The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Bank of The Bahamas’ travails have undermined this nation’s banking regulatory regime, one of its minority shareholders arguing that the BISX-listed institution now represents a classic case of “poor corporate governance”.

Dr Jonathan Rodgers, the well-known Bahamian ‘eye doctor’, said: “Everyone says that in the Bahamas we have great banking regulations, but that is incorrect. Just look at the Bank of the Bahamas. There has been just poor corporate governance.”

Dr Rodger, touching on the subject during a lecture hosted by the Nassau Institute think-tank, said: “When a bank goes down, especially a bank owned by the Government - which has been screwing the minority shareholders - who bails it out?

“We have been bailing the bank out for the last five to six years with new bond issues. The Government has pumped a lot of money into the Bank of the Bahamas. That increases the fiscal deficit, which means that you have to borrow more US currency at the end of the day.”

Dr Rodgers has repeatedly urged that Bank of the Bahamas must not be allowed to collapse, arguing that this would result in events he described as a “category five economic tsunami”.

Tribune Business reported last week that minority investors in Bank of the Bahamas (BOB) are moving to seek financial redress for the destruction of shareholder value caused by $120 million in losses incurred over the past three years.

The Government is a 79 per cent majority owner of Bank of the Bahamas, which has 3,500 minority investors. The minority shareholder equity interest in Bank of the Bahamas has been progressively diluted, going from 49 per cent to 35 per cent, and now to 21 per cent following last year’s rights issue.