Antigua & Barbuda PM Threatens Compulsory Acquisition of Scotiabank Antigua

Compulsory acquisition is one of the measures being considered by Antigua and Barbuda’s Prime Minister, Gaston Browne, as he continues to demand that the owners of Scotiabank revisit the sale of the Antigua branch to Republic Financial Holdings Limited of Trinidad and Tobago.

His latest threat, made on January 5 on his radio station, Pointe FM, came days before a planned meeting between him and officials from the two banking institutions and about a month after he threatened not to sign a vesting order, which he maintains is required to concretize the sale.

“We are using that vesting order to literally negotiate a position in which the local entities should be given a first preference. And, as I said earlier, we also have the option of compulsory acquisition if they choose to fight us,” the PM said.

He said he hopes that it does not come down to that, and that the institutions accept the proposals he plans to put forward during the meeting, which was scheduled for last Wednesday but was postponed.

The prime minister had written to the banks’ officials on December 13, 2018, asking for a meeting on January 7 this year and he requested to include representatives “of a consortium, comprising the Government and local banks and institutions.”

While the banks had reportedly agreed to meet with the Prime Minister on January 9 instead, a statement from his office on January 4 indicated that Scotiabank said that “based on the contractual agreement between Scotiabank and Republic Financial Holdings, it may not be appropriate to hold a meeting with other potential buyers/financial institutions.”

Browne said if Scotiabank Antigua is sold to a local entity, there will be more benefits for the country: “Our indigenous banks need to get larger and if we can get the Scotia assets, let’s say for example, if you can consolidate the Scotia assets with maybe ACB (Antigua Commercial Bank), then ACB will become more bankable in terms of correspondent banking…

“So in terms of national interest, there are many benefits to the country and I believe that we can make the arguments that we can compulsorily acquire the branch here in the public interest,” he said.

Browne pledged that if the government acquires the bank, its owners will get their fair payment for it.

“That is an option that we would have to discuss with them because they must understand that they can’t run roughshod over us because they can’t do that to the government of Canada. My dear friend Justin Trudeau would not allow them to do that,” he added.

In November 2018, Scotiabank announced the sale of its branches in nine Caribbean territories, to include Antigua and Barbuda.

From the onset, the prime minister threatened not to support the sale unless all other options he has in mind are considered.

On January 5, he defended his position, adding that his government is not “socialistic” or “communistic”.

“We are just a practical government that is taking the necessary decisions to protect the interest of the state and to make sure that we have an economic model that works for us and a model that repatriates most of the profits that are generated   in the country,” he contended.

Meanwhile, the high-level meeting between Browne and officials from Scotiabank has been pushed back to an undisclosed later date.

Both parties were expected to meet last week to discuss the purchase of the bank’s assets in Antigua and Barbuda. But according to Information Minister, Melford Nicholas, that meeting did not take place as scheduled and the date is still pending.

Speaking during last Thursday’s post-Cabinet press briefing, Nicholas gave the reasoning behind the postponement.

“It’s just a question of scheduling and getting all of the right participants who would wish to be here, the important persons to be here.

“I believe that Scotiabank indicated that they are prepared to meet with the government on a one-and-one basis, and they have indicated that they have already been in commercial agreement with Republic Bank, and so it would not be in their best interest to enter another third-party talk having regard to those particular agreements,” he said.

Nicholas added: “I think the stage we are at is trying to get an alignment between the objective of the government and Scotiabank, and I think we are going to have to give it some time for that meeting to take place. I wouldn’t want to speculate any potential outcome at this particular point in time, but only to say that the government is clear in its undertaking and in its objective of what it wants to achieve. But, at the end of the day, I think good judgement will prevail. We will be in a position to pursue this matter along the lines that we have outlined.”

But while Scotia may have had a change of heart about meeting the Prime Minister at this time – if at all – the bank’s management has committed to holding talks soon with its employees bargaining agent, the Antigua and Barbuda Workers Union (ABWU).

According to the union’s long-serving General Secretary, David Massiah, that meeting will take place on January 14.

“Our meeting, clearly, is to begin to hear from the bank all that is basically involved in the situation; what is going to happen, going forward, if there is going to be any such situation with Republic (Bank of Trinidad and Tobago),” Massiah stated.

It is not known if Scotiabank’s planned meeting with the Antigua and Barbuda Workers Union will have any effect on the previously mooted talks with Prime Minister Browne.