"The bond of US$150 million (Naf.270 million) is both in keeping with the CBCS Charter as well as the Investment Policy which has not been revoked or replaced by a new policy by the Supervisory Board of the CBCS.
"The CBCS is the Central Bank of Curacao and Sint Maarten, and serves both countries on an equal basis. The Netherlands Antilles ceased to exist October 09, 2010 and everybody has to be realistic and live in the current times and not in the past," Minister of Finance Hon. Hiro Shigemoto said on Wednesday.
Minister Shigemoto confirms receipt of two letters dated 21 and 24 February 2012 from Curacao's Minister of Finance with respect to the bond.
The Minister sent a letter to Curacao's Prime Minister and Minister of Finance dated 27 February 2012 with respect to a Naf.300 million bond where the Central Bank in December 2009 acted as intermediary in the issuance of the bond for Curacao's local utility company Aqualectra. The utility company needed a loan of Naf.240 million.
The Minister reminded Curacao's Prime Minister and Minister of Finance that there are, "Certain developments within Aqualectra which could have serious consequences for the equity of Aqualectra in connection with Aqualectra not being able to meet its obligations in servicing its debt (interest and principal) from the bond issuance.
"Hereby I focus specifically on the reduction of water tariffs as well as the transfer of share capital of Aqualectra in the CUC/BOO which leads to a substantial decrease in own equity of Aqualectra.
"Should this be the case then I do not rule out that the aforementioned developments could cause direct or indirect damage to the Country Sint Maarten. Both the Prime Minister of Curacao as well as the Minister of Finance of Curacao will be held liable by my person as Minister of Finance of Sint Maarten for any eventual negative consequences that Country Sint Maarten should suffer as a consequence of the aforementioned developments. It is still the Central Bank of Curacao and Sint Maarten.
The Minister has been informed that Aqualectra lost approximately Naf.23 million in 2011 and is projected to lose another Naf.28 million in 2012.
Minister Shigemoto also confirms receipt of a letter with 25 questions from the Parliament of Sint Maarten by the Democratic Party (DP) faction and Independent Member of Parliament Hon. Patrick Illidge faction, querying with respect to the Central Bank's investment policies etc.
These questions will be answered by early next week latest. Both factions are part of the coalition government. The CFT also sent several questions to the Minister of Finance which will also be answered and hopefully the same concern will be given to the Aqualectra bond situation by the CFT.
The Minister of Finance has not been officially contacted regarding the Dutch Caribbean Common Court's role in the appointment of a seventh member to the board of supervising directors at the CBCS.
"Thus far the Minister of Finance of Curacao has been acting as if Curacao is the only shareholder in the CBCS, however, Sint Maarten is still a member and I will do all in my power to protect Sint Maarten from suffering any negative consequences as a result of the recent and on-going developments surrounding the government of Curacao and the Central Bank," Minister Shigemoto said on Wednesday.
Minister Shigemoto has also requested of Minister Jamaloodin via letter of January 26, 2012 a date to convene the legally prescribed meeting (Bank Charter, article 32 sub 5) between the two Ministers of Finance and the Supervisory Board of Directors to discuss topics such as the CBCS 2012 Budget (still not approved), the financial statements of 2011 (no de-charge given by the board), current account status update, setting up and manning of the Sint Maarten branch of the Central Bank of Curacao and Sint Maarten as well as other issues such as monetary policy, production of bank notes (supply is apparently decreasing to worrisome levels particularly on Curacao).
According to Minister Shigemoto, no answer has been received with respect to his correspondence to the Curacao Minister of Finance, "...yet the Minister of Finance of Curacao wants to hold me responsible for possible damages to Curacao when he apparently doesn't see it fit to meet about any of the aforementioned issues which are being neglected," Minister of Finance Hon. Hiro Shigemoto pointed out.
