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TEST OF BELIZE’S BANKING SYSTEM LOOMS

TEST OF BELIZE’S BANKING SYSTEM LOOMS
October 05
10:48 2018

The banking system of Belize is about to be tested in new and historic ways. An urgent application has been made by several companies to the Supreme Court in regards to the liquidation of Choice Bank Limited.

A group of claimants comprising several companies who claim that Choice Bank held funds for them as trustee, including Orion Corporate and Trust Services, Glen D. Godfrey & Co LLP, AC Webconnecting BV, XTB International Limited IPC Trade INC and FBS Markets INC filed a claim in the Supreme Court asking that the liquidation of Choice Bank be continued; but under the additional supervision of the Supreme Court of Belize.

The Claimants say that they are asking for this extra step in order to ensure that their interest are being protected, and to ensure that the process of winding up is as fair and as transparent as possible.

Banking experts told the Reporter today that with the Banking sector in Belize under constant vigilance and with very real concerns about keeping correspondent banking privileges, asking for Court Supervision over the historic winding-up of the bank does not seem to be asking too much, as such an order will safeguard the reputation of both the Central Bank and the Liquidator, and ultimately of Belize as a prudent banking jurisdiction.

On June 29, 2018, the Central Bank of Belize took a historic and unprecedented step of revoking the International Banking License of Choice Bank Limited, an offshore bank, and placing it in liquidation. The Liquidator appointed is Mr. Cedric Flowers.

There has already been much controversy reported in the local and international media in respect of the revocation of the banking license and in fact, Choice Bank has sued the Central Bank and the Ministry of Finance, claiming that the actions taken by both to revoke the license and place the Bank under liquidation are unjustified and unlawful and have resulted in loss and damages, including to the reputation of the Bank.

That action is ongoing and whatever the result, the supervision of the banking sector in Belize, and the regulatory actions taken by the Central Bank are bound to come under close and critical scrutiny.

The parties to this latest claim are asking in effect that the Liquidator, Mr. Flowers be required to make a monthly report to the Court as to the progress of the winding-up of Choice Bank in relation to the realization of assets and proposed settlement of claims.

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