Prime Minister and Minister of Finance, Dr. Terrance Drew, has confirmed that the legal case against the former head of the Development Bank of St. Kitts and Nevis has officially commenced. The case centres around allegations of fraudulent activities and the misappropriation of funds during the former management’s tenure.
Dr. Drew made the announcement on the Freedom FM radio programme Issues, where he discussed the challenges inherited from previous management of the bank and outlined his administration’s actions to restore it to financial stability.
Dr. Drew shed light on the significant financial issues left by the previous leadership, detailing how hidden debts and financial discrepancies had pushed the bank to the brink of collapse. Forensic accountants from Canada were engaged to audit the bank, revealing a complex scheme to conceal funds and other irregularities, resulting in a debt exceeding $300 million. The prime minister stressed that his government is committed to uncovering the full extent of these financial issues.
One of the primary concerns was the impact on the Social Security Board and the Sugar Industry Diversification Fund (SIDF), both of which had extended substantial loans to the bank. By the time Dr. Drew’s administration took action, payments to Social Security had been delayed for several months.
“We had to intervene to restart the payments. The last payment made by the bank was in January 2022, and it was only a small sum of $200,000.00, when they were supposed to be paying over $600,000.00. Between January 2022 and September 2022, not a single dollar was paid to Social Security on behalf of the Development Bank for the large sums it had borrowed,” Dr. Drew explained.
The statutory status of the Development Bank allowed it to operate with less public scrutiny, making it easier for previous management to obscure financial activities. Government funds were transferred without clear documentation of their use, and audits were suspended under previous leadership. Dr. Drew pointed out that the Development Bank was the only bank in St. Kitts and Nevis to stop all audits during and before the COVID-19 pandemic.
Dr. Drew also highlighted the systemic risk posed by the Development Bank’s debt, particularly to Social Security, which loaned over $100 million to the bank. This loan represented between as much as 10 percent of Social Security’s total assets, a potentially devastating amount if left unpaid.
To mitigate these risks, Dr. Drew’s administration injected millions of dollars into the Development Bank, helping to stabilise its finances, resume payments to Social Security, and protect national financial stability.
“We made the decision to inject millions of dollars into the Development Bank, ensuring that it could stabilise its operations and repay Social Security,” the prime minister said.
Since then, full payments have resumed, with a lump sum of approximately $14 million paid to Social Security to cover outstanding dues. This intervention has strengthened both the financial position of Social Security and the Development Bank, helping to restore stability, according to Dr. Drew.
The prime minister warned that further details in the ongoing case against the former bank head could be “startling,” particularly with regard to the deliberate methods used to conceal funds. However, he emphasised that the government’s approach is one of transparency and accountability, not retribution.
“This government is not engaging in witch-hunting. We are a civilised nation and a democratic country, but transparency must be practiced, and the consequences will follow,” Dr. Drew stated.
Dr. Drew expressed gratitude to the staff at Social Security, the Development Bank, and other institutions involved in stabilising these key national bodies. He commended the dedication of Social Security’s board and the management of the Development Bank for their work towards sustainable recovery. He also highlighted achievements under his administration, including an increase in Social Security contributions and a surplus of over $30 million.
Prime Minister Drew stressed that, with over 40 years of operation, Social Security must undergo structural adjustments to ensure its long-term viability. He reiterated his government’s commitment to safeguarding national financial institutions and helping the Development Bank maintain financial resilience.
Dr. Drew concluded by urging the public to understand the necessity of these actions, which were taken to prevent a potential crisis.
“In politics, if someone doesn’t feel it, they don’t think it happened, but we could not afford to take the risk. I’m speaking out so the people understand the serious risks we were facing as a country,” he said.
The ongoing case is expected to reveal more details about the former management’s practices at the Development Bank, with Dr. Drew affirming his government’s dedication to uncovering the full truth.
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