Published On: Wed, Feb 20th, 2019

Jardim: “We do our utmost to protect ENNIA’s policyholders”

Minister of Finance Geerlings with CBCS Director Jose Jardim in Parliament - 20 Feb 2019

PHILIPSBURG – The Central Bank will “do its utmost” to protect the interests of policyholders at troubled insurance company ENNIA, but there are no guarantees. That is the message members of the parliamentary finance committee received on Tuesday afternoon from the Central Bank’s financial and economic director José Jardim.

Jose Jardim

The opposition asked for the meeting approximately seven months ago but for unexplained reasons it only took place on Tuesday. MPs Frans Richardson (USp) and Christophe Emmanuel (NA)  focused in the first round of questions on the value and status of Mullet Bay, an ENNIA-asset currently valued at $49.7 million that was with the insurance company on the books for $430 million. Richardson asked for assurances for “the people who put their money with “ENNIA” and Emmanuel pressured Jardim to put a name to the actions of the Parman-group – the beneficial owner of the ENNIA group of companies – mismanagement, money laundering of just moving money from one entity to the other.

Jardim outlined the widely published history of its involvement with ENNIA after the laws that govern financial institutions changed back in 2015 and obliged insurers to have sufficient assets on their balance sheets to cover their liabilities. The Central Bank’s controls ENNIA after the court approved the application of the emergency measure last year. Its actions focus on “restoring solvency and returning assets to the company.”

After the Central Bank managed to get access to assets parked at Merrill Lynch in New York, there remains a solvency gap of 1.1 billion guilders (around $614.5 million), Jardim said. The bank recovered $100 million beneficial owner Hushang Ansary withdrew from ENNIA-accounts after negotiations about restructuring the company broke down.

“The Central Bank employs all options to protect policy holders. We are doing our utmost,” Jardim said. “Efforts to restore solvency are in their preliminary stages.”

Jardim pointed out that this is a long process. “However, we will not make our strategy public because that could affect the outcome.”

Jardim declined to put a name to the actions of the shareholder that put ENNIA in trouble. “It is not up to the Central bank to classify what kind of transactions took place or to express an opinion from a legal perspective.”

“I am more concerned than I was before,” MP Richardson said in the second round. “I am concerned that we have a government that did not ring the bell about this issue.” He also wondered about last year’s appraisal of Mullet Bay at $49.7 million, while the property was on the books of ENNIA’s investment vehicle ECI for 771 million guilders (($430 million). “How did that happen? Should the Central Bank not have raised a red flag?”

Jardim later said that there have been appraisals of Mullet Bay in 2005, 2009, 2013, 2014, 2016 (2x) and in 2018, but that the Central Bank has never evaluated the appraisals prior to 2018.

MP Rolando Brison noted that Mullet Bay is one of the most sought after properties in the Caribbean but that it has now become clear to him why it was never developed by the owner after the destruction caused by Hurricane Luis in 1995. “They did not want to sell the property because they wanted to keep it on the books. And $50 million instead of $430 million? Somebody doctored those books.”

Brison accused the Central Bank of handling the Parman Group and its chairman Hushang Ansary with kid gloves. “It is a national travesty to keep Mullet Bay deliberately undeveloped. And what have the Minister of Justice and the Public Prosecutor’s Office done? Are they too busy locking up locals?”

Brison said that he expects actions from the government and that he considers calling for a parliamentary inquiry into the ENNIA-debacle. “The government has to show me something. The country has been held hostage and now it is clear that there was a reason for it.”

With MP Richardson, MP Emmanuel asked which other assets ENNIA has in St. Maarten and whether it is possible for the government to expropriate Mullet Bay. He also charged – after saying “Don’t insult the intelligence of members of Parliament” – that the Central Bank should have been more pro-active.”

But Jardim did not share that sentiment and his answers made clear that MPs appear to be badly informed about ENNIA’s history and the Central Bank’s role in it. “Only a restricted number of ENNIA-entities fall under the Central Bank’s supervision. Actually, most of them don’t. The discussion about which assets insurance companies are allowed to take into account for their solvency started already in 2011. The current emergency-measure places the whole group under the bank’s supervision.”

Jardim declined to say which assets the bank considers to restore ENNIA’s solvency. “That would disclose our strategy.”

He dismissed Brison’s kid gloves-remark: “We’ve gone through five court cases, and we’ve had the emergency-measure established through the court in Curacao and recognized in the United States. This is not an easy case but a complicated one. We have used all the legal instruments at our disposal. We’ve had to make difficult decision and we will keep doing that.”

In the meantime, Jardim said, the bank allows ENNIA to conduct its business as normal as possible to enable the company to keep paying pensioners.”

To MP Ardwell Irion, Jardim said: “We cannot give any guarantees; we can only say that we will do our utmost to protect the interest of all policyholders.”


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