The use of the Bahamian people’s “sacred” National Insurance Board (NIB) monies to bail out troubled Bank of the Bahamas has been challenged by an FNM MP, who is calling for policies governing the investment of public monies to be tightened.
Loretta Butler-Turner told Tribune Business that regardless of whether NIB, the Public Treasury or a combination of both were used to take up the BISX-listed bank’s “entire” $40 million rights issue, it did not represent a good investment of the people’s monies.
The Long Island MP said she was especially troubled at NIB’s potential role, given that its $1.6 billion reserve fund was supposed to provide short and long-term financial benefits (including pensions) for the Bahamian people.
“NIB is the social safety net for Bahamians, and it’s supposed to have an investment portfolio that yields returns for the stability of the fund,” Mrs Butler-Turner told Tribune Business.
“With Bank of the Bahamas’ performance, it’s not a good investment for the NIB Fund. NIB funds are supposed to be sacred protection for the future, especially those pensioners. Nor is it a good investment of Public Treasury funds.
“We need to now have some policy positions on how Bahamian funds are invested; NIB, everybody. We know that if the contributions of the workers are not going up, there will not be a fund in 15-30 years to sustain pension contributions today.”
Bank of the Bahamas’ disclosures to-date have failed to identify the source of the $40 million, although most observers suspect all - and at least the majority - came from NIB, given the Public Treasury’s cash-strapped state.
The Government, through NIB and the Public Treasury, is now a 79 per cent majority shareholder in a bank that has lost more than $120 million in just over three years.
NIB’s financials have revealed that it has taken a more than $27 million hit over the past two years $2014 and 2015) on its Bank of the Bahamas investment, with Mrs Butler Turner echoing those who have described the rights issue as another “bail out” of the latter.
However, some, including Dionisio D’Aguilar, the FNM candidate for Montagu, have argued that the Government has little choice other than to stand behind Bank of the Bahamas.
They believe the bank is “too big to fail”, and that its collapse would drag down an already-struggling Bahamian economy, along with thousands of Bahamian depositors (including the Government and web shops).
Meanwhile, Mrs Butler-Turner, who revealed that she was one of Bank of the Bahamas’ 3,000 minority investors, suggested she would use the bank’s travails - and use of the Bahamian people’s monies - to “flip the script” on the Government when the House of Assembly resumes today.
She said the governing party plans to call for a select committee to investigate the Bahamas Telecommunications Company (BTC) privatisation that took place in 2011 under the former Ingraham administration.
Its Christie government successor has accused the FNM government of effectively ‘giving away’ BTC for little to nothing, given that the deficit in the company’s now-closed original pension fund has ballooned to $90-plus million and has to be filled by the taxpayer.
While this ignores the fact that BTC’s privatisation was an essential step to communications market liberalisation, a better deal for consumers and ending the Government’s ‘conflicts of interest’, Mrs Butler-Turner accused the Christie administration of using the issue to distract attention from its woes and “shift the national conversation”.
The Long Island MP revealed that she planned to counter by using Bank of the Bahamas, and by contrasting the FNM’s efforts to develop a ‘shareholder economy’ with the PLP’s economic management strategy.
“I’m probably going to have to look at the whole methodology of how they’ve done business,” Mrs Butler-Turner told Tribune Business.
“We had actually turned Bank of the Bahamas into a shareholding bank for Bahamians, and what we’ve seen over recent years is that the value of those shares has not produced anything for the investors. With the Government doing this bail-out, it’s become a cash transfer station.”
The Government is seeking to sell HoldingCo, the company that owns a 51.75 per cent majority interest in the new mobile operator, Aliv, but Mrs Butler-Turner contrasted this with its failure to follow through on the Ingraham administration’s plans to sell a 9 per cent equity stake in BTC to Bahamian investors.
“The PLP, their interest is not so much in empowering Bahamians and allow them to earn profits on their investments, but to look after the few and make them better off,” the Long Island MP charged.
Mrs Butler-Turner said the former Ingraham administration had sought to create “a shareholder society, so Bahamians could earn greater returns on their investments as opposed to having funds sitting as static savings in deposit accounts”.
As evidence, she pointed to the initial public offerings (IPOs) of Commonwealth Brewery and Arawak Port Development Company (APD), the last two that occurred in the Bahamian capital markets.
Comments
DonAnthony 7 years, 5 months ago
We need a commission of inquiry into BOB. Why will the FNM not pledge to do that? I am tired of the fnm just criticizing this corrupt govt, tell us that these criminal acts will be prosecuted and let the chips fall where they may. It is not sufficient to just criticize, what will the FNM do to correct the situation? The Bahamian people deserve justice as already almost 200 million of our tax dollars/ NIB funds have been used to float this bankrupt bank with almost assuredly at least that much again needed to avoid liquidation.
Sickened 7 years, 5 months ago
FNM ain't gonna do Shiat! Look at the LOI and Raynard. All kind of biggity talk with no substance, no follow up, no friggin morals. Both parties should be excommunicated! WUTLESS!!!!
GrassRoot 7 years, 5 months ago
I heard the FNM ran out of backbones for Minnis. He needed at least one new one per day. This FNM will not win. Not with this team. Good luck and good night Bahamas.
Well_mudda_take_sic 7 years, 5 months ago
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Well_mudda_take_sic 7 years, 5 months ago
Major crimes have been committed in the BoB debacle by the likes of Crooked Christie, Halkitis, Craigg, McWeeny, Demeritte, Rolle and others, not to mention the corrupt politically connected recipients of millions and millions of dollars of unsecured advances from BoB. The recipients of the unsecured advances from BoB had no ability or intention to repay the advances at the time they were made. Mangy Woman Slapper Miller and members of his family owe BoB in excess of $30 million of unsecured advances repayable on demand that have not been repaid. Crooked Christie has prevented BoB from demanding the repayment of these advances so that assets of value held by the likes of Miller and his family members can be seized and sold at auction to help defray the losses being filled in by amounts taken from our National Insurance Fund and VAT dollars.
