Suisse Security Bank Takes Bahamas Central Bank To Court In Suspended Licence Row

Mandy Robinson, Tax-news.com, London

12 March 2001

Suisse Security Bank and Trust Ltd (SSBT) is in court this week attempting to defend its reputation and challenge a decision made by the Central Bank of The Bahamas to suspend its licence.

According to a report in the Nassau Guardian, the SSBT says the suspension of its licence has severely damaged its public image and investors have withdrawn millions of dollars from the bank. If the licence suspension is upheld it could also result in the loss of 45 jobs, 43 of which are held by Bahamians. The Nassau Guardian says that the police authority seized 'physical control' of the bank and its documents last week.

In court the SSTB intends to argue that the Central Bank violated a court injunction dated Friday, March 2, which restrained the Bank from 'revoking' or 'suspending' SSBT's licence. Christopher Lunn, chief executive officer of SSBT, said that following discussions between the two banks, the Central Bank sent a letter to inform SSTB of its intentions but only gave SSBT 'less than one working day to respond.' He explained: 'And because we did not respond to this letter within the specified time, our licence was then suspended at 1:00pm last Monday afternoon.'

He added: 'We meet with the Central Bank on Thursday, we get a court injunction on Friday, and they suspend our licence on Monday. We see it as a malicious action taken by the Central Bank against its licensee, and against Bahamian workers.'

One of the bank's lawyers, Derek Ryan, told the Nassau Guardian that the Central Bank acted wrongly because the law states that the bank should give no less than seven days to respond to the official letter: 'Notwithstanding the view that the bank licence has been revoked, that is the furthest thing from the truth, the bank has been temporarily suspended and we view that to be an illegal suspension. And it is our intention to appear in court and the judge will determine whether what happened was within the confines of the law,' he stated.

A statement from the Central Bank explained: 'The suspension results from the inability of said bank, at this time, to normally fulfill certain prudential requirements and satisfy the Central Bank of The Bahamas as to its affairs.'

But Christopher Lunn was adamant that his bank had never been involved in any illegal banking activities and said the Central Bank had failed to explain what 'prudential requirements' the bank had not fulfilled. 'We have never had any cases where Suisse Security has been found guilty of any money laundering,' he said.

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