders on Thursday that the law permits the takeover, but there are also other considerations.
“There is a difference between having resources, which means that you must have the financial capacity, the management capacity to deal with an association which has 200-plus million dollars in loans 170-plus million dollars in monies deposited.
“You don’t just come out of the blue and say I used to work in the government as an auditor general and therefore I am capable.
“The institution (the BLA) now functions as a bank, and, therefore, the people who are going to deal with it must have some level of banking knowledge and banking capability,” he said.
Browne told the shareholders that his major concern was that they were seemingly having the meeting “in a vacuum” because they don’t know why the BLA was taken over.
He said shareholders were assuming that it has to do with the association’s viability and told the meeting that they were asking questions of the wrong people.
The FSA, Browne however said, must have had reasons to take over the BLA.
“They, therefore, owe the shareholders of the Association an explanation, not two months form now, not six months from now — now!” he said.
“They know why they took over the Association. If their reason for taking over the Association, in the view of all of us, as membership, is not valid, then we challenge them on it. But they owe it to us to tell us why they took over the Association,” he said.
At the time of the meeting, the API was yet to release statements from the FSA leadership detailing the take over.
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The FSA — the regulator of non-bank financial institutions here — assumed management and control of the BLA two weeks after a newspaper article trigged a run that drained EC$9 million from the institution.
Browne said other financial institutions in SVG might be in a worse off situation than BLA.
Further, when the FSA took over the BLA, it disbanded its board of directors.
“I don’t know that the board has done anything right or wrong. They are not there because the FSA removed them. The FSA owes it to me to tell me what the board did wrong,” Browne said.