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Antigua-Barbuda regulator removes directors of bank implicated in Brazilian bribery scandal
Published on February 13, 2017 Email To Friend    Print Version

By Caribbean News Now contributor

ST JOHN’S, Antigua -- The Antigua and Barbuda Financial Services Regulatory Commission, in exercise of its powers under the law has removed three of the directors from the board of Meinl Bank (Antigua) Ltd and appointed Cleveland Seaforth, managing partner, KPMG Eastern Caribbean, as the official administrator of the bank.

In addition to assuming control of the bank, the official administrator will investigate the operations of the bank and submit a report to the Commission on the results of his investigation. On completion of the investigation, the Commission will review the report from the official administrator and take the appropriate actions to protect the interest of depositors and creditors, along with the integrity of the international financial sector.

The Commission assured the depositors and creditors of the bank that the regulatory action being taken is intended to protect and to safeguard their interest and the official administrator will work along with the bank’s stakeholders during the period of his appointment.

The Commission also reassured all stakeholders of its commitment to ensuring the safety and soundness of all licensed financial institutions under its regulatory and supervisory purview within the jurisdiction of Antigua and Barbuda.

In the largest foreign bribery case in history, Brazilian multinational, Odebrecht SA, along with a Brazilian petrochemical company, Braskem SA, pleaded guilty last December and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world.

According to its admissions, Odebrecht engaged in a massive and unparalleled bribery and bid-rigging scheme for more than a decade, beginning as early as 2001. During that time, Odebrecht paid approximately $788 million in bribes to government officials, their representatives and political parties in a number of countries in order to win business in those countries.

The criminal conduct was directed by the highest levels of the company, with the bribes paid through a complex network of shell companies, off-book transactions and offshore bank accounts.

According to press reports, Odebrecht purchased Meinl Bank (Antigua) Ltd in or about 2010 or 2011 and used the bank as part of Odebrecht’s complicated scheme to bribe government officials in various countries.

Last month, the ruling Antigua and Barbuda Labour Party (ABLP) called on the leader of the parliamentary opposition, former prime minister Baldwin Spencer, and the current political leader of the opposition United Progressive Party (UPP), Harold Lovell, to explain their role in the Meinl Bank purchase by Odebrecht that occurred during their administration from 2004 to 2014.

The ABLP called for disclosure by Spencer and Lovell of any and all links to the Odebrecht saga, including the purchase of Meinl Bank in 2010.

Luiz Franca was one of three Brazilians who fronted the purchase of Meinl Bank in 2010 and he continued as managing director during his appointment by Spencer as honorary consul in Brazil. He was also known to have a close relationship with Lovell, having collaborated with him on several projects. The ABLP said it believes that Spencer must have had discussions with Franca prior to appointing him as honorary consul to Brazil.

According to a Brazilian newspaper account of a trial in Brazil, Vinicius Borin, one of Franca’s associates, said that Antigua Overseas Bank was the first bank used by Franca to facilitate bribes on behalf of Odebrecht, before he, Franca and Marco Bilinski fronted the purchase of Meinl Bank.

The ABLP noted that this purchase was known to Lovell as then minister of finance.

“Spencer has a public duty to explain why he appointed Franca and the relationship between him, Franca and Harold Lovell, particularly as it been alleged that hundreds of billions of dollars were laundered through Meinl Bank while Spencer was prime minister and foreign minister, Lovell was finance minister and Franca was, at one and the same time, their honorary consul to Brazil and the managing director of Meinl Bank,” the ABLP said.

Related articles:
Antigua-Barbuda PM moves swiftly to address allegations in US court
Denials and firing over Antigua-Barbuda bribery allegations
Antigua-Barbuda PM to sue opposition party for defamation
Antigua-Barbuda opposition called on to explain banking scandal
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