By Melanius Alphonse From Caribbean News Now

Wannabe mainstream leaders, like Trump 2.0, Saint Lucia edition, supported by a succession of ‘dumb deals’, brash and boastful overtures, have done serious harm to the future of Saint Lucia’s economic path.

Further, the facilitation of so-called potential investments, public or private, offshore financial services that are driven by policy favours are either a major gift to reward corporate entities, foreign governments and agents peddling influence for shady dealings.

In January 2017, an independently-owned financial advisory firm, the DeVere Group, announced the acquisition of the St Lucia-based private banking arm of Arton Capital.

The bank is called DeVere Group Bank St Lucia and, according to DeVere Group chief executive Nigel Green, it will directly provide private international banking services for its clients, and corporate banking solutions to small businesses.

However, in May 2017, Bloomberg reported that the DeVere Group, which says it has attracted $12 billion in assets, including more than $500 million in the US, was under investigation by the US Securities and Exchange Commission (SEC).

According to the former employees, the firm for years charged upfront commissions on some investments, even though its SEC registration didn’t allow such fees.

Among the investments DeVere sold in the US were structured notes from banks including Goldman Sachs Group Inc. and Morgan Stanley, according to the former employees. DeVere received a 4 percent upfront commission, the former employees said.

Because DeVere registered with the SEC as an investment adviser, not as a brokerage, its employees aren’t allowed to collect commissions.

Goldman Sachs said the bank terminated its distribution relationships with DeVere in 2016, declining to say why. Morgan Stanley declined to comment.

According to Bloomberg, DeVere has a history of run-ins with regulators. In 2008, a Singapore subsidiary was fined for using unlicensed advisers and selling insurance products outside its license mandate, according to a statement by the city-state’s regulator. The firm closed the office that year.

In Hong Kong, a former DeVere subsidiary was fined HK$3.1 million ($398,000) in 2016 for breaches including using unlicensed advisers and failing to hand over information to a local regulator. Green had already acquired another firm, Acuma Hong Kong Ltd, and he now uses that brand there instead of DeVere.

DeVere is on a list of firms published by Japan’s regulator that aren’t authorized to solicit investors. It was previously on a similar list in Thailand. Its US subsidiary stopped providing some pension advice last year amid a regulatory review.

South Africa’s Financial Services Board is also investigating DeVere, according to Nokuthula Mtungwa, a spokeswoman for the agency. Ross Pennell, a former manager of DeVere’s Cape Town office who said he’s been contacted by the regulator, said the probe concerned fees and disclosures. He said clients weren’t told about some of the commissions they were paying or that some investments locked up their money for years.

Green, a British stockbroker, started DeVere in Hong Kong about 15 years ago. He previously had worked at offshore brokerage Britex International, which ran into trouble when a high-yield fund it had been selling stopped paying investors, according to reports in the Financial Times. DeVere bought Britex in 2002, International Money Marketing reported.

The fund in question — Imperial Consolidated, along with an associated bank in Grenada, Imperium Bank, which was taken over by the Grenada government — collapsed in the early 2000s owing investors hundreds of millions of dollars.

Therefore, the central policy and regulatory question is what is this bank doing in Saint Lucia?

What due diligence, if any, was conducted by the responsible regulators, including the Financial Service Regulatory Authority of Saint Lucia and by extension the ECCB?

In March 13, Proven Investments Limited (PIL) indicated that it has completed purchase of the Bank of St Lucia International Limited (BOSLIL) from East Caribbean Financial Holding Company Limited (ECFH).

“Simultaneous with the completion of the acquisition, PIL said it entered into a share sale agreement with Ryan Devaux, who has been head of BOSLIL since September 2005. Under that agreement, Devaux acquires 17.18 per cent of the shares of BOSLIL and PIL holds the remaining 82.82 per cent.”

[More on this in a future article.]

In a commentary dated April 17, 2017, “Saint Lucia’s strategic realignment“, I reminded avid readers about Prime Minister Allen Chastanet’s impressive amount of ineptitude, immense lack of credibility and thin covering of respectability amid enablers of ‘steering’, ‘kleptocracy’ and ‘ignorance’ in St Lucia.

“In fact, everyone concerned about our democracy should focus on the Chastanet administration’s strategic repositioning, operational stereotype and projected purpose… history reveals the path is open for expansion of political corruption and kleptocracy.”

“Shaping this thinking, the accompanying strategy and policy is part of the doctrine of rebranding and reallocating,” major statutory boards, finance, investment, CIP, and regulatory instructions.

How did all this happen?

“One universal goal reveals three transformations that equate to elections and democracy. First, the reconfiguration of policy; second, the merger of forces; and, third, formulate so-called re-alignments, incompatible with the structure of government that dramatically change the policy agenda.”

This obvious fact is potentially justified after the campaign that elected Chastanet’s administration and an ill-defined cabinet that permits a prime minister with the additional responsibility for finance, economic growth, job creation, external affairs and the public service.

By and large, idealizing past flashy successes deficient of an overall grand strategy, does not look promising, to which I have suggested Saint Lucia needs a renaissance.

However, the irony is that many financial and policy pitfalls continue to impede an incompetent administration that is prone to volatile and, ignorant governance.

So, bear in mind the central policy questions:

• What is this bank doing in St Lucia?

• Is this bank expected to build on the ‘reputation of investors’ to provide returns on investment in the regional and international place, operating from the safe haven of Saint Lucia, albeit blacklisted as a tax haven by the EU?

• Is DeVere Group Bank of St Lucia, incorporated in Saint Lucia as an International Business Company (IBC) pursuant to the International Business Companies, Cap.12.14 of Saint Lucia?

• How did this happen and by whom was it facilitated?

• Are the prime minister’s chaotic mind, policy and governance providing more justification to the inquiry, what is this bank doing in St Lucia?

• What sequence of events would have prompted DeVere Group Bank of St Lucia, when Bank of Saint Lucia International Limited (BOSLIL) was either in the process of a sales agreement and eventually sold to PIL?

• How is DeVere Group Bank of St Lucia going to impact domestic and international banking alongside its many troubling issues and not influence the country’s financial marketplace?

• How about correspondent banking relations in the Caribbean?

• And, who are the domestic armchair players behind this Bank?

Perhaps only those who approved and provided extraordinary coordination across legislative and regulatory hurdles know the unequivocal truth of the consequence Saint Lucians expect to face. An incapacity that is not new.

Melanius Alphonse is a management and development consultant, a long-standing senior correspondent and a contributing columnist to Caribbean News Now. His areas of focus include political, economic and global security developments, and on the latest news and opinion. His philanthropic interests include advocating for community development, social justice, economic freedom and equality. He contributes to special programming on Radio Free Iyanola, RFI 102.1FM and News Now Global analysis. He can be reached at [email protected]

For more on this story go to: http://wp.caribbeannewsnow.com/2018/01/09/commentary-devere-group-st-lucia/