Bank Causes Distress


20/01/2004



The country's financial services sector is receiving a black eye in the international arena with scores of depositors and creditors of Suisse Security Bank and Trust Limited demanding that they receive the millions of dollars they had in the institution.

 

Their money is being held up as a court matter drags on nearly three years after Central Bank Governor Julian Francis revoked the bank's license on the ground that Suisse Security was carrying on its business in a manner detrimental to the public's interest and the interests of its depositors and other creditors.

 

The Journal has now learnt that parties involved in the matter are becoming increasingly frustrated over what they perceive to be "the lackadaisical attitude of the court" and a significant backlog of cases in the system that is "slowing down the process of justice."

 

Meanwhile, Raymond Winder, provisional liquidator in the matter, continues to be inundated by requests from angry clients who are unable to receive any money because the legal matter is still ongoing.

 

For more than two years, he has faced the task of informing the creditors and depositors that their funds remain frozen.

 

In one of his reports to the Supreme Court, this one dated August 2002, Mr. Winder said that, "As provisional liquidator I continue to receive an abundance of telephone calls from depositors and creditors of the Bank."

 

Following the governor's action on April 2, 2001 to revoke the bank's license, Suisse Security filed a notice in the Supreme Court challenging the revocation order.

 

Last April, Justice Austin Davis dismissed the bank's case, but the bank appealed the decision.

 

Suisse Security officials responded to last April's ruling saying that it was "most disappointing and an outrage."

 

The Central Bank, meanwhile, in its response, said it was "pleased that the statutory appeal brought against its decision to revoke the bank and trust license of Suisse Security Bank and Trust Limited (SSBT) has now been decided. The Bank is satisfied with the decision relating to the appeal."

 

But no date has been set yet for the appeal.

 

"We are awaiting a date from the court," said Mr. Winder, a Certified Public Accountant and partner in Deloitte & Touche. He added Monday that his powers as a liquidator were limited given that the matter has not yet been resolved.

 

But Mr. Winder pointed out that he could not make any further comments given that the case is before the courts.

 

As provisional liquidator, he has the power to take possession of, collect, and protect the assets of the bank, but not to distribute those funds until further order.

His task has clearly not been an easy one.

 

In the report mentioned earlier, Mr. Winder said that, "On the morning of April 9, 2001, prior to receiving the Order of my appointment of Provisional Liquidator, I learned that Messrs. Michel Harajchi, Derek Ryan, Christopher Lunn and Wendell Ferguson had broken into and gained access to the Bank's premises."

 

He also said at the time that former officials of the bank had reactivated their web page, informing that they could be contacted for updates on what was happening at the bank.

A source close to the case expressed frustration Monday that the matter has not yet been heard on appeal.  But he spoke anonymously because of the status of the case.

 

"This sheds a terrible light on [the jurisdiction]," he said. "The matter is just sitting there."

 

The source also noted that one of the failings of The Bahamas, as a premier financial services jurisdiction is that parties usually are unable to have their cases heard "in a timely fashion."

 

Throughout the proceedings, the bank's chairman, Mohammed Harajchi, has said that he plans to reopen his institution, insisting that Governor Francis erred in his decision to shut the bank down.

 

 

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