Panday wants answers about Monteil's business transactions

Opposition Leader Basdeo Panday reacted swiftly Monday to news that former PNM Treasurer Andre Monteil has quit his post as chairman of the Home Mortgage Bank (HMB) and that the HMB has appointed controversial UDeCOTT chairman as Monteil's successor. (See story below)

In a statement, Panday claimed that Monteil "has not only escaped with his unethical purchase of Home Mortgage Bank shares, but false promises from the Prime Minster and collusion with his friend and business associate Calder Hart has earned Mr Monteil $20 million in profit at a time when he would more than likely have lost money from those shares than earned."

Last week the National Insurance Board (NIB) headed by Hart repurchased a 43.5 per cent block of HMB shares from Stone Street Capital, owned by Mr and Mrs Monteil, at a cost of $130 million - $20 million more than Monteil paid for the shares one-and-a-half years ago when he was sitting as chairman of HMB, a public-purpose company.

Panday said, "In March 2007 Mr Monteil's company, Stone Street Capital, bought the HMB shares for $110 million while Mr Monteil was Chairman of HMB. In August 2007, the Prime Minister told the Parliament the government would take steps to ensure that the shares are re-transferred at the same price of $110 million Mr Monteil paid for them."

He added, "One year has passed since the Prime Minister's statement. Mr Monteil has been in possession of and profiting from his ownership of those shares for 18 months. There has been no action by the government as promised by the Prime Minister to correct this act of insider trading or to have Mr Monteil return the shares for the same $110 million.

"What is worse is that there is a global credit crunch. Economies around the world are collapsing and it started with organizations involved in the business of mortgages.

"The Prime Minister yesterday (Sunday) announced a slowdown in government housing projects because of the need to cut spending and because mortgage rates are likely to increase beyond what the population can afford to pay. In other words there is going to be a slowdown in the home-ownership market and slowdown of business for the HMB.

"In that scenario, it is highly probable that HMB shares would begin to fall in value. But what happened is that Mr Monteil's friend who is his associate from Home Construction Limited and who served on several other boards with Mr Monteil when Mr Monteil was the treasurer of the PNM, Mr Hart, bails out Mr Monteil by purchasing the shares for $20 million more than Mr Monteil purchased them giving Mr Monteil a guaranteed $20 million profit.

"It is like a fire sale but instead of the goods going cheaply, they went for $20 million more, and Mr Hart has done this with tax-payers' money that he is supposed to be holding on trust for the poor and the needy who depend on the National Insurance Board. That $20 million could have been used to increase NIS benefits or saved for the hard times ahead when government will have to cut its social welfare programmes.

"I think the public would be very interested in finding out how the NIB decided to purchase these shares from Mr Monteil and how they came to that price."

Panday said there are several instances where Mr Hart has shown no regard for the public's welfare and appear to breach his fiduciary responsibility as a trustee of the public's interests. He said in those circumstances it is suspicious that Mr Hart remains in control of over $50 billion of taxpayers' dollars.

The Couva North MP also called on the government to expedite legislation to prevent insider trading noting that there were several other instances of private individuals profiting from the manipulation of share trading in state-owned companies.