Jagdeo: `The Government of Guyana wishes to assure the public that, unlike in some developed countries, steps will be taken to protect the pensions of those who have saved and invested in the institutions affected by these recent events’
The Hand-in-Hand Trust Corporation has a total current exposure to the Stanford group of $827 million (US$4 million), in addition to $297 million (US $1.5 million) invested on behalf of pension funds, President Bharrat Jagdeo revealed yesterday.
This direct exposure represents nine percent of the total assets of the Trust Corporation, Jagdeo stated during his press briefing yesterday at the Office of the President.
Jagdeo described the corporation as “a strong financial institution” and revealed that it had a capital adequacy ratio of 26.9 percent as at the end of January 2009. He said “that since the seizure of the Stanford Investment Bank the management of the corporation has been proactive in putting together a strategy for mitigating any potential losses and ensuring that depositors’ funds are protected.” This strategy has been submitted to the Central Bank for its study and approval and explained that this bank is currently examining the proposal to see if it meets the demand of depositor protection.
In the last Sunday Stabroek an advertisement was carried in which the Chief Executive Officer of the Hand-in-Hand Group of Companies, Keith Evelyn confirmed that the firm had investments in the Antigua-based Stanford International Bank (SIB) but stated that these were not substantial.
According to that advertisement, the investment company has an exposure to the SIB in the form of Certificate of Deposit (CD) investments. Two of the pension plans under its trusteeship are also exposed. The investment in SIB is less than 10 percent of the assets of the local investment company, the advertisement stated.
Hand-in-Hand added that any “impairment of its investments in Stanford Investment Bank” would not affect its operations. It said it has already implemented measures to mitigate any possible losses and was pursuing every effort to recover its investment in SIB. These efforts include communication with the regulatory authorities in Antigua and the retention of the services of a Miami-based legal firm.
Meanwhile during the press conference, the President emphasized that “the Hand-in-Hand Trust Corporation is a completely separate legal entity from the Hand-in-Hand Insurance companies which have no exposure to these developments.”
The President stated that the total exposure of Guyana’s financial system to CLICO and Stanford groups amount to US$41M, which represents three percent of the total assets of the financial sector and does not pose a systemic threat.
He also said “The Government of Guyana wishes to assure the public that, unlike in some developed countries, steps will be taken to protect the pensions of those who have saved and invested in the institutions affected by these recent events.”