By anguillian September 13, 2013 08:46



Sutcliffe Hodge

Sutcliffe Hodge

Good day fellow Anguillians and residents of Anguilla.
The events over the past several weeks involving the intervention of the Eastern Caribbean Central Bank (ECCB) in our two indigenous banks, namely, The National Bank of Anguilla and the Caribbean Commercial Bank has sparked much rumour and gossip. It is pleasing thus far to see how responsible, patient and tolerant the general public has been with respect to this occurrence. Just after the intervention by the ECCB, there was another announcement by Rev. Dr. H. Clifton Niles where he submitted a letter of resignation from the board of Anglec. The contents of that resignation letter is cause for much concern, if some or all of the allegations mentioned therein are true. In this address, I would like to elaborate on these two major events to bring some perspective to each.

As it relates to the intervention by the ECCB in the running of NBA and CCB, this involvement has the support of, The Government of Anguilla, the Foreign and Commonwealth Office of the British government, the IMF and the World Bank. In a statement issued by the Hon. Sir. Dwight Venner Governor of the ECCB to the press in Anguilla on 12 August four reasons were given for the ECCB intervention; I quote, “1. The economies of the Eastern Caribbean Currency Union(ECCU) are mainly dependent for their growth on two sectors, tourism and construction; 2. The global crisis has had a major impact on these sectors; 3. Growth in Anguilla has virtually collapsed, falling from an average of 15.8% between 2005 – 2007 to an average contraction of 5.5% for the period 2008 – 2012; 4. The banks have seen the non performing loans escalate to levels beyond the guidelines set by the Central Bank and this in turn has resulted in the banks not meeting their capital requirements.” End quote.
It is important to examine the four reasons given by ECCB for taking control of the two banks to better understand how it all came about and to see what corrective measures if any could have been employed to avert or delay the intervention. While I don’t profess to be an expert in banking by any means, I believe that I have a relatively good grasp of accounting, finance, economics and business in general to be able to at least do some rudimentary analysis of the issues.
One of the problems we face in Anguilla is our over dependence on the tourism and construction industries, like many other member states of the Eastern Caribbean Currency Union. Over the many years we have spent much time talking about the need for a broad base economy where we are not totally dependent on tourism and construction, but little if anything has been done about it. In my estimation, a decline in these two industries played a role in the contraction of our local economy a side effect of the global financial crisis. The
time has come for less talk and more action. We need to put our thoughts together and diliberately diversify our economy. While some persons would have us believe that they are willing to work across the isle to make things happen in Anguilla, such promises are merely political statements designed to keep you the voter hopeful but never better off.
This presentation is not the appropriate medium by which to discuss in detail areas where focus can be placed to ensure a more stable economy. However, I will hasten to mention a few possibilities in brief; we need to increase our population by attracting persons to our island with spending power, we need to exploit some of the new emerging opportunities in the financial services sector, we need to exploit niche markets within the tourism sector i.e. medical tourism, sports, music tourism, eco tourism etc. We also need to place greater focus on agriculture and fishing, aggressively encourage the expansion of the existing medical school and even consider attracting a marine biology school. After all, Anguilla boasts some of the most beautiful beaches and marine life in the world.
These suggestions are by no means a way of moving away from tourism as our main industry. I do recognise that we have invested heavily in tourism and as such what we need is to get the enabling infrastructure in place to drive the much needed growth in this sector. The current average annual occupancy is way too low and is believed to be impacted for most part by lack of effective marketing and airlift from major markets coming directly into Anguilla. So clearly, we need a jet airport and a proper seaport. We also need activities to attract more visitors; sun, sand, and sea are not enough for the discerning traveller anymore.
With respect to construction, building a nation, is not only done with blocks and concrete. I am of the view that construction is not an industry, it is a project. It is therefore not sustainable. We cannot cover over the entire island in concrete over the next 50 years and call that progress. Therefore, we have to look at maintenance and the need to transition our workforce to other sustainable means of employment that would allow our people to work year round, hence the importance of diversifying our economy as soon as possible. The people of Anguilla deserve aggressive action as many persons are hurting financially. How we fare in large measure has to do with how we respond. Our response as an island thus far has been quite disappointing. Many people including our little children and the elderly are going hungry while many others are undernourished. As a nation, we should be embarrassed.
Meanwhile, as recent as this past Saturday night 7th September, there was a public meeting held in East End by the Anguilla United Front with nothing but rhetoric coming from the platform, just more cursing and blaming and NO SOLUTIONS. While this is happening, our elected and appointed government officials seem more focused on consolidating their position for the next election. My question is what about the people who they are elected to serve? Politics should be about people not about power and employing strategies just to
retain or regain power. Where is our love for country? Anguilla is crying out for passionate leadership. This is the time when the focus should be about containing cost while driving economic expansion and diversification. This is an initiative that Government needs to be at the forefront delivering, with the support of the Anguilla Chamber of Commerce and the private sector. Leaders of Anguilla, we need a better response and we need it now.
Anguilla’s economy was booming during 2003-2007 when the world economy was rebounding following the events of the attack on the World Trade Center on September 11th 2001. It was during this period when our then Chief Minister, Mr. Osbourne Fleming, was saying to the people of Anguilla build, build, build and there was light at the end of the tunnel. As it turns out, what he might have been looking at was a train wreck which is what we have right now.
