…and faces questions about Cayman company
But perhaps the most interesting fact disclosed by CEO Gabb was the revelation that during the securitisation process the mortgages were handled by a company registered in the Cayman Islands. Its owners? The same DFC directors, who Gabb named only after persistent prompting, being Glenn Godfrey, then Chairman of DFC, his deputy, David Courtenay and director Bob Bou Nehra. Gabb claimed the new company was sold the loans because of U.S. SEC regulations. But at this, the chairman of the committee responded that his documentation showed otherwise and then attempted to sort through the tangled web of the securitization process.
Godwin Hulse
“In effect, if there was a default by the original mortgager to St. James which resulted in a default by St. James to the Social Security, which resulted in a default by Social Security to the DFC, which could then result in a default by DFC to the Belize Mortgage Company. There was going to then be no default by the Belize Mortgage Company on its payment to bondholders because it held a sovereign guarantee under the insurance. Is that correct?”
Troy Gabb
“Yeah.”
Godwin Hulse
“Would it be correct to say that in the same people as directors of the DFC, which you’ve already agreed are the same people as directors of the Belize Mortgage Company would be some of the people involved in the St. James Building Society, to the best of your knowledge?”
Troy Gabb
“Yeah.”
Godwin Hulse
“So the same people signing on St. James whose mortgages go to Social Security for transmittal to the DFC, the same people from St. James then would pick it up in the DFC and the same people would take it to the Belize Mortgage Company and when it reaches the Belize Mortgage Company would be holding on to a sovereign guarantee. So in other words, it was a secured loan all the way through. Is that correct?”
Troy Gabb
“I would have to say yes the loan was secured all the way through.”
Godwin Hulse
“In your professional judgement, would you consider that there might be anything wrong in facilitating that process where the original loan would have originated by the same promoters who would take it all the way through to an international bond?”
Troy Gabb
“Well, first off I need to say, I don’t know who are all the players involved with St. James in terms of who all the directors are. It is from my knowledge that at least one individual might have some dealings with St. James that would have been a director for the DFC. In terms of the structure of the transaction, I see nothing wrong with the structure of the transaction itself. The structure has been vetted by all and sundry, attorneys in the U.S., attorneys in Belize, different opinions has been passed, vetted by rating agents so I can only speak to the transaction.”
And even though Gabb referred to him as a director, the member of the DFC board with ties to the St. James National Building Society was of course Glenn Godfrey, the driving force behind the society and simultaneously chairman of the DFC. Godfrey, as recently as yesterday, has declined to speak to News 5 or any other media house.
Although we had to leave the hearings before their adjournment, the final witness, former SSB executive chairman Eberto May, was grilled intensely about how he and the board could have been so lax in failing to examine the woefully inadequate security for Godfrey’s securitized loans that were guaranteed by the SSB. May told the committee that, while in retrospect things could have been done differently, it was now “water under the bridge”. To which chairman Hulse replied “that’s a lot of water”.
No date for the second hearing of the Senate Select Committee has not yet been determined but on that day CEO of the SSB, Narda Garcia and present chairman of the board, Yasin Shoman, are expected to testify.
In related news, today Chairman Hulse announced that the auditing firm of Mark Hulse, of Baker Tilly International affiliation, has been chosen to conduct a comprehensive audit of the SSB simultaneous to their proceedings.
