St. Maarten MP questions legality of bond issued by Central Bank

Wescot: Government ‘dead wrong’ if it thinks it should not give account to Parliament

PHILIPSBURG - United Democrats (UD) Member of Parliament (MP) Sarah Wescot-Williams is questioning the legality of the US $75 million bond issued on behalf of St. Maarten by the Central Bank of Curaçao and St. Maarten (CBCS).

Wescot-Williams said government is “dead wrong” if it believes that it should not give account to Parliament on this issue.

The Committee for Financial Supervision CFT has indicated that proper procedures were not followed for the bond, but Finance Minister Ardwell Irion denies this and said CFT has come to an inaccurate conclusion.

Wescot-Williams believes this matter will not end well for St. Maarten. “It is beyond me that the government of St. Maarten and the Minister of Finance together with the CBCS would agree on a bond issue for the government of St. Maarten and think that this can be done without consultation with the CFT and/or without taking the Kingdom Law on Financial Supervision into consideration,” she said.

“I have heard the argument that this bond issue to be written out by the CBCS is … to strengthen the liquidity position of government and therefore does not have to pass the scrutiny of the CFT and the Kingdom Law on Financial Supervision. If this is government’s argument, then I have to disagree.”

She said Parliament is yet to receive the amended draft 2020 budget it has been promised since August. From this perspective, Wescot-Williams said it should be questioned how government could have arrived at its decision.

“It is also questionable how the Central Bank of Curaçao and St. Maarten could have written out this bond issue [and – Ed.] could have issued the bond without giving attention to the role of the CFT in all of this.

“If I look at one of the last paragraphs of the letter of the CFT to the Minister of Finance regarding this process then I cannot help but conclude that this matter cannot end well. I say so because the paragraph that I am referring to is one where CFT is admonishing government to cease this process of the bond issue.

“While the CFT cannot take any measures if government does not comply, CFT is advisor to the Kingdom government and they, yes, can take measures. That is why I stated that I don’t see how this matter can end well.”

She said also that the issuance of a bond on behalf of government to raise money for the administration depends very much on confidence from the persons subscribing to the bond. The recent events will only serve to erode potential subscribers’ level of confidence.

“Even if government is correct in its assumption that they and the CBCS could go ahead and make arrangements with a bond issue without taking into account Kingdom law, then what about the fact that in order to contract loans, according to the St. Maarten Constitution, it has to be done by a national ordinance?” she asked.

“When is government planning to work this into a draft national ordinance to then be approved by Parliament – after it has been completed? After the fact, Parliament will have to learn of the intricacies of this particular arrangement? This too will be totally unacceptable. …

“I think it is sad that, as a country, we are going through these types of things. … I have to conclude that this government feels that they have no account to give to Parliament and/or feel that Parliament will just follow whatever course the government puts out there. And if that’s the feeling of government – at least from this MP – they are wrong, they are dead wrong.”

 




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