It was during that period when the cost of the civil service increased by 91%. It was during this period when some salaries for politicians and top civil servants increased by as much as 25% in one year. There was nothing going on in Anguilla at the time to cost justify this reckless and irresponsible behaviour. So in addition to people losing jobs as a result of the global economic down turn, taxes were increased to pay primarily the very high wages. You see, during 2003- 2008 when the world economy was doing well, our economy was also doing well and there was windfall money around from the sale of real estate. This money all went into government’s consolidated fund where it was used to pay salaries, among other things. Now there is no money coming into government from taxes on real estate sales so taxes were raised to pay salaries, among other things. If this reckless increase in salaries had taken place in the private sector, the management team responsible for this salary increase would have been fired.
Be that as it may, Hon. Sir Dwight Venner also noted the percentage of non performing loans that had increased beyond the guidelines set by the Central Bank as a reason for the ECCB taking control of our two indigenous banks. This of course, is as a result of many loans not being serviced because some persons in Anguilla are not working and/or their businesses are underperforming. It would be interesting to know what percentage of the delinquent loans are business loans as compared to consumer loans, however, in the absence of such information I will move on.
The intervention by the ECCB of NBA and CCB has also sparked much gossip as to the Chief Minister’s involvement in the take over. It is preposterous to insinuate that the Chief Minister was single-handedly responsible for the ECCB intervention. While he is a member of the ECCU, I am sure that the financial performance trends and the key performance indicators, brought on the decision by the ECCB to intervene. On the other hand, the Chief Minster has
no reason to gloat about the intervention, as the intervention speaks to the failure of an economy over which he presides.
Gossip circulating
Following the intervention of the ECCB in the management of NBA and CCB, there have also been rumours, lies and gossip about persons regarding to the reasons for the intervention. It is unfortunate that people perpetuate this type of gossip. We all need to wait to hear from ECCB as to their findings and a proposed way forward for these two banking institutions. Sometimes as individuals we need to step back and ask the question, “If damaging statements were being spread about me all across Anguilla, how would I feel?” To this end, I urge everyone to act responsibly and refrain from spreading gossip. As a politician in Anguilla, I have had my share of this type of gossip.
I have been accused of taking my mother to court, which of course never happened as public records reflect. I was accused of releasing staff from Cable & Wireless Anguilla while I was the General Manager. However, anyone who understands the way a multinational corporation functions will know that decisions to downsize are not taken lightly and are directives from the corporation. In terms of who exits the company locally, this is decided by the manpower requirements and the skill-sets needed for the ongoing operating of the business. Downsizing is done at the department level and sanctioned by the management team. By the way, I am aware that some relatively major staff cuts will soon take effect again at Cable &Wireless Anguilla/LIME. Will the current General Manager Mr. Mark Romney be blamed for that? I hope not and strongly urge all of us to refrain from placing such blame. I am sure that the same redundancy scheme that Mr. George Kentish and I fought the Human Resources Director in London for is still being used to compensate the staff that will be made redundant this time around. However, our governments over the many years have failed workers of corporations like Cable & Wireless/LIME. If the necessary laws which govern fair redundancy payment were put in place many persons would still feel a sense of dignity despite the difficulty of having to move on.
Within the last two months, I also heard some disturbing gossip from a good friend who contacted me expressing an urgent desire to ask me something, albeit, skeptical as to whether or not she should. I urged her on and her question to me was, “Is it true that you had a sexual relationship with your daughter?” She went on to say that she was in the company of some of my political opponents and they were discussing how they are going to use this fabricated story against me. On a separate occasion one of my nephews became enraged about hearing the same story from supporters of the Anguilla United Front and drove to my home and explained the story in disgust. To my mind, this is going way too far, where is the respect. Let me state that not only would I not have a sexual relationship with my daughter,
but I would not have a sexual relationship with anyone’s daughter who is my daughter’s age. My daughter is 26 years of age and by the way she is here with me at this present time. I love her very much as my daughter. Where is the respect for me as her father, not a politician, but as her father? Where is the respect for my daughter? The point is people can be very malicious, often times the things they accuse others of are similar to the things they are guilty of themselves.
The other matter that I promised to raise in this presentation has to do with the resignation of Rev. Dr. H. Clifton Niles from the board of Anglec. I read the letter of resignation and it leaves me disturbed. I don’t intend to delve much into it per se but to speak to the issue of how we got to the place where things can go fundamentally wrong at an institution like Anglec. When the proposal first came out to privatise the electricity department of the Government of Anguilla back in the very early 1990’s, I was vehemently opposed to it. I thought back then that our focus should have been on investing any capital raised for electricity on renewable energy, moving us closer to energy independence but I guess I was 22 years ahead of my time. I felt that a renewable energy company should have been formed that would then sell electricity wholesale to the electricity entity. I further believed and suggested that the electricity department be moved into a statutory body and be run much like the Anguilla Development Board. I recall debating this with Mr. Marcel Fahie live on channel 2 magazine (a television program hosted by Mr. Cuthwin Webster back in 1991). The discussion became quite charged to the point that Mr. Fahie got up and started walking off the set and order had to be restored by the host of the show, Mr. Webster.
What eventually happened, Anglec was born. My concern with the formation of Anglec, was that there was going to be institutional domination of Anglec i.e. large institutions like Social Security, NBA, CCB and a few other relatively large establishments buying up all available shares and dominating the company. During the time of the Initial Public offer(IPO) I used every possible media outlet to encourage Anguilians to buy as many shares they could afford in Anglec. I walked my talk by borrowing money from NBA to buy 100,000 shares. I also encouraged The Anguilla Printers to buy a substantial number of shares. Despite my urging of Anguillians to buy shares in Anglec, my biggest fear was still realized. Today, Anglec’s ownership is dominated by the Government of Anguilla, Social Security, NBA and CCB.

