Friday, September 30, 2016
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Bank of the Bahamas’ continued existence shows that the Central Bank’s application of its corporate governance guidelines is selective and “arbitrary”, a well-known attorney said yesterday.
Carey Leonard, the former Grand Bahama Port Authority (GBPA) in-house attorney, questioned why no one had been held accountable for the BISX-listed institution’s collective $120 million in losses over the past three years.
Addressing a Bahamas Institute of Chartered Accountants (BICA) seminar in Freeport, Mr Leonard also queried why Bank of the Bahamas had been allowed to continue operating despite being in persistent breach of several key Central Bank capital ratios.
He pointed to the Bank of the Bahamas situation as evidence of the Central Bank’s failure to enforce its corporate governance guidelines, and not hold its licensee’s Board of Directors and management accountable for what led to a $100 million ‘bail out’ underwritten by the Bahamian taxpayer.
Quoting from a 2012 presentation given to the Bahamas Association of Compliance Officers (BACO) by Cassandra Nottage, deputy head of supervision at the Central Bank, Mr Leonard said this showed that the corporate governance guidelines were not “prescriptive” or mandatory, but intended merely to “give direction” to licensees.
“The results at Bank of Bahamas, and the fact that it still has a license, is an indication that any enforcement of these guidelines is going to be done in a very arbitrary fashion,” Mr Leonard said.
He argued that the resulting absence of accountability and transparency meant that no one had been held responsible for the spectacular destruction of shareholder value at Bank of the Bahamas, which had built across successive administrations and Boards.
Mr Leonard’s comments are likely to strike a chord with many of Bank of the Bahamas’ 35 per cent minority shareholders, who have been further diluted in the wake of the recent $40 million rights offering.
Several have privately queried why no one has been held accountable for the dramatic decline in their investment’s value, although no one has spoken ‘on the record’.
Former managing director, Paul McWeeney, on whose watch the decisions leading up to the ‘bail out’ were made, is understood to have received a significant pay-off when he left.
And numerous shareholders, and outside observers, have questioned whether the current Board - all government appointees - have the necessary banking expertise and skills to turn Bank of the Bahamas around.
Mr Leonard yesterday argued that the absence of accountability at Bank of the Bahamas had cost Bahamian taxpayers “millions and millions and millions of dollars”.
Apart from the $100 million of government bonds injected to fill the ‘hole’ in Bank of the Bahamas’ balance sheet, the taxpayer is also on the hook for the $45.2 million worth of ‘toxic’ loans transferred from the bank and, potentially, the interest on the bonds if the loans cannot be recovered.
The National Insurance Board (NIB) has also suffered losses as a result of its 29 per cent Bank of the Bahamas stake, and it is likely the social security system may have to pick up most, if not all, of the recent $40 million rights offering.
The Bahamian capital markets have yet to be provided with an official statement on the outcome of the rights offering more than two weeks after it was supposed to have concluded.
Comments
realfreethinker says...
We really have a f..king criminal enterprise running our country. When are these peoplegoinf ro jail.
Posted 30 September 2016, 3:07 p.m. Suggest removal
MonkeeDoo says...
Why is there no personal accountability in all of this. That Bank has been left doing business as if nothing happened. Suppose someone unknowingly put some money in there and lost it ? I would have thought that the Central Bank and its Governor's past and present should be held accountable and personally liable. Including incarceration if appropriate. And send the Cabinet up too because they pulling the strings in Central Bank. Or YUKKIN the ROPE.
Posted 30 September 2016, 3:44 p.m. Suggest removal
Well_mudda_take_sic says...
Both Paul McWeeney and his brother Sean should be run out of the country for their involvement in the millions and millions of dollars of losses incurred by BoB and by extension the Bahamian taxpayers and national insurance fund contributors. They are two dispicable scoundrels alike. As for Wendy Craigg's failure to stand up to Christie as Minister of Finance when she was the primary regulator of BoB as governor of the Central Bank, well...you just can't say enough about her lack of integrity and incompetence! And rumours abound that Christie continues to keep Paul McWeeney and Wendy Craigg on the government payroll in the Office of the Prime Minister and/or Ministry of Finance just to ensure they don't spill any of the beans about the real happenings at BoB that have unjustly enriched so many of Christie's political friends and business cronies at very great expense to all honest hard working Bahamian taxpayers and national insurance fund contributors. Christie has permitted the royal screwing too of all minority shareholders and unsecured creditors of BoB.
Posted 30 September 2016, 4:20 p.m. Suggest removal
EasternGate says...
I agree 100%
Posted 30 September 2016, 4:23 p.m. Suggest removal
EasternGate says...
The @#$^%#@ Government appointees at Central Bank expect Government to provide a cushy contract when they retire from Central Bank. These suckers will not rock the boat!
Posted 30 September 2016, 4:26 p.m. Suggest removal
birdiestrachan says...
