Finance Minister Colm Imbert has dismissed claims by opposition Senator Wade Mark who on Thursday accused the government of ‘cheating’ the country out of the $85 million lent by First Citizens (FCB) to the offshore company Cornerstone Financial Holdings Ltd.

In a statement yesterday, Imbert described Mark’s claims which were published in an Express article on Friday as ‘false and misleading allegations’.

Speaking at a United National Congress press conference on Thursday, Mark said financial statements acquired by the party showed the majority of Cornerstone’s assets were based in shares of Barita Investments Ltd.

He said no one could use it as collateral to get a loan from a bank like FCB, while Cornerstone also appeared to have no assets such as a building or machinery. Mark said the directors and relevant stakeholders of Cornerstone were unknown.

Responding yesterday, Imbert said banks were considering all forms of collateral for loans. “That could include shares of publicly traded companies, which could be the Trinidad Stock Exchange or any other public stock exchange, he said. “These securities are valuable, marketable and can be easily converted into cash.”

Imbert said Barita’s shares are listed on the Jamaica Stock Exchange, which is a recognized and well-regulated regional stock exchange. “Common practice in the banking industry might require equity collateral to have a margin of up to 50% above the loan amount,” he added.

Imbert said Mark was wrong not to know Cornerstone’s directors and stakeholders because substantial information was provided in Barita’s last annual report. He said there was also a plethora of public evidence that supports FCB’s integrity and outstanding performance both locally and in the Western Hemisphere.

Imbert added that Mark had erroneously stated that there was no evidence that FCB earned US$13.7 million from the transaction and that this figure was “unrealized capital gains”. Imbert said, however, that the IFRS 9 accounting standard requires financial institutions to value their assets, including stocks and bonds, at current market prices, which he compared to the value of a house. “When applying for a loan, the bank looks at the current value of the house, not the price at which it was purchased. The same method applies to stocks,” he said.

On Thursday, Mark also challenged FCB’s supplemental public offering (APO) of 11 million shares, criticizing the priority list of shareholders published by the government as having omitted stakeholders such as FCB employees. He said the current APO offered an employee stock ownership plan at 5% of available shares and asked “where are the individual employees?”

Mark said no definition was given in the offer for individual investors who were offered 55% of the shares but apparently did not have to come from T&T. Responding to those claims yesterday, Imbert said FCB employees are included in the “individual investor” category for allocation, along with all members of the public.

“In line with the policy of promoting the widest possible share ownership, this category was allocated the highest percentage of 55% of the offering,” he said.

“In addition, the stock offering is registered only with the T&T Securities Exchange Commission and has not been registered outside of T&T.”

Imbert said a foreign national can apply for shares, however, once they have a stock brokerage account with T&T and are interested and contact a T&T-registered stockbroker.

He said he hoped this information would “properly inform Senator Mark about Cornerstone, Barita and FCB and that the senator would stop trying to irresponsibly undermine a valuable national asset for no good reason and instead change his approach to support an important local financial institution”.

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