By Hayden Boyce SUN Publisher & Editor-in-Chief

The High Court Judge who wound up TCI Bank, said he did so with “great sadness and regret”.
Mr. Justice Richard Williams, in delivering his ruling in the Supreme Court in Providenciales on October 29, said, among other things: “Most regretfully, on the material before me and in the circumstances of these protracted winding up proceedings, I feel that a further adjournment is not appropriate. There have already been ten adjournments and costs of the liquidation are increasing daily. The time has come for certainty. I make this decision with a heavy heart, understanding how it may affect the creditors and community as whole and Mr. (Wendell) Swann's wise caution has been at the forefront of my mind throughout.”
Mr. Anthony Kikavarkis and Mark E Munnings of Deloitte & Touche, in Nassau, The Bahamas, were appointed as joint liquidators for TCI Bank Ltd.
In his ruling, Judge Williams said the Provisional Liquidators had expressed in their conclusions on page 24 of their "Analysis of Rescue Proposals" dated July 13, 2010 that "The proposal more in line with our requirements is that presented by ECIC Holdings Limited (The Investor Banks) who are prepared to inject permanent cash equity of $12.5million for the continued operation of the Bank."
On 13th August 2010 the Bank, he said, pursuant to Section 84 Companies Ordinance, filed an originating summons for leave to convene meetings to consider the scheme of arrangements proposed to be made between the company and its creditors and with the company and the shareholders of the company.
Williams said the scheme of arrangements were exhibited at `NH4' to the affidavit of Norman Hamilton dated 13th August, 2010. That scheme of arrangements involved investors, ECIC Holdings Limited, backed by St Kitts Nevis Anguilla International Bank and National Bank of Dominica Ltd ("the EC Banks") taking over the Bank.
He noted: “Meetings were held, and 97.85% of the shareholders and 99.98% of the creditors in value, voted in favour of the scheme of arrangements. It then appeared that, at last, there was some positive news and a real hope that the Bank could be rescued. All parties were striving to put the proposed arrangement in place. Sadly, at the hearing on 9th September 2010, it became apparent that the FSC was understandably unable to endorse the offer or scheme of arrangements. The $12.5 million had not been placed escrow in this jurisdiction. This had been a key requirement of the FSC, as well as of the Provisional Liquidators for rescue, as set out at page 11 of the latters' "Analysis of Rescue Proposals" dated July 13, 2010.
There were further serious concerns about whether the EC Banks had the necessary internal approvals and external regulatory approvals. At the hearing on 22nd September 2010, it was evident that the proposed scheme, in that form, could not proceed, as the Banks were unable to obtain regulatory sign off by their regulator, the Eastern Caribbean Central Bank, confirming that they were approving the offer.”
According to judge Williams, the FSC submitted that, from their monitoring of the Bank, they had concluded that it was carrying on business and was likely to remain carrying on business in a manner that was detrimental to the public interest and to its customers and creditors: In support of this contention, Judge Williams said, the FSC highlighted at that hearing that they believed:
1. That 5 members of Board of Directors had credit facilities in accounts that were not clearly identified as related party accounts. The FSC stated that the Company could not confirm whether in all instances the Board had been made aware of, or approved, these loans, which was a breach of the Company's policies and procedures. As of June 30, 2009 the total balance of those loans was $3,842,494.21 and the FSC was of the belief that this amount would not have decreased and was likely to have increased.
2. That the Company was not following its own provisioning policy and had not rectified the position since the FSC Report from September 2009.
3. That the Company continued to fail to obtain certificates of good standing from all corporate customers on an annual basis — the Bank failed to address all of the issues relating to personal loans including not holding evidence of current life assurance, and not reviewing accounts.
4. That the Company's administration of credit was critically weak. Including no standard checklists in files, no annual reviews in files, no evidence of review of follow-up work, were missing documentation and unsigned documents on files, were unassigned insurance policies and also numerous instances where overdraft accounts had exceeded authorised limits without evidence of approval.
Posted Nov 9th 2010