…CEO insists company can withstand complete loss to Stanford Investment
By Gary Eleazar
In light of the impairment of a $822M Hand-in-Hand Trust Corporation (HIHTC) deposit as a result of the recent freezing of assets of the Stanford Bank in Antigua, the company is ever more vigilantly monitoring the additional $5B in investments throughout the Caribbean Community (Caricom).
This is according to Chief Executive Officer, Keith Evelyn, of Hand in Hand Insurance Company, yesterday.
During a media briefing yesterday, he sought to debunk claims by Consumer Advocate Raymond Gaskin that in light of the impairment of the money exposed to Stanford Antigua, his entity was bankrupt.
According to Evelyn, he was unsure of the computation Gaskin used to arrive at that assertion but according to the latest balance sheet available to the company, Hand in Hand was very solvent in that it had some $9B in assets as compared to liabilities which was marginally below the below the $8B mark.
According to the CEO, the company was also very liquid in that it could pay its debts if called upon.
Evelyn sought to point out that the statements made by Gaskin were potentially damaging, not only to the health of Hand in Hand but also to the economy as a whole.
Such an appeal to publicise what he called the “untrue nature of the damaging, slanderous and mischievous statement” was dangerous.
The CEO pointed out that the Consumer Advocate had taken the shareholder’s equity position of the Hand in Hand as at June 2007, which stood at $895 million, “and deducted from this the sum of over $1 billion which he claims is lost to Stanford….From this he has arrived at the conclusion that Hand in Hand is bankrupt or insolvent….You could not get poorer accounting.”
According to Evelyn, the shareholder’s side of the balance sheet at 2007 could not possibly be the measure of a company’s solvency in that solvency tests whether the company has the assets to back its liabilities.
The CEO stressed in his press briefing that the investment in the Stanford Bank was less than 10 per cent of the total assets of Hand in Hand.
He also commented on an earlier report that two of the pension funds under its management were similarly affected.
Evelyn pointed out that under the rules of the trusteeships, Hand in Hand was not liable for the investments made by the pension schemes under its trusteeship.
He did say, however, that it is not anticipated that the Stanford investment will be entirely lost and we will have to wait and see what the regulators in Antigua find.
“But in the meantime we have to treat it as a loss.”
Evelyn added that were the monies to be completely lost, the company would still be in a safe position and would just have to inject additional capital in the Company possibly from the sale of some assets such as buildings.
“We wish to assure you and the public that any impairment of its investments in Stanford Bank would not affect the solvency or operations of the Hand in Hand.
“We are confident that Hand in Hand is fully capable of withstanding any possible loss of its investments in Stanford (SIB).”
The CEO said that Hand-in-Hand Group of Companies was not exposed to the Stanford debacle given that Hand in Hand Trust Company was a separate legal entity.
As it relates to the question of whether the investment in the Stanford Bank in Antigua was seemingly too good to be true, the CEO pointed out that this was not the case in that the seven per cent interest rate was not extraordinary.
He added that prior to the seizure of the assets of the bank in Antigua, that group had always faithfully paid each year and there was no reason to suspect anything untoward.
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