There is no small shareholder representation on the board of Anglec. What has been happening from the inception of the Annual General Meeting for Anglec, the composition of the board is decided in a private meeting before the AGM by the large shareholders. As such what tends to happen all the time is the appointments to the board is done as favours and thank you’s to loyal party supporters. Very little attention is given to the skills required to manage a private sector corporation that should be focussed on delivering value for money to
consumers and a reasonable return and growth to investors. So when the previous government was in power they put their friends and supporters on the board and now we have a new government and they do the same. Let me make it clear that the individuals selected to be on these boards should not be viewed negatively, it speaks to a broken system as highlighted by Rev. Dr. H. Clifton Niles’ letter of resignation.
Not surprisingly supporters of the AUF and their candidates condemn the current appointment of the board members by this administration. What is interesting is that when the AUF was in government persons opposed to that party also condemned their appointments to the board. What a political mess we have created in Anguila. My fellow Anguillians, this is an area that is dare to me after working in corporations for a significant period of my life. There is a need for good governance and business ethics in Anguilla. The standard for appointments to boards in Anguilla must be raised and made non-political. There is a need for a duty of care to protect the interest of all stakeholders and deliver good value to the consumer. What has taken place with Anglec has seemingly taken place on just about every board in Anguilla for years.
Of course, the issues at Anglec could not have occurred without a political attack. Over the past several days I was approached by a number of persons about being the largest shareholder of Anglec. Coincidentally, my son was also approached and asked if he recognised that Mr. Victor Banks mentioning my shares in Anglec was a political attack. Let me again state that I bought these shares in 2003 at the Initial Public Offering using a loan from the NBA. This I am sure can be verified at NBA. I am not sure what Mr. Banks’ motivation was for publicising public information about me, but this is the type of transparency we need more of in Anguilla.
I like transparency, I like business, professional ethics and good governance so I take pride in declaring my corporate interest to the People of Anguilla. It is time that Anguillians and residents of Anguilla receive the level of transparency they deserve from persons who put themselves up as representatives. It is my view that Mr. Banks has started something honourable and I will declare my corporate interest in the vein of transparency. I have shares in Anglec, the National Bank of Anguilla, The Anguilla Printers, Funtastic Adventures(my own corporation), in a company with my siblings, in the St. Kitts Nevis Anguilla Bank and shares in Cable & Wireless Communication. For this disclosure, Mr. Banks is absolutely correct that I should not be vilified or scorned. In a climate where so many of our young people are furthering themselves academically to join corporate Anguilla and some day invest like I did years ago, it would be absurd to vilify or scorn any Anguillian who is patriotic and courageous enough to invest in our development. Furthermore, for me to be vilified or scorned for purchasing shares is to knock any honest, ambitious and hard-working Anguillian.
Therefore, in the vein of openness and transparency it is only fitting that I respond in a like manner to Mr. Banks. Over the years I have had my concerns about Mr. Banks’ corporate and business interest dating back to 1994. As such I will list some of his corporate interests which are in the public domain that causes me some concern and should cause all Anguillians concern:
During the period February 1995 – July 1999 while being the Minister of Finance in the Government of Anguilla Mr. Victor Franklin Banks became a director in twenty-Five(25) corporations registered in Anguilla. As we all know the ministry of finance is the ministry that deals with all financial matters of the country including financial matters involving companies operating on the island. This was during the period when Mr. Hubert Hughes was the Chief Miister of Anguilla.