Perhaps Mr Leonard can tell the Bahamian public. why Finco and Grand Bahama Power company has not paid any dividends for several years. what has happened with the bank and the power Company? I purchases shares from both of them.
Posted 30 September 2016, 6:33 p.m. Suggest removal
DonAnthony says...
Birdie we have gone down this road before. Why do you keep stating this lie that Grandbahama power has not paid dividends? The truth is that they just paid a dividend in July, last year there were two dividends, one in September and one in December. The truth is that the power company has paid dividends for several years, every year. I wish you would not use this public forum to spread falsehoods.
Posted 30 September 2016, 10:04 p.m. Suggest removal
MonkeeDoo says...
Well birdie: The PLP destroyed the economy and thousands could no longer pay their mirtgage payments. You should be ashamed to even ask such a stupid self incriminating question. You are a bug part of the problem birdie. You support incompetent idiots who don't have a clue about governance or finance or nothing. And are fundamentally thieves & robbers.
Posted 30 September 2016, 9:32 p.m. Suggest removal
Greentea says...
Our governing system have done this damage to the economy- not the PLP or the FNM but BOTH under the same system. We have allowed our governments to make poor financial decisions, borrow as if we had oil wells pumping in our back yards, finance elections, indulge in massive corruption and cronyism, give contracts to unqualified people, give away Bahamian land to entities that take advantage of loopholes and never follow through to completion, give loans to political cronies that they don't pay back and without consequences, allow unqualified friends and family to get away with underhanded deals- often having to do with land- that should be criminalized. These same friends and family are allowed to assumed underserved, unearned positions of leadership in key areas when they have not shown themselves to be visionaries, good people managers or good fiscal managers or qualified to begin with, waste money on carnivals so that a few people could forget their sorrows and f'd up condition for a few minutes, become hamstrung by unions to such a degree that the governing school system is a complete and utter failure and service in this country's number one industry is sub par at best. It is a government that has made accountability a curse word and has utterly failed its people in developing a reliable energy system, has refused to intervene with better banking laws as banks milk the Bahamian people dry, refuses to respond in any meaningful way to report after report of massive theft and corruption in government agencies and I know this is going to make people mad- but a government that decided to roll a dice and allow Izzy to develop an outsized project based on a model whose day has past and in a market where two out sized projects like Atlantis and Bahamar could not survive- hoping for a double six and getting zip. And now this government has decided to play games with the Chinese who now has this country by the short and curlies. I have been saying for a long time we need to be honest and devalue the Bahamian dollar because its buying power has decreased in big ways in the past ten years. This is just confirmation of all I have feared. We must dismantle the system that allows these azz-h**s to pretend as if they know anything about economics and more than that- anything about running a country in a responsible, ethical or visionary manner. Not ONE politician in government right now has done anything memorable to move this country forward- NOT ONE. Their service has been completely forgettable and history will not remember a single one.
Posted 1 October 2016, 5 p.m. Suggest removal
MonkeeDoo says...
Greentea: AMEN !
Posted 1 October 2016, 11:26 p.m. Suggest removal
hallmark says...
Greentea: AMEN !
Posted 3 October 2016, 2:32 p.m. Suggest removal
sheeprunner12 says...
I concur with the above statements
Posted 3 October 2016, 3:06 p.m. Suggest removal
birdiestrachan says...
Don Anthony they GBPC must have paid you but not me. And the same must be the case
with FINCO they pay some and not others.
Posted 3 October 2016, 4:29 p.m. Suggest removal
DonAnthony says...
Birdie GBPC paid 14 cents per share in July, last year 7 cents per share in sept, and 5 cents per share in December. Contact your stockbroker or check your brokerage account, or if you do not have one, the security depository office in Nassau which is the official registrar for all stockholders.
Posted 3 October 2016, 6:04 p.m. Suggest removal
bogart says...
Apart from the other issues facing BOB, someone needs to be held accountable in the latest offering in that when prospective buyers are viewing the make up of the Board of Directors in order to gain knowledge they will see the listed Board of Directors naming a Mr. Wadye Anthony Christie as a Managing Director. This seems to be false and misleading as I believe his contract was not renewed some time ago. This continuation then would be false advertising and someone or the entire department should be fired for this enormous blunder and all the money spent to put forth the offering. Quite astonishing that noone seems to realize that in purchasing shares any savvy investor looks at the makeup of the decision makers of the company.
Posted 4 October 2016, 8:46 a.m. Suggest removal
bogart says...
The make up can be seen on the Bisx bahamas webside up to today's date at 8.49 am
Posted 4 October 2016, 8:49 a.m. Suggest removal
SP says...
**Pirates One And All! We Must Get Of Rid Of These Thieving Bastards & Audit The Country**
Posted 8 October 2016, 11:47 a.m. Suggest removal
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