CITING the need to protect the government’s close to $16 million deposit and the interests of the bank’s other clients as well as its 50 employees, Gov. Juan N. Babauta says he will recommend placing Bank of Saipan under receivership.
A receiver is defined as “a person appointed by a court administrator to take into custody the property or funds of others pending litigation.”
Babauta said his recommendation will include the appointment of a new chief executive officer to run the bank.
“We want to support the bank and we want to prevent it from going under. We were assured that the major shareholders will infuse new funds to keep the bank solvent, but we learned late in the afternoon that the bank is unstable—it is in trouble,” Babauta told Variety last night.
“The straw that broke the camel’s back was the fact that (the Marianas Public Lands Authority) tried to withdraw $2.6 million in time certificate deposits that matured (yesterday), but MPLA was told that because there was a ‘time difference’ in the states the bank could not release the money,” the governor said.
The Marianas Visitors Authority was also told that it could not withdraw $400,000 from Bank of Saipan, Babauta said.
“And then we heard that the garment workers of Willie Tan (who is one of the bank’s major shareholders) have already withdrawn their money,” the governor said. A lawyer who works for Tan has also withdrawn $1 million from Bank of Saipan, Babauta added.
“It was not clear last night whether Willie Tan still had money in the bank,” the governor said.
“These are the circumstances that led to our decision,” he said.
According to Babauta, the decision was made after a lengthy meeting that was attended by Lt. Gov. Diego T. Benavente, Attorney General Robert T. Torres, House Ways and Means Committee Chairman Stanley T. Torres, R-Saipan, House Tourism Committee Chairman Frank DLG. Aldan, R-Saipan, MPLA Administrator Bertha Deleon Guerrero, MVA Chairman Dave Sablan, acting MVA Managing Director Vicky I. Benavente and former Banking Commissioner Oscar Camacho, who was appointed yesterday as the governor’s special assistant for banking.
Yesterday morning, the governor met with two of the bank’s major shareholders—former Guam Gov. Paul Calvo and attorney David Lujan who told the administration that they would ensure the bank’s “sound operation” amid the multi-million fraud scandal involving its former chairman and CEO, Tomas B. Aldan.
“We are taking steps to stabilize the bank,” Lujan told Variety. “Everybody is shocked, but all necessary steps will be taken to re-assure the depositors and the public,” Calvo said.
Aldan was arrested on Friday by federal authorities for allegedly conspiring to defraud the bank of over $6.6 million.
(With Ulysses Torres Sabuco)
