Prime minister threatens compulsory acquisition of Scotiabank Antigua

Prime Minister Gaston Browne (File photo)

Compulsory acquisition is one of the measures being considered by the 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 Saturday on his radio station, Pointe FM, comes days before a planned meeting between him and officials from the two banking institutions.

And, it comes about a month after he threatened not to sign a vesting order, which he maintains is required to concretise 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, likely to take place on Wednesday.

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 have reportedly agreed to meet with the Prime Minister on January 9 instead, a statement from his office on Friday 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.”

The prime minister 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.

PM 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 Saturday, he defended his position, while 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.