Former managing director of Scotiabank Jamaica, William Bill Clarke, has filed a petition in the Supreme Court seeking to have the bank wound up on the basis that it was insolvent because it has failed to pay him CDN$160,000 under the terms of a settlement agreement.
However, the bank has filed a motion to strike the petition for winding up, arguing that it was an abuse of the process of the court because there is a bona fide dispute as to whether the money should be subjected to withholding tax.
Scotiabank, in a disclosure notice to the Jamaica Stock Exchange, said its annual and quarterly financial reports were matters of public record and showed that it posted $2.34 billion in profits for the six months ended April 2011, and has a capital base of $24.2 billion.
bank is quite capable
It is, therefore, patently clear that the bank is in fact not insolvent, and is, therefore, quite capable of meeting all its debt as they fall due, said the notice.
According to the notice, on August 11, Clarke filed the winding-up petition on the grounds that the bank was insolvent and unable to pay its debt, having failed to pay him CDN$160,000, being associated costs under the terms of a June 7, 2011, settlement agreement.
In response, the bank filed the motion to strike on the basis that the petition was procedurally defective. It said there was a genuine dispute as to the banks obligation to pay the amount before an opinion is rendered by PricewaterhouseCoopers, the firm jointly retained by the bank and Clarke under the terms of the settlement agreement, to make all withholding tax determinations.
In addition, the bank has sought an injunction restraining Clarke from advertising the petition until the hearing and determination of the motion to strike.
The court has ordered that Clarke be restrained for 14 days from advertising the petition. The parties return to court on August 31 when it will be determined if the restraining order should be extended. The motion to strike Clarkes petition is to be heard on September 29.
The bank said that after the settlement of the dispute with Clarke, the sum due will be paid to him forthwith.