TalRussell 7 years, 5 months ago
Comrades1 Just proves Long Island’s MP Loretta, does not even cringe at her definition of what National Insurance Board funds are “sacred,” whilst knowing she sat around the Red Movement’s cabinet table, and she never opposed Papa Hubert’s strong-arm decision back in 2012 to use $11 million of the peoples “National Insurance Board premiums” to fund $11 million of an “unsubscribe share issue” in a foreigner’s beer making company. Unsubscribe as in, no institutional or private investors stepped forward to subscribe to the foreigner's beer making $11 million.
Likes I keep saying. I didn't even have make this one up. Is there any wonder so few have even bothered to register to vote come the 2017 General?
asiseeit 7 years, 5 months ago
TAl, I would think the Bahamian people made money on that deal and continue to receive dividends as share holders in said beer making company.
TalRussell 7 years, 5 months ago
Comrade Asiseeit, it would seem that both you and the member for Long Island may have skipped right over WHY the private investors DECIDED TO leave the $11 million UNSUBSCRIBED that the former Red Movement regime STEPPED FORWARD to use the premiums belonging to the people at the National Insurance Board when it subscribed to the $11 million?
Maybe a statement made by Commonwealth Breweries that in order to remain successful in the demanding world of today we continue to make sure that "Kalik is seen as 'The Beer of the Bahamaland, the pride of every Bahamalander," and that "Heineken is seen as the beer for the man of the world."
Now, how foreigner is that statement in your own proud nationalist's mind?
bogart 7 years, 5 months ago
Effects of alcoholism include liver disease, nervous system, diabetis, affect pregnancies, the developing baby, affects the child of the mother drinking alcohol etcetcetc. Socially alcoholism causes vehicular accidents, family problems, fights in bars etcetc. Of course all these illnesses will be paid by NIB to correct the investment in an alcohol manufacturing investment. Now on the other hand if the national entity NIB had invested in a technology advancement company there would be a different set of outcomes and dividends. Bey after all dis I sure need me one cold one. Switcher that is.
TalRussell 7 years, 5 months ago
Comrade Bogart, I guess we done knows Asiseeit's reaction if a tomorrows Tribune headline read: PM Christie signs off on using $11 million dollars of the peoples NIB premiums to subscribe to a IPO issued on behalf of the Web Shops?
The Bahamaland Christian Council, said not a word regarding the social ethics that went missing when the Red Movement regime invested $11 million dollars in Workers NIB Premiums in a Beer company.
bogart 7 years, 5 months ago
Surely the appointed members of the Board of Directors would have a say in decisions being appointed on an organization dedicated to the promotion and preservation of healthy and long lifestyles.
asiseeit 7 years, 5 months ago
The Bahamian people once again must pay for politicians folly! VAT, sure has made my life so much better, all those services i receive. Looking forward to NHI and all it costs.
Well_mudda_take_sic 7 years, 5 months ago
The references below to Sean McWeeney and his brother Paul McWeeney are all we need to know about the McWeeney family. Articles published in The Punch in December 2013 informed the Bahamian public that Bank of The Bahamas (BoB) had made the following loans and advances connected to political friends and cronies of Perry Christie:
• $28 million to Leslie Miller and/or entities owned by him and/or members of his immediate family. • $3.5 million to Obie Wilchcombe & Pleasant Bridgewater re. Universal Distributors Bahamas Ltd., a company apparently now defunct for all intents and purposes. • $8 million to another senior PLP cabinet minister, rumoured to be pudgy with short stubby grubby dirty sticky fingers. • $6.3 million to PLP business woman Patricia Mortimer who purportedly is a best friend and business partner of Lady Poodling and the owner of several shops at Nassau International Airport. • $2.3 million re. GEMS Radio Station which at the time was owned by Debbie Bartlett and Cyprianna McWeeney, the latter being the wife of PLP lawyer Sean McWeeney who is the brother of Paul McWeeney. • $4.5 million to enterprises owned/controlled by Edward Penn. • $4.6 million to Phil Lightbourne re. Phil's Food Services (Phil Lightbourne was the front man and spokesman for Ben Frisch who owned Bahamas Food Services up until the PM allowed the Frisch Family to sell it to Sysco Foods (a large U.S. public company) in April 2013.
Keep in mind that BoB is majority owned and controlled by the Bahamas government; accordingly its overall affairs fall directly within the portfolio of Christie as both PM and Minister of Finance. Most, if not all, of the loans and advances mentioned above had to be fully provided for by BoB, and likely have since been written off by BoB at great cost to hard working honest Bahamian taxpayers. Small wonder that, notwithstanding the mega millions in taxpayers’ funds (including our National Insurance funds) required to bail out BoB, Perry Christie was only too quick to come to the defense of Paul McWeeney (brother of Sean McWeeney) for having so handsomely rewarded the PM's political friends and business cronies! And let's not forget that Crooked Christie arranged for Paul McWeeney to receive a $750,000 termination bonus from BoB when the public's loud voice forced Crooked Christie to fire him from his cushy managing director job at BoB. Unbelieveably, Crooked Christie has granted crooked Paul another cushy job elsewhere in government. Crooked Christie, his side kick Paul and many others responsible instigating, enabling or wrongfully benefitting from BoB's corrupt lending practices have undoubtedly committed serious financial crimes for which they should be made to "do the time"!
Honestman 7 years, 5 months ago
BLACK FRIDAY IS THIS FRIDAY
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