"Shares government NV's back to island-territory"

The shares from government NV’s must be returned to the island-territory through the Institute Implementation Privatization (StIP).

Since the institute is to be dissolved it will be succeeded by the Institute Bureau Supervision & Standardization (STBO).

At the same time notary Mike Alexander is concerned about who is to be appointed with this independent organization that is yet to be founded.
Alexander stated this during his lecture ‘The importance of good governance’, which he held within the framework of the L.B. Smith lunch lecture from the Business Association Curaçao (VBC). For years, Alexander has occupied himself with this subject, and he is considered an expert.

There was much discussion on StIP the past weeks, before the new Board of Governors decided that the institute would be dissolved definitely. Alexander gave two arguments why he finds that the shares should be returned. First of all, because at the time StIP was founded to privatize government NV’s, although the government has changed that policy now. As there will be no more privatization, there is no need to function as shareholder any longer. As second argument, Alexander finds it is up to the new government to decide what must be done with the shares from the government NV’s, and not the StIP board. “The government consists (indirectly) from chosen representatives and therefore has the right to take these decisions.” However, according to the notary, that does not mean the government is allowed to do whatever they want with the government NV’s. After all, these NV’s have stakeholders with interests, such as the employees, financers, trade unions and the companies doing business with the government NV’s. “It would not be correct if the government continues treating their companies as the goose with the golden eggs.” It occurred too often in the pasty that in a non-structural manner one had withdrawn money from the NV’s in the form of dividend, but also loans of which it was clear beforehand that these would never be repaid. “That is clearly against the rules of good corporate governance, and I don’t think one is asking too much that the government sticks to the rules which they implemented themselves.”

However, Alexander is concerned about the fact that the Institute Bureau Supervision & Standardization (SBTO) has still not been established officially, and that’s it very important the people who are to be appointed in this institute, are qualified and incorruptible. “They must be capable of giving advice objectively, because if they cannot, many good corporate governance rules will loose their value.” The speaker therefore wonders whether it’s not a good idea to have the Institute Government Accountants Bureau (SOAB) perform the task of independent advisor instead of appointing SBTO. “They have already proved themselves and their professionals do not buckle under political pressure.” Alexander, once interim governor, would personally feel more comfortable if SOAB would function as independent advisor for the shareholders instead of SBTO. However, in that case SOAB could no longer function as external accountant of government NV’s due to the ‘conflict of interest’.

Alexander further hopes the government will implement a dividend policy per NV as soon as possible, after advice from the independent advisor, such as laid down in the Island-regulation for Corporate Governance. “One must consider the necessary reserves and payment must not occur at the expense of the company.” Otherwise, the director of the relevant government NV would have to go to court to prevent this and Alexander hopes if that step is ever necessary, the relevant director with the support of the board, will have the courage to bring the government before the judge. “In conclusion, I urge the government to appoint the right people in the right position in the boards of government NV’s, professionals with a high degree of integrity and qualified to supervise, and to advise the management in an objective manner.”

(Source: National Newspaper Amigoe)

16 October 2010

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