The twenty-five companies in question are as follows along with the dates when they were formed:
1. Banks professional Services – incorporated 12 April 1996
2. Ramgen International Company – incorporated 13 March 1995
3. ILE REVE CREATION – incorporated 01 January 1997
4. French Caribbean International company incorporated 29 April 1996
5. Amerang Holdings – incorporated 01 January 1997
6. Rohith Holding Company – incorporated 01 January 1997
7. Sunrise International Company – incorporated 15 November 1996
8. Superior Sanitary Supply and Services incorporated 01 January 1997
9. CHEZ CERISE incorporated 01 January 1997
10. La Terrasse incorporated 01 January 1997
11. GRANDS VIN DE FRANCE incorporated 01 January 1997
12. Marvic Realty incorporated 21 February 1995
13. Caribbean Marine Services – incorporated 30 October 1996
14. Joseph Mcgregor Holding Comapny incorporated 01 January 1997
15. M4S Comapny – incorporated 06 February 1996
16. Redline – incorporated 30 October 1996
17. Biotex – incorporated 20 February 1997
18. Stelligan NV – incorporated 05 March 1998
19. Investments Animation – incorporated 07 May 1998
20. Tomahawks – incorporated 07 May 1998
21. Sirius Estate and Services – incorporated 09 December 1998
22. C com international – incorporated 12 January 1999
23. Techno Process Design and Consulting incorporated 12 January 1999
24. Transport Arts Graphiques – incorporated 18 June 1999
25. Planet Consultant – incorporated 07 July 1999
During the period 2000 – 2005 while Mr. Victor Banks was the Minister of Finance under Chief Minister Mr. Osbourne Fleming he was also a director of an additional nine (9) companies, namely:
1. Tradewinds Development Corporation incorporated 08 June 2000
2. Treasure Bonanza – incorporated 02 January 2002
3. Coralee management Services – incorporated 04 July 2002
4. Mosiac Incorporated – incorporated 09 December 2004
5. Indigo Innovative Design – incorporated 16 March 2000
6. Portakal – incorporated 11 December 2000
7. Web E Concept – incorporated 05 June 2001
8. Camelote Holding Company – incorporated 14 March 2002
9. Nasa – incorporated 06 August 2002
In addition, to Mr. Victor Banks holding directorship in the above mentioned 34 companies from February 1995 – December 2004 he was also a shareholder in many of these companies, he held shares in at least two(2) additional companies where he was not a director, namely:
Freemasons Association of Anguilla and Arista Food International
It is important for everyone to know that this information is available for anyone at the company registry in The Valley as it is public information and you the public have a right to know. I trust that Mr. Victor Banks will not be vilified or scorned for these stated facts.
Without a doubt these findings highlight a major conflict of interest on the part of Mr. Victor Banks. I have discussed this with a number of senior professionals both here in Anguilla and in the United Kingdom and they all saw this as a major conflict of interest. In the United Kingdom someone engaging in this type of behaviour would either be dismissed from government or they would resign immediately. Why do we tolerate this in Anguilla? Why does the British Government who is responsible for good governance on Anguilla allow it? Why did the political party of which he was a member allow it? Why is his current political party of which he is the leader allowing it? It is impossible for anyone to serve without bias the people of Anguilla and have interests and hold directorship in so many companies. Anguilla deserves better than this, the people of Anguilla deserve better than this. The youth of Anguilla deserve better than this.
If we are to be successful as a nation, our leaders must have business and professional ethics, must ensure that there is good and effective governance. Our children deserve to have a
bright future, it is not about some of us, it is about all of us as Anguillians and residents of Anguilla. The people of Anguilla must be first!
As I think back on the person who approached my son about Mr. Bank’s mentioning of me in his address, I believe now that my son’s response was most fitting when he replied “he who comes to equity must come with clean hands”.

May God bless us as we position ourselves to lead Anguilla during these challenging times.

(Published without editing by The Anguillian newspaper.)

By anguillian September 13, 2013 08:46


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