August 2, 2023 –WILLEMSTAD – In December 2019, Girobank on Curaçao closed its doors, but a Deloitte investigation report reveals that there were already questions about the bank’s management as early as 2010. What will happen with the results of the investigation?
Last week, the Central Bank of Curaçao and Sint Maarten (CBCS) received the investigation report on Girobank N.V. and shared it with the Minister of Finance of Curaçao, Javier Silvania. The report provides a comprehensive overview of all the facts leading up to the collapse of Girobank.
Independent investigation report
The independent investigation report was prepared by Deloitte Forensic & Dispute Services B.V. in the Netherlands, commissioned by the CBCS and the Curaçao government. In October 2020, Deloitte was tasked with investigating the affairs of Girobank N.V. prior to and during the emergency measures, including the period leading up to and surrounding the bank run.
The report does not draw conclusions or qualifications regarding the actions of those involved. For the Central Bank, it is crucial that the facts are carefully examined and that lessons can and should be learned from them. The Central Bank has stated that it will first discuss the report internally to determine the next steps.
A lingering tragedy
Anyone looking at the report will see that the demise of Girobank has a long history. This history is now thoroughly documented. However, it is striking that the tragedy has endured for so long.
As early as 2010, the Central Bank noticed something strange when Girobank acquired a new major shareholder, IIG Capital, that year. The investigative report reveals that the Supervision department of the Central Bank (as later turned out, rightly so) already had questions about the involvement of CEO Eric Garcia.
According to Dagblad Extra, the sale to IIG brought in a group of mafia bankers as new shareholders who invested nothing but took millions from the company.
‘Bank run’ The story is familiar: Since 2013, Girobank has been under an emergency measure of the Central Bank due to financial mismanagement. In 2019, the bank closed its doors. This happened after a ‘bank run’ on December 9, during which all branches and bank accounts were closed.
This caused panic among customers. Some had to be removed by the police. Three days later, a maximum withdrawal limit of 10,000 Naf was set, and the bank briefly reopened under strict conditions. After that, the doors remained closed.
Former State Secretary Raymond Knops (Kingdom Relations, CDA) expressed dissatisfaction in 2020 about how the situation with Girobank was handled on Curaçao. For the settlement of Girobank, the Netherlands has provided an interest-free loan of 170 million guilders.
Gi-Ro Settlement Holding (GSH) was established at the end of 2020 to manage the loan portfolio. Individuals and companies that have outstanding loans are required to repay the money. With the proceeds, the trustees are trying to partially repay the loan from the Netherlands.
For many people on Curaçao, it is now time to look at who made the biggest mistakes during that long period between 2010 and 2019. One person is already in custody: in May 2019, the then 78-year-old former bank director of Girobank, Eric Garcia, was convicted on Curaçao for embezzlement of 11 million dollars, forgery, and money laundering.
Garcia was the director of Girobank on Curaçao. He received the sentence because, as a trustee in the bankruptcy of Banco Maracaibo in 2010, he independently transferred a total of 11 million dollars to various foreign bank accounts.
Then, it was used to buy Girobank shares from the dubious investors of IIG. And precisely that led to the first questions from the supervisory Central Bank as early as 2010. An important question now is: why was there no intervention earlier?
‘Independent investigation report’
The investigation report was prepared by Deloitte Forensic & Dispute Services B.V. in the Netherlands, commissioned by the CBCS and the government of Curaçao. In October 2020, Deloitte was tasked with investigating the affairs of Girobank N.V. prior to and during the emergency measures, including the period leading up to and surrounding the bank run.
The report does not draw conclusions or qualifications regarding the actions of those involved. For the Central Bank, it is crucial that the facts are carefully