PORT OF SPAIN, Trinidad (CMC) – The Trinidad and Tobago government has dismissed as an “irresponsible outburst“ remarks by opposition legislator, Wade Mark, calling for an investigation into the decision by the state-owned First Citizens Bank (FCB) to provide a US$45 million loan to Cornerstone Financial Holdings Ltd, a privately held Jamaican company.

Mark, a former speaker of the parliament and now the Leader of the Opposition Business, cited extensively a March 20, 2022, Sunday Express article on the financial transaction.

“We need an investigation into this matter: how can First Citizens take our money and invest our money in an institution that is offshore, that is not known to the world… That is a criminal act that has taken place,” he said.

“It is important to note that Cornerstone Financial Holdings, which is an offshore company whose directors are nameless and faceless; there’s no transparency and accountability involved in this company,” Mark added, describing the company is a “fly by night” one, as its shareholders are also unknown,” he said, telling legislators that an estimated TT$500 million (One TT dollar=US$0.16 cents) of FCB’s depositors’ money has gone into this company.

Mark said he has his savings at First Citizens and has been banking there for over 30 years and he wants to protect his deposit and that of the hundreds of thousands of other people.

“You know what is the share equity of this company? In 2019, the equivalent of US$5,034 and in 2020 it was US$6,534. How can you have our First Citizens Bank investing in such a company whose shareholdings and equity is so low on their balance sheets?” he asked.

But in a statement, Finance Minister Colm Imbert described Mark’s presentation to the Senate as an “irresponsible outburst, which was obviously intended to harm the reputation of both companies”.

He said Mark had “alleged, without a shred of evidence, other than regurgitating unfounded insinuations in the newspapers, that FCB had invested hundreds of millions of dollars in what he described as an unknown over-leveraged fly-by-night company, involved in a Ponzi scheme”.

Imbert said that Mark had even gone further “to claim that FCB’s investment in Cornerstone was a criminal act.

“A simple Internet search will reveal that Cornerstone is the majority shareholder of Barita Investments Limited (Barita), a 45-year-old financial company that is listed on the Jamaica Stock Exchange,” Imbert said.

“Barita’s publicly available 2021 Annual Report indicates that at the end of 2021, Barita had assets of J$90B or US$600M. A simple Internet search will also reveal that as of July 2022 Barita is one of the Top 5 largest companies listed on the Jamaica Stock Exchange (JSE) with a market capitalization of J$106B or US$709M.

“Barita’s 2021 Annual Report also gives significant details on the executive management and organisational structure of Cornerstone,” the Finance Minister said, adding that “it is also a matter of public record, published in Barita’s 2021 Annual Report, that Cornerstone owns 74 per cent of Barita, which asset is currently valued at US$525 million.

“Cornerstone is hardly a fly-by-night company, therefore, but in his reckless diatribe…Senator Mark gave the wholly false impression that Cornerstone was a shell company with little or no assets and he attempted to convince his listeners that FCB was about to lose its entire investment in Cornerstone and Barita.”

Imbert said that the truth is that FCB’s 7.4 per cent shareholding in Barita is currently worth J$7.91 billion or US$52.73 million and that FCB paid J$5.85 billion (One Jamaica dollar=US$0.008 cents) for these shares and has thus made a profit of J$2.06 billion or US$13.7 million on the purchase of Barita shares, a return of 35 per cent on its investment.

“Thus far, the Barita investment has paid handsome dividends for FCB. Further, with Cornerstone’s 74 per cent shareholding in Barita being worth US$525 million, if FCB has lent Cornerstone US$45 million, it would have lent less than 10 per cent of the value of Cornerstone’s shareholding in Barita.

“This cannot by any stretch of the imagination, even hypothetically, be described as a ‘criminal act’. Only a delusional person would resort to such empty rhetoric

“In addition, contrary to Senator Mark’s flights of fancy, FCB has made a capital gain of over TT$90 million through its investment in Barita, which is a well-established Jamaican financial company that has been operating in Jamaica since 1977.

“The questions that must be asked, therefore, are, why Senator Mark is so interested in trying to undermine FCB’s efforts to grow and develop in the region and why is he spreading such false and malicious information about another well-established Caribbean company?” Imbert added.