Turks and Caicos regulators shutter bank, freeze accounts

A bank founded six years ago in the Turks and Caicos Islands has been shuttered and its accounts frozen by regulators, a victim of non-performing loans and recent sizeable withdrawals, officials said.

TCI Bank Limited, which touted itself as the British Caribbean territory's first home-grown bank, was placed into provisional liquidation because regulators said it could no longer meet depositors' demands.

The bank's closure comes as a special British prosecutor is investigating former Turks and Caicos leaders for allegedly misusing public money, and profiting from the sale of government-owned land to developers in the tourist destination.

Britain imposed direct rule last August amid widespread corruption claims against former Premier Michael Misick and other officials.

According to its website, TCI Bank was founded by a Grand Turk resident named Madeline Potter and underwritten by ABI Bank Limited of Antigua.

The chairman of the bank's board is Washington Misick, a brother of the jet-setting former premier, who resigned amid the corruption investigation.

Jittery depositors have been gathering at the bank's Providenciales offices in hopes of withdrawing their savings in drips.

The situation has made life a misery for thousands of people, including low-wage construction workers from other poorer nations whose salaries were directly deposited in the bank.

"All my money - for my burial, my sickness - everything is in that bank!" one distraught woman outside the bank's headquarters told WIV4 News, a local television and Internet broadcaster.

Growing loss of confidence

Without revealing specifics, the chairman of the Turks and Caicos' Financial Services Commission, Sandy Lightbourne, said the bank "suffered a growing loss of confidence on the part of some of its important depositors" in recent days.

He also said the bank's position as a relatively new, stand-alone operation made it vulnerable to the global economic slump.

"Obviously, we must await the conclusions of the provisional liquidators' work, but I am afraid that depositors must expect that they might not be able to recover all of their savings," Lightbourne said.

Court-appointed liquidator Anthony Kikivarakis of the auditing firm, Deloitte & Touche LLP, said he is trying to secure and collect TCI Bank's assets while "investigating the affairs of the company to see why we have come to this spot."

Even though the bank's funds are frozen, he said obligations to pay loans are still in force.

The British-appointed leader of the Turks and Caicos, Governor Gordon Wetherell, said plans to protect depositors of failed banks is being fast-tracked.

"A commercial failure of this kind is an extremely serious matter," Wetherell said in a statement.

"I appeal to other licensed banks to deal as sympathetically as they can with those who are adversely affected."

- AP