Ennia: Government pursues capital injection
June 7, 2023 –WILLEMSTAD – The Pisas government has chosen the option of a “capital injection” to address the Ennia issue, according to sources from the Council of Ministers.
Before proceeding, the existing committee assisting and advising the government on this matter will be tasked with further developing the specifics of the capital injection within a two-week timeframe. This includes determining the methods and funding sources to be utilized.
Four options are under consideration, with some carrying significant implications. One option involves a “mandatory deposit from the financial sector with an interest compensation.” The response of the financial sector to this proposal remains to be seen.
Two other options are connected to the Central Bank of Curaçao and Sint Maarten (CBCS): “dividend payments from the CBCS” and “utilization of a portion of the CBCS revaluation reserves.”
The fourth option aims to secure a capital injection through “financing via the capital market.” This decision was made during a Special Council of Ministers meeting held on Friday, with Ruthmilda Larmonie-Cecilia (PNP) serving as interim Prime Minister. It was recognized that deficiencies existed in the CBCS’s supervision responsibilities regarding the Ennia issue.
However, it is important to highlight that the Council of Ministers has decided that these efforts “will not interfere with ongoing and potential future legal proceedings” involving Ennia (represented by CBCS) and third parties. This includes ongoing lawsuits against Hushang Ansary, the American owner of Ennia, among others.
Court Verdict: In relation to an ongoing legal case, the Joint Court of Justice has announced that the verdict in the Ennia/Ansary case, initially expected on Tuesday, June 6, will be delayed. More clarity on the pronouncement of the judgment is anticipated after the middle of this month. This case holds significant, even crucial, importance for Curaçao.
The Court’s registry has informed the involved parties that the verdict in the liability procedure, filed by CBCS on behalf of Ennia against Ansary and other former directors, is “in an advanced stage.” An announcement regarding the timing of the judgment will be made after mid-June 2023.
The interests of at least 25,000 policyholders are at stake. In September 2020, CBCS requested a government stance on either a capital injection or a substantial reduction in pension payouts, due to Ennia being significantly drained by Ansary and his associates.
As a result of these withdrawals, a substantial deficit emerged in Ennia Leven. CBCS states that this deficit, which arose approximately two to three years after Ansary’s takeover and continued to grow in subsequent years, was concealed. It was only through emergency regulations and CBCS intervention in 2018 that a thorough investigation could be conducted to uncover the events under Ansary’s leadership and ascertain the actual financial position.
