Gonsalves denies insider trading

regionalralphgonsalvesKINGSTOWN – Prime Minister Dr. Ralph Gonsalves dismissed suggestions that he used insider information to get his family to withdraw funds from financially troubled Building & Loan Association (BLA) and accused Opposition Leader Arnhim Eustace of engaging in “nasty politics”.

“I did not utter a single word to them. Judge me not by your standard. I don’t get involve in insider trading,” Gonsalves told a news conference, adding he holds a “sacred position” and would “not make use of any information I receive to advise any member of my family”.

On Monday, Eustace addressing the decision by the three-month old Financial Services Authority to take over management and control of the BLA said he was also concerned that certain people had been able to withdraw a significant amount of money from the BLA prior to the FSA takeover and called on the institution to name them.

Eustace said that Gonsalves’ family had been allowed to withdraw their funds in October last year and called “on the FSA to give members a more fulsome account of the status of Building & Loan, with all deliberate speed”.

But Gonsalves, who in an immediate response to Eustace statement had indicated that he was not even aware of the withdrawal, elaborated on the matter on Tuesday, telling reporters that the funds belonged to his mother.

“Of course, somebody then, who is inside Building & Loan office, went and look up Theresa Francis and tell Eustace. But this is an attempt by Eustace to politicise something and score a narrow political point in relation to a woman who is 93 years of age in a wheelchair, suffers from Alzheimer’s,” Gonsalves said.

“I never expected I had to be talking here about the illness of my 93 year old mother,” Gonsalves said, urging the Opposition Leader to “leave my mother and children out of your nastiness”.

He said Eustace, who had taken a principled position on the BLA issue by urging depositors not to withdraw their funds, was being advised “by external failure who have nothing else to do but create mischief”.

Gonsalves said that in 2009, a report on the BLA had shown it to be in dire financial problems with some board members and their families benefiting from loans, as much as EC$900,000, and have not repaid them.

“I have all this information locked away in a particular filing Cabinet in this building which only my personal executive security knows,” he said, indicating that he could have used that information to the benefit of his family.

Gonsalves said that another report done by external auditors in 2012 painted a similar picture indicating that BLA is “in a critical position regarding solvency” and was also facing a liquidity problem.

The prime minister defended the decision to get the BLA back on a sound financial footing and appealed to depositors “not to take out your money and those who have done so…to pass it back…to strengthen this vital home grown institution”.

“This government is working with BLA…to ensure continued strengthening of BLA,” he told reporters.

Last week, the FSA announced it had taken the decision to protect the interest of stakeholders and that it is not a permanent arrangement even as it gave no indication as to how long it would maintain the situation and reiterated an earlier “appeal for calm and reasoned judgment on the part of all relevant parties at this time.

In a statement, the FSA said that “reacting in panic to withdraw monies and close accounts is not helping the institution”, assuring shareholders that it acts independent of the government.

“The objective of the FSA in assuming management and control of the Association is to safeguard the Association’s financial stability and future sustainable growth. The FSA is already working with the staff of the Association to stabilize and strengthen the organization,” the statement said. (CMC)

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