Five days after financial regulators’ surprise announcement that they are winding down the Bank of Asia (BVI) Limited, Premier Natalio “Sowande” Wheatley dropped another bombshell on Tuesday in the House of Assembly.
The government, he said, had more than $5 million in the bank as of April 30. The premier was responding to questions from Opposition Leader Myron Walwyn, who followed up seeking more information.
“What will be the state of that $5 million, Madam Speaker, that is the people’s money in that bank?” Mr. Walwyn asked before going on to reference an April news report he said suggested that the bank’s assets in the VI could be frozen. “Why didn’t the premier seek to withdraw or somehow get that $5 million of the people’s money out of the bank before it collapsed?”
Mr. Wheatley replied that such decisions are up to regulators. “Once of course I was advised of the situation with the Bank of Asia — consulted, of course — I was informed of what the actions would be,” he said. “But these are actions exclusive for the regulator, and it’s not for me to take any action, so to speak. And they have legislation which informs what should take place when a bank becomes insolvent.”
When Mr. Walwyn pressed for clarity on how much of the $5 million is expected to be redeemed, Mr. Wheatley declined to comment.
“It wouldn’t be responsible for me to go into that,” he said. “I will allow the liquidator and the Virgin Islands Deposit Insurance to do their work, and in that process, you know, it will be determined who will get what.”
Tight-lipped
Regulators, however, have provided few details about the way forward since announcing the closure last Thursday in a short statement published by the Financial Services Commission.
The crackdown came from the new Virgin Islands Deposit Insurance Corporation with the FSC’s cooperation, according to the statement.
“The decision is based on established legal and regulatory frameworks to protect depositors and preserve stability in the banking sector in the territory,” the statement explained. “These steps demonstrate commitment and conviction to sound and prudent regulation that strengthens the financial services industry in the territory.”
VIDIC CEO Lisa Violet, who has headed the new agency since its launch last June, said in the statement that the VIDIC is responsible for protecting depositors against the loss of insured deposits within member banks.
“I am pleased at the level of cooperation we have received thus far from the local staff and senior management of Bank of Asia (BVI) Limited,” she said, adding, “We will provide updates on this process as developments warrant.”
The statement also quotes FSC Managing Director Kenneth Baker’s reassurances that the VI banking sector remains “stable, strong and resilient.”
“We are resolute that today’s action was necessary based on established regulatory requirements,” he said. “We remain committed to lending maximum support to VIDIC as per our statutory obligations, in addition to ensuring that the financial services sector in the territory continues to be well regulated and grounded in international best practice in banking and all other regulated activities within the scope of the commission’s mandate.”
Lorna Smith
This week, Junior Financial Services Minister Lorna Smith — a former vice chair of the Bank of Asia — echoed Mr. Baker’s reassurances.
“Over the past four decades, the BVI has built an internationally respected financial services sector, committed to global best practice and recognised transparency and regulatory standards,” she told the Beacon, adding, “We maintain absolute confidence in the quality and resilience of our financial system.”
Ms. Smith also downplayed her own involvement with the Bank of Asia, despite her LinkedIn profile naming her as a vice chairperson of the bank from 2019 up to the day regulators announced the wind-down last week.
“Thanks for bringing this up as the whole [LinkedIn] page needs to be updated,” she told the Beacon. “I resigned from my position as a director and [acting vice chair] of the bank from when I got elected [to the House of Assembly] in April of 2023.”
Mr. Wheatley expressed concern about the closure, but he referred the Beacon’s questions about it to the FSC.
“It is important to note that, under BVI law, the supervision and regulation of any bank operating in the BVI is the exclusive responsibility of the Financial Services Commission,” the premier stated, adding, “As the autonomous regulatory authority, it is for the FSC to determine what information to release and when, in order to protect depositors and maintain stability.”
Ms. Smith spoke similarly about the matter.
“Under BVI law — 2001 Financial Services Act — regulation and supervision of the bank is the exclusive responsibility of the regulator,” she told the Beacon. “The regulatory process is now under way, and it would not be appropriate for me to comment further.”
The Bank of Asia did not respond to requests for comment, and neither did Messrs. Baker or Walwyn.
Launch in 2018
In mid-2018, Bank of Asia (BVI) Limited — which was described as the territory’s first digital bank — launched with much fanfare under the leadership of Carson Wen, a Hong Kong lawyer who was the chairman and founder.
Officials have frequently described the bank as a solution to the de-risking that has affected banking services across the Caribbean in recent years.
At the time of its launch, the bank said it employed about 70 people in Asia and the VI, with a 24/7 customer call centre in Manila.
“Bank of Asia was licensed in the BVI in March 2017 to address the growing needs of offshore companies, their owners, individuals and families, providing core banking services to offshore companies as well as trusts and high net worth individuals and families from around the world,” the bank stated in a press release announcing a launch ceremony in July 2018 at Charlie’s Courtyard at The Moorings.
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