ACCOUNT HOLDERS ARE RELIEVED

Stanford bank is saved by buyer

06-18-2009 | MARIJULIA PUJOL LLOYD

mpujolstar@laestrella.com.pa

The administrator of the bank said it will correspond to a judge in Dallas to approve the sale of the Panama branches

Panama Star PANAMA. The administrator designated by the US Security Commission to safeguard the interests of the Stanford Group, Ralph Janvey has announced that a buyer has been found.

Janvey said that on April 16 he received proposals from three consortiums wanting to buy Stanford Bank. One was Venezuelan, the other Colombian and the third Panamanian-American.

Before completing the preliminary prerequisites imposed by the US Security Commission and the Panama Bank Superintendent, one bidder retired.

Janvey did not disclose the name of the ultimate buyer, because a confidentiality agreement is in place, but everything will be revealed in due course.

The purchase will not take place until the contract is approved by a court in Dallas, Texas, and is ratified by the Panama Bank Superintendent.

The process can take several weeks to be approved and Janvey decided not to venture an approximate date.

Stanford Bank operations in Panama were suspended in February when the major shareholder the Texan Robert Allen Stanford was accused of defrauding hundreds of investors in Texas.

The Bank Superintendent decided to take Stanford into administration after its board of directors asked for its intervention when account holders started to take their money out.

Since then all the accounts in the bank have been frozen, creating problems for some clients, who were unable to have access to their funds and companies had to seek funds elsewhere to avoid bankruptcy. Some of them were in such bad shape that they did not have enough money to pay the payroll.

According to one administrator of Stanford Bank in Great Britain, once the sale of financial institution is completed, the process of giving the account holders access to their money will commence, after permission has been sought from US authorities.

Currently, representatives of Stanford Bank Switzerland are seeking permission from the United States to unfreeze the accounts.

Stanford Bank Panama has a capital of $228.6 million. The bank has been operating with a skeleton staff over the last four months collecting money owed to the bank and avoiding the depletion of the principal capital.

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THE STANFORD SCANDAL

Last February hundreds of investors woke up to news that they had lost all their savings after the US Securities and Exchange Commission (SEC) accused Mr. Robert Allen Stanford of operating a fraud centered on the sale of certificates of deposit from his Antiguan affiliate, Stanford International Bank Ltd (SIB).

According to the SEC complaint, Antigua-based Stanford International Bank lied to investors about where it was putting their money.

Instead of putting it into "safe" CDs as promised, the SEC says the firm invested it in "illiquid investments, such as real estate and private equity."

Stanford promised his investors too-good-to-be-true returns based on his own unique formula. But the SEC called those returns "improbable, if not impossible."

STAFF

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THE BANK

For the last 100 days accounts has been frozen at Stanford Bank, causing a lot of hardship to those who have all their money deposited in that financial institution.

By finding a buyer the bank will avoid liquidation and continue to trade in Panama, once it has the approval of the Bank Superintendent and a court in the United States.