Capbank depositors should soon expect their long awaited cheques as promised by the ruling New National Party (NNP) administration of Prime Minister, Dr. Keith Mitchell.
In his delivery of the 2014 Budget of Revenue and Expenditure last week Tuesday, Prime Minister Mitchell in his capacity as Minister for Finance, informed Parliament that cheques totaling just under $500,000 will soon be ready for distribution.
“An announcement on the payment dates will be made in due course. By helping depositors with $500 or less, Government is taking care of 4,102 depositors or 80% of the total number of depositors of Capital Bank,” he said.
Before the NNP was booted out of office in 2008, the party had stated publicly that it would take steps to pay the depositors of the bank, which was placed, by the court into Receivership.
Within days of returning to power following general elections in February, Prime Minister Mitchell presented a holding budget in April and promised
depositors that his administration will assist them in getting back their deposits of $500.00 or less.
Depositors were initially led to believe that their complete savings of $500 or less will be returned to them, however minutes from the April 9, 2013 Standing Committee on Finance revealed otherwise.
“Honourable Tobias Clement asked for clarification on relief for the small depositors at Capital Bank. He inquired whether the monies were to pay depositors under five hundred ($500) eighty percent (80%) of their deposit. The Chairman (Dr. Keith Mitchell) replied in the affirmative”, the report stated.
According to the report, “The Permanent Secretary, Ministry of Finance (Timothy Antoine) further explained that the total depositors at the time the bank was intervene was just over 5000 and the number of depositors that had a savings account of five hundred (500) or less was just around four thousand (4000), so therefore they would recover eighty percent (80%) of their deposit.”
The Standing Committee report disclosed that the Mitchell government initially estimated that $1.6 million was needed to pay small depositors, however additional work discovered that only $500,000.00 was needed.
Government revealed that it would make provisions for the payments to be made in the 2013 Budget of Revenue and Expenditure.
However, it did not materialise and is again budgeted for in fiscal 2014.
Dr. Mitchell told Parliament last week Tuesday, he believes that the demise of Capital Bank International is deeply unfortunate and has brought untold hardship to depositors and creditors.
Controversy plagued CapBank headed by Grenadian Businessman Finton DeBourg since its establishment in 1988. De Bourg is a former General Secretary of Mitchell’s NNP.
During the 1990-95 rule of the island by the National Democratic Congress (NDC) government of Sir Nicholas Brathwaite, the administration refused to grant a license for CapBank to operate based on advice given by the Eastern Caribbean Central Bank (ECCB).
Unfortunately, Dr. Mitchell’s regime when it came into office in June 1995 granted the license to the Bank and the ECCB responded by refusing to allow the controversial local bank to use its Clearing House facility.
Capbank resorted in many instances to using the bank account associated with former Governor-General, Sir Daniel Williams, to facilitate its financial transactions.
Capbank eventually ran into problems and depositors started to complain of not being able to make withdrawal of their funds.
Attorney-at-law, Anselm Clouden filed court action against the bank in connection with a one million EC dollar deposit of one of his clients.
In the face of mounting public pressure, the Mitchell government was forced to step in and appoint a Receiver in February 2008 to take charge of the affairs of the bank from De Bourg who was serving as its Chief Executive Officer (CEO).
De Bourg was subsequently slapped with four counts of fraudulent breach of trust for allegedly converting $18,227,902.60 of money entrusted to CapBank to himself.
He was placed on one million dollars bail. The matter is still pending at the level of the local high court.
While Budget 2014 bought “positive news” for Capbank depositors, it was disappointing news for road workers involved in debushing as the NNP administration informed them that it will not be able to live up to its promise to return the $10 per day that was cut from the salaries by the former Congress government.
“Mr. Speaker, it may be recalled that our Government promised to restore the $10 per day that was cut from the salaries of our road workers under the Road Maintenance Programme by the NDC Administration.
“Our Government regrets that it has not yet been able to restore the $10. However, cognizant of the grave fiscal situation; Government’s obligation to pay a total of $40 million in retroactive payments to public officers in 2013 and 2014; and the general need for wage restraint; our Government decided to defer that increase for the time being”, Dr Mitchell informed the nation.
Some of the persons involved in the debushing programme are believed to be upset and charged that while the new administration choose not to pay them, it however made move to increase the salaries of ministers by 6% since the February poll.
The NNP government backed away from the 6% increase in the face of widespread condemnation from the public in light of calls on Grenadians from the new rulers to make “sacrifices” in the face of a financial and economic crisis facing the country.