BELIZE CITY, Thurs. June 14, 2018– On Thursday, June 7, the Central Bank of Belize issued a press release announcing that it had placed the international offshore bank, Choice Bank Limited, under enhanced supervision due to the bank’s liquidity problems.
On that same day, however, a fixed date claim was filed at the Supreme Court Registry by some of the bank’s depositors. The claimants in the lawsuit are seeking relief from the court to close down Choice Bank.
The court document stated, “The Claimants seek the following orders pursuant to Section 105 of the International Companies Act, Chapter 270 of the Substantive Laws of Belize, read along with Section 131(a) of the Companies Act, Chapter 250 of the Substantive Laws of Belize and the inherent jurisdiction of the Court: An Order that the Defendant, Choice Bank Limited, be wound up by the Court under the provisions of the International Business Companies Act; Costs and such further or other relief as the Court sees fit.”
Companies seeking to have the court close Choice Bank Limited include Orion Corporate & Trust, AC Webconnecting by t/a Shoshoro NV, ACWM and Live Pimpin, Oasis Global Belize Limited, and Oasis Global Nevis Limited.
The court document went on to say that the company carries on business as an international bank with authorized capital of $8,600,000, and that the claimants operated demand deposits accounts with the bank, which is named in the lawsuit as defendant.
Claimants in the lawsuit have itemized the amount of moneys that the bank owes to them, which is estimated to be about $4 million US dollars. The claimants have also attached a list specifying the dates when the company (Choice Bank) was served with demands by their attorneys to pay the moneys owed.
“Over 21 days have now elapsed since the Claimants served the said demands, but the Company has neglected to pay or satisfy the said sums or any part thereof, or to make any offer to the Claimants to secure or compound same,” the court document said.
“The Company is, pursuant to Section 131 (a) of the Companies Act, insolvent and unable to pay its debts; and in the circumstances it is just and equitable that the Company should be wound up,” states the document.
The case against Choice Bank will come up for mention before the Honorable Madam Justice Shona Griffith on Wednesday, June 27 at 10:00 a.m.
In mid-May, Prime Minister Dean Barrow, in his capacity as Minister of Finance, told the media, “…I signed a letter based on the recommendation of the Central Bank giving the Central Bank broader powers than would normally be the case to, as it were, ensure that the bank’s [Choice Bank] continued operations would be with a view to seeing all their depositors and customers satisfied as far as is possible.”
On Monday, we asked the officials at the Central Bank via email, “Information to our newspaper is that the bank has pretty much wound down its operations in Belize and will be located in another jurisdiction. How come the Central Bank is just addressing the shortcomings of the bank and its depositors? Isn’t the Central Bank’s action a little too late to ensure that depositors are afforded the necessary protection under laws of Belize?”
The officials at the Central Bank replied, saying, “Kindly note that the Central Bank of Belize is not ‘just addressing the shortcomings’ of Choice Bank Limited (CBL) operations in Belize. While the press release was issued on 7 June, 2018, this date is not indicative of the commencement of the actions by the Central Bank and does not disclose the extent to which the Central Bank has exercised its regulatory authority in this regard.”
The response from the Central Bank went on to explain that late in 2017 “…the Central Bank has been taking steps to address concerns with CBL’s operations, which were identified in the conduct of the Central Bank regulatory oversight function. Upon the CBL’s decision to suspend withdrawal of deposits on 9 April, 2018, the Central Bank immediately implemented an intense course of action.”
It further stated that, “In light of information discerned from the enhanced monitoring and investigation, the Central Bank recommended that the Prime Minister issue preventative measures under Section 27 of the International Banking Act with respect to CBL.”
“There has been public speculation on the state of CBL’s operations in Belize. The International Banking Act provides for an international bank to be wound up either compulsorily or voluntarily. At this time neither the Central Bank nor CBL has initiated the formal process of winding up CBL. Currently, the scopes of CBL’s international banking operations are restricted, which is distinct from initiating winding up procedures,” the Central Bank stated in its reply.
The Central Bank did not respond to our question about the bank operating from another jurisdiction. Amandala has learned, however, that Choice Bank Limited has a subsidiary in Puerto Rico under the name “Choice Financial International”.
Choice Bank Limited first began operating in Belize in 2008, and up to 2014 had listed the following persons as directors: Robert Cummings, businessman of Toronto, Ontario Canada; Tyrone Gill, Belizean banker; Stephen Czechowski, chartered accountant, North Calgary, Canada; Yuval Tal, businessman, New York, N.Y. USA; and Rodwell Williams, Belizean attorney.