TCI Bank must liquidate - fp Turks and Caicos

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04 LOCAL
November 4, 2010 _________________________________________________________________________________________________________ www.fptci.com
Government explains suspension of travel letters
The government issued the
following press release Nov. 3 explaining
the indefinite suspension
of travel letters on Oct. 28.
“The Ministry of Border Control
and Labour wishes to inform
the public that travel letters have
been suspended because of serious
concerns about fraud, forgery
and abuse, which threatened
the good order and security of
the islands.
“Under TCI laws, no one needs
a travel letter to enter the islands.
People from countries which do
not need a visa, and who are
seeking to work or reside in the
TCI, simply need a work permit
or resident permit. People from
countries which need a visa
Supreme Court orders liquidation of TCI Bank
BANK from page 1
with new investors to put additional
capital into the bank
in order to put it back on solid
footing.
FSC Managing Director
Kevin Higgins told the fp those
discussions had been going on
for some time, and that it was
the responsibility of the commission
to take the aggressive
action in order to prevent a run
on the bank, risking further depositor
funds.
The five-year-old institution
had been suffering for nearly
two years from mounting unpaid
loans, which prompted the
FSC to shut the bank April 9 to
protect the remaining assets of
shareholders and depositors.
The National Insurance
Board, both a shareholder and
depositor, had given the bank
a $5.5 million secured loan less
than four months before the
closure. However, the money
was quickly withdrawn by
three large depositors just days
later, causing the bank further
hardship.
The government has asked
the FSC to conduct a review
of the their oversight of TCI
Bank and the circumstances
that lead to the application for
a court order to place the bank
in to provisional liquidation.
The review, which is being conducted
at board level, is nearing
completion and will be submitted
to the governor shortly, according
to Capes.
Just one day after the provisional
closure of the bank, the
governor announced his intention
to fast track the introduction
of a depositor protection
scheme in the TCI. The Bankers
Association immediately
said it was opposed to a hastily
designed scheme and offered
alternatives that would do more
to protect depositors.
Capes said constructive discussions
have been ongoing
with the banking community
on depositor protection and improving
the regulatory framework
for banks in the territory.
He said those discussion will
continue with the banks with
“a view to reaching a conclusion
that meets the requirements of
investors and depositors and
enhances the reputation of, and
confidence in, the TCI.”
Discussions have included
seeking an independent assessment
of options for establishing
the most appropriate
safeguards for depositors and
ensuring that the supervisory
framework for banks in the
TCI is fit for purpose and meets
international standards, Capes
explained.
“Although negotiations are
still ongoing, I am pleased to
confirm that the International
Monetary Fund has agreed to
provide technical assistance
early next year,” he said.
Property taxes
called unlikely
What the court-ordered liquidation means for depositors
PROCESS from page 1
a charge against the bank for the
total amount. Fees to the liquidators
are the next item on the list,
along with any expenses they
incurred, including legal fees
to their local attorney, Clayton
Greene.
Bank depositors would then all
be treated the same and begin to
receive equal percentage shares
of any money that is collected
or recovered by the sale of assets
by liquidators. Full liquidations
should obtain a visa, either from
the Immigration Department or
from a British Embassy or High
Commission overseas. The list
of countries which do not need
a visa is on www.immigration.
tc under Permits, Requirements,
Forms, “Visa Requirements.”
“Please note that visas have
not been suspended. Immigration
Department staff and the
airlines were instructed on Sunday,
Oct. 31, that employment
visas which had been issued in
the form of a letter prior to the
suspension should be honoured,
and the person concerned allowed
to enter the islands.
Visas should now be issued
in the form of endorsements in
By Paul Coleman
IBG Vice President of Compliance
can take anywhere from two to
10 years, Kikivarakis said.
The Financial Services Commission
said it closed the fiveyear-old
bank because of mounting
unpaid loans and an abrupt
$4 million withdrawal of funds
by three large, unidentified customers.
Kikivarakis said in the case
of a liquidation, all depositors
would have to file an official
claim, which would represent
the amount owed to them. Over
time as enough funds could
passports.
“There has also been a practice
of obtaining a travel letter when
someone has to travel while their
work permit application is pending.
This was introduced at a
time when work permits were
taking an extremely long time to
process. This is no longer generally
the case. The Immigration
Board meets twice a month and,
once Labour Clearance has been
obtained and an application with
all the necessary documents has
been lodged, it will normally be
considered by the Board within
the following month.
“Our strong advice to employers
is to ensure that applications
are lodged at least three months
In our everyday lives and in
so many ways we are likely
to experience an opportunist
who tries to deceive us and take
our hard-earned money.
Deceit and fraud is much more
subtle than a straightforward robbery
and so much harder to detect.
The party involved is likely to appear
very genuine and in many cases will
befriend us, encouraging us to drop
our natural guard when meeting
strangers.
This developing interaction with a
fraudster may build up over a period
of months without you realizing
that the person has other reasons
for befriending you. Fraudsters
can be very patient if they believe
the “prize” is worthwhile.
So what can we do? There are
be collected, he said a request
would be made to the judge to
make payouts to the creditors.
This could happen on several
occasions over years.
Most of the bank’s assets are
tied up in real estate loans. In the
current market, selling those assets
isn’t going to be easy, Kikivarakis
said, and it would be best if
they could wait for prices to improve
in order to get the depositors
the most money back. However,
that may take several years.
Since moving into provisional
before the worker is needed, or
three months before expiry of an
existing permit.
“If there is a genuine need for
urgent consideration of a work
permit application, this can be
drawn to the Board Secretary’s
attention so that the Board’s
consideration can be expedited;
or in exceptional circumstances
a Temporary Work Permit can
be issued under Section 11 of the
Immigration Ordinance by the
Director of Immigration.
“The Ministry is also looking
urgently at an alternative, secure
format for a document to confirm
that an application is pending,
for people who genuinely
have an urgent and unavoidable
How to protect yourself from fraud
a number of strategies you can put in
place and think about.
Remember: If it sounds too good to
be true, then it probably is too good to
be true.
Be wary of:
▶▶ Pressure on you to act “right away.”
▶▶ Guarantees of success. No investment
scheme is 100 percent certain.
▶▶ Promises of high returns.
▶▶ Any scheme that requires an upfront
investment — even if it is a “free
prize.”
▶▶ A buyer who wants to overpay you
for an item and have you send them the
difference.
▶▶ Anything that does not have the
look of a real business.
▶▶ Something that just doesn’t feel
right.
Other strategies you should follow:
▶▶ Never click on a link inside an e-
mail to visit a website. Type the address
into your browser instead.
liquidation, all assets of the bank
have been frozen, including all
customers deposits. All cash
has been moved out of the local
branch to other banks on island,
and all incoming payments have
been deposited into those accounts.
When a shareholder asked at
the July meeting when he might
see his money again, Kikivarakis
suggested it was highly unlikely.
Shareholders come last
in the case of liquidation, he
said. This means shareholders
fp
need to travel while their application
is under consideration. In
the meantime, the instruction
which was issued on Sunday,
Oct. 31, confirmed that travel
letters issued for this purpose
before the suspension should
also be honoured.
“The Ministry is committed to
wholesale reform to ensure that
the TCI’s immigration system
works effectively in the interests
of the travelling public, the economic
well-being of the islands,
the good order and security of
the islands, and global security.
We welcome all feedback and
constructive comments from
across the community to help us
with this.”
▶▶ Shred confidential documents instead
of simply discarding them in the
trash.
▶▶ Your bank will never e-mail you or
call you for your personal information
or passwords.
▶▶ Don’t wire money to people you
don’t know.
▶▶ Be cautious of job-at-home offers.
▶▶ Check your bank statements
regularly for transactions you do not
recognise.
Paul Coleman, vice
president of compliance
at International
Banking Group, has
more than 40 years experience
in the banking
industry. He is a professionally
qualified expert
in Operational and Business Risk, Internal
Audit, Anti Money Laundering and
Regulatory Compliance.
Taxes from page 1
the poor, and for small businesses
unable to keep proper records.
“It’s simple, it’s efficient and it
would … tend to collect significant
amounts of money from the tourist
industry and tourists in particular,
rather than the locals,” Hartley said.
Roe’s report says the current system
of taxation targets hotels and
restaurants, financial services and
real estate, which account for 52.3
percent of the GDP. VAT could collect
more taxes indirectly from
construction, transportation and
communication, utilities, wholesale
and retail trade, manufacturing and
mining, and business services other
than real estate.
would receive funds only if 100
percent of all depositors funds
were returned. Given the state
of the banks assets and amount
of non-performing loans on the
books — around 40 percent —
depositors can expect to see only
a small share of their funds returned,
leaving nothing for current
shareholders.
Customers and shareholders
affected by the closure can contact
the liquidators at info@tcibpliquidation.com
or visit the Web
site www.tcibpliquidation.com.