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Now T&T Central Bank, Clico sue Sakal

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Written by CBC NEWS Thursday, 11 April 2013 09:24

Former corporate secretary of CL Financial (CLF) Gita Sakal is being sued by the Central Bank and insurance giant Colonial Life Insurance Company (Trinidad) Ltd (Clico). The suit against Sakal was filed in an amended claim in the Port-of-Spain High Court last Wednesday and seeks to recover millions of dollars.

Sakal now joins her former CL Financial bosses, Lawrence Duprey, Andre Monteil and three companies—CL Financial Ltd, DALCO Capital Management Ltd and Stone Street Capital Ltd—in the claim filed by the Central Bank and Clico. Evidence in the case will not be made public, following an application by both Duprey and Monteil’s attorneys last year, in which the men sought the protection of the courts to have the matter heard in camera.

Judicial sources say when the matter came up for hearing before Justice Mira Dean-Armorer in the Port-of-Spain High Court, legal counsel for both Duprey and Monteil argued that their clients were currently the subjects of an ongoing criminal probe, and should the proceedings of the civil trial be made public, such exposure could possibly prejudice their case. The lawyers asked for the proceedings to be sealed and Dean-Armorer granted the request.

Duprey and Monteil are accused of mismanagement of Clico, and misapplication and misappropriation of the prized insurance giant’s income and assets to the detriment of its policyholders and mutual fund investors. Sakal is being accused of placing her personal interests above Clico and its policyholders, as well as assisting in breaching various procedures, protocols and mismanaging the assets and mutual funds held in Clico.

Last December, Director of Public Prosecutions Roger Gaspard, SC, in a media release, said the police had started a criminal investigation into the conduct of individuals and corporate entities involved in the collapse of Clico and related companies. Gaspard warned that the media “should not publish or broadcast anything which might jeopardise, hinder or otherwise prejudice the investigation or any possible proceedings which might result from it.”

He also wrote to Attorney General Anand Ramlogan and Sir Anthony Colman, QC, who is currently overseeing the Commission of Enquiry into Clico and the Hindu Credit Union, over the public hearings, saying if the enquiry went on or continued to be held in the public domain it was likely to delay a prosecution and jeopardise the police investigation.

Both Colman and Ramlogan refused to stop the enquiry or have the proceedings held in camera. Ramlogan also refused to advise the President to vary the enquiry’s terms of reference. Colman said it was ultimately up to the Government to decide whether the enquiry should continue in light of a police probe.

Duprey and Monteil were initially slated to give evidence at the enquiry. However, they subsequently indicated to Colman that following consultations with their legal team, they would not be appearing owing to the criminal probe against them. Sakal has appeared before the enquiry on several occasions and during her testimony  admitted to earning a multi-million-dollar salary and bonuses. The Government has so far spent some $20 billion on bailing out Clico.

Strike costs St Lucia government over EC$3 million

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Written by CBC NEWS Wednesday, 10 April 2013 16:24

The three week old strike by Civil Servants has cost the country well over EC$3 million, according to Cabinet Secretary Darryl Montrope.

The Government started to assess the financial cost of the work stoppage, when the strike came to a halt on Tuesday.
According to Montrope , preliminary figures for the Customs Department alone indicate that the Government lost over EC$2 million in revenue at an average of EC$200,000 a day.

The Cabinet Secretary said apart from Customs -  the Inland Revenue Department, the Ministry of Commerce and the Registry were the worst affected by absentism during the strike period.

He said with respect to the Inland Revenue Department while government was able to meet the revised fiscal target for the month of March it was clear that more funds would have been collected had the full work force been present.

In addition Montrope said it must be noted that despite the fact that the workers were away from their jobs they were still being paid.

"The fact that the workers were paid even while off the job should also be part of the calculus of the impact of the strike.

We have not arrived at the final value on the impact of the strike because some workers were in and out of work during the three weeks.”
He said the government would also assess the impact of the strike on the business community.

The Cabinet Secretary said while the strike did not have a crippling effect, the government is pleased that Civil Servants have returned to work, adding that it was in no one's interest for there to be industrial unrest especially at this time.

The Civil Service Association and the Government Negotiating Team are expected to resume negotiations before the end of the week, with the Association hoping that a settlement can be reached on new proposals for allowances for Public Servants.

CMC

St Kitts government presents tax free budget

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Written by CBC NEWS Wednesday, 10 April 2013 09:01

Prime Minister Dr. Denzil Douglas Tuesday presented an EC$528.1 million (One EC dollar = US$0.37 cents) tax free budget to Parliament outlining a reduction in corporate taxes as well as extending several incentive packages that his administration had earlier implemented in a bid to stimulate the economy of the twin-island federation.

Prime Minister Douglas told Parliament, which had been boycotted by the six opposition legislators, that there would be a reduction in corporate taxes 35 to 33 per cent, an extension of the Building Materials Incentive Programme that provides for duty-free concessions on imports on building materials for home construction as well as pursue the expansion of FREESH - a soft loan arrangement for first time home builders.

In addition, the Douglas administration hopes during the fiscal year to increase land distribution and accelerate infrastructure development in land distribution areas.

He said that six investment projects had been approved valued at EC$300 million as a further stimulus for the local economy over the next five to seven years.

“They have the potential to stimulate growth within and between various sectors such as construction, tourism, wholesale and retail, and information and communication technology. These projects will also provide well-needed long-term job opportunities for persons in various fields of expertise such as landscape architects, web developers, graphic designers and mechanics,” he added.

The budget presentation was originally due to have been delivered in January, but had been delayed after two government legislators, deputy prime minister Sam Condor and senior minister Dr. Timothy Harris – failed to participate in putting the package together. The two former ministers were among the six legislators that boycotted the sitting.

Dr. Douglas said that from this year all businesses, including those that are the beneficiaries of tax holiday will have to file annual tax returns.

“This will help us to determine the effectiveness of our tax policy regime and inform our decision-making process as we endeavour to ensure that the right sectors are the beneficiaries of our stimulus and growth programmes.”

He said his administration has always welcomed sound recommendations that carry the potential to induce investment and stimulate economic output and last March introduced legislation that increased the amount deductible for management compensation from EC$60,000 to EC$75,000.

“This amendment provides a much larger deduction in the form of executive compensation for businesses from their taxable incomes,” Dr. Douglas said, adding that a second strategy focused on closing clear tax loopholes and modernizing selected sections of the current Income Tax Act.

“ I am now pleased to note that the closure of these tax loopholes has created some degree of fiscal space,” he said adding “the question is, what should we do with this fiscal space that this strategy has created?

“Should we focus on providing more tax deductions or should we re-examine our tax rate for corporations which is said to be the highest in the Organisation of Eastern Caribbean States (OECS)?

But he said the reduction in corporate taxes “will be applied to taxes filed in respect of business activities occurring in 2013”.

He said that a serious issue facing the government is to develop policies aimed at stimulating the local economy adding “we have determined, however, that some of the key elements of our strategy going forward will include support for the construction sector, entrepreneurship, and education and skills training.

“I am pleased to update you, this Honourable House and the citizens of this country that we have not only developed the specifics of the programme which is called “Preparing People for Employment Project” (PPEP) but have successfully enrolled 2,795 young persons and placed1, 412.

“The majority of these persons have been placed in the private sector. Under this Project, focus will be placed on building vocational skills, social and life skills and entrepreneurship. PPEP is designed to target unemployed youths by providing training and internship opportunities to build skills necessary for the new economy. The core areas of training includes: building trades, beauty services, hotel and tourism, environment, renewable energy, agriculture and ICTs.”

He said his administration had also been successful in dealing with the national debt to the point “where we are now at a stage where we have reduced the burden of our debt overhang and in so doing have effectively relieved the government from much of the inherent fiscal vulnerabilities associated with unsustainably high debt”.

He told legislators that there are “some early signs that our fiscal discipline has created a little headroom for us to continue to support the main functions of the government service and to promote important policies planned for implementation in 2013”.

He said that the government’s strategic actions have been crafted in line with the island’s budgetary limitations and commitments to the reform agenda.

“As our systems evolve, we must take time for assessing our actions so that we can have continuous improvements. In this regard, we are working on several fronts with bilateral and international partners to accomplish a number of reforms in tax administration, public financial management and the civil service. “

He said the International Monetary Fund (IMF) had assisted in evaluating the performance of the Value Added Tax (VAT) launched in 2010 and that with the assistance from the European Union, “we have developed a robust Public Financial Management Action Plan to guide reforms over the medium term.

Last year, the government signed a grant agreement with the World Bank to implement a project for the enhancement of public sector governance and efficiency.

Dr. Douglas, who is also the Finance Minister, said that as part of his administration’s efforts to strengthen tax administration and compliance, the Inland Revenue Department has launched a major taxpayer public education and awareness campaign with a focus on property taxes.

He said prior to the launch of this initiative, revenue derived from property taxes had traditionally underperformed relative to its target, exhibiting anemic growth and large fluctuations, particularly over the period 2003 to 2011.

He said in 2010, property tax receipts rose to EC$7.6 million, before declining to EC$6.6 million the following year.

“However, following the implementation of relevant components of our Tax Administrative Reform Strategy, we witnessed a notable turn around in the level of tax collected. In fact, data from the Inland Revenue Department shows that Property Tax collection for 2012 is in the region of $10.8 million.

“It is important for all to note that these results were underpinned by a comprehensive public education campaign that was implemented in 2012 and geared towards increasing the general public’s awareness and understanding of their civic responsibility as citizens to make their fair contribution in taxes and contribution to Nation building.

“The Department will continue in 2013 to strengthen its public relations strategy to drive the process of enhancing taxpayer education and awareness in St. Kitts and Nevis. During the forthcoming months, the Department will also work with the Water Services Department to enhance the administrative efficiency of both the Property Tax and water billing system. “

He said while there are plans to replace the current Income Tax Act enacted in 1966, capacity constraints have made it impossible to present the updated draft bill.

“We will continue to fine tune the existing draft and ensure that it is delivered to this National Assembly in the quickest time possible,” he added.

CMC

St Kitts Opposition boycott budget presentation

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Written by CBC NEWS Tuesday, 09 April 2013 16:16

Opposition legislators Tuesday boycotted the presentation of the national budget insisting that the long tabled vote of no confidence in the Dr. Denzil Douglas administration be debated.

“We the majority of Elected Representatives in the National Assembly of St. Kitts and Nevis will not participate in the debate of the 2013 Budget,” the six opposition legislators, including former deputy prime minister Sam Condor and senior minister Dr. Timothy Harris said in a statement.

Last week, a High Court judge set April 18 as the date for hearing arguments from lawyers representing the Speaker, Prime Minister Dr. Douglas and members of his Cabinet, after  the opposition legislators filed a motion seeking to block the government from conducting any business in the National Assembly other than the national budget.

The six opposition legislators had earlier this year written to Governor General Sir Edmund Lawrence declaring that they had lost confidence in Prime Minister Douglas and his government. 

The opposition legislators have scheduled a news conference “to further sensitise the people of this country to the continuing threat to democracy posed by the Prime Minister, the Rt. Hon. Denzil Douglas, and the Speaker of the National Assembly, Hon. Curtis Martin, who have done everything to prevent the Motion of No Confidence in the government from coming to the floor of the National Assembly for debate”.

The opposition legislators warn that “this continuing, deliberate neglect by the Speaker of the National Assembly, the Prime Minister and his Administration, of their obligation to ensure that the Motion of No Confidence, which was delivered to the Clerk of the National Assembly on the 11th day of December, 2012, is given the highest priority is a reckless disregard of the right of the people of this country to have a government of their choice comprising the majority of elected representatives.