Procedural defect in Grenada could cost millions of dollars
ST GEORGE’S, Grenada
FAILURE to follow due process in the appointment of a receiver for a local bank in Grenada in 2008, may cost the government millions as the High Court has ruled that the appointment of the receiver in April of that year was illegal.
Capital Bank International, owned by businessman Finton De Bourg, was forced into liquidation when it became apparent that it was unable to pay out money to its depositors.
A report from the Eastern Caribbean Central Bank also stated that De Bourg should not have been given a licence to operate since his application didn’t meet the criteria of the region’s financial governing body.
Last month the OECS (Organisation of Eastern Caribbean States) Court of Appeal ruled that the decision to appoint a receiver for the bank was premature and that the government should pay Mr. De Bourg costs for the appeal.
Attorney General Cajeton Hood, who was also De Bourg’s lawyer in the matter, said the appointment of the receiver was a “procedural defect”.
He said it is too soon to say how much money the government would have to pay to De Bourg, adding that an affidavit of evidence must be presented to the court by the bank followed by cross-examination.
“The bank would then have to present affidavit evidence of their losses and secure the services of an expert who would assist them to establish what, if any losses were sustained by the appointment of the receiver.It is an exhaustive process including cross-examination. It’s a test,” said Attorney General, Cajeton Hood.
Meanwhile Legal Affairs Minister, Elvin Nimrod, said a decision is yet to be made as to whether the government would appeal the Court’s decision.
He said, “They will give consideration to anything that would bring closure to this matter.”
“We are yet to decide whether or not the government should take the other step and go to the Privy Council, but over the course of time I’m sure a decision would be made as to whether or not it makes sense to appeal this decision from the court of appeal,” Nimrod said.
— CMC
