KINGSTOWN, St. Vincent, April 12, IWN — The head of the committee of Building & Loan Association (BLA) shareholders interfacing with the Financial Services Authority (FSA) wants the FSA to continue working with the financially troubled building society beyond Aug. 15.
Social activist Junior Bacchus told I-Witness News on Friday that the FSA, which took over management and control of the BLA on Feb. 1, told BLA shareholders at a meeting — closed to the media — on Thursday that it has decided on a two-phase plan.
The first phase should end by the end of June and the second phase should end by Aug. 15 after the appointment of a chief executive officer and a new
board of directors, Bacchus said.
“My personal view is that I will not want the FSA to leave by the 15th of August because the amendment of the rule will give rise to people taking their money on August 31st.
“I don’t want them to leave when people are coming for money. They are the only body outside of the shareholders who can make changes to the rules. And if you have to make changes to the rule to address the liquidity issue, then I believe the FSA should still remain, working with the new board at least beyond the 31st of August,” Bacchus said.
The FSA has changed the BLA rules, in some instances restricting the frequency and size of some withdrawals and doubling the notice period for withdrawals of some investments.
“I am satisfied that the FSA is making some progress in dealing with some things and I think the general consensus from the meeting is that as far as possible, they should move quickly towards normal business, except where there is need for liquidity management,” Bacchus told I-Witness News.
“I know you can’t give back people all their money, but, at least, at the end of June, pay people the interest for people who earned interest and settle all the redeemable shares that matured during the period of the takeover.
“Then, based on the liquidity, you then refund people who are asking for their deposits. But, in the meantime, we should convince as many people as possible to stick with the association and change their minds — withdraw their letters,” Bacchus said.
The FSA on Thursday told BLA that 666 of the 22,000 shareholders had submitted letters of withdrawal.
Shareholders told I-Witness News that they got the impression that these 666 shareholders could cause the BLA to collapse if they should withdraw their investments.
The FSA has said that it is committed to remain at the BLA for as long as it takes to stabilise the 72-year-old building society, which experienced a run of EC$9 million in two weeks after a letter written by politician and government economist, Luke Browne, was published in a local newspaper on Jan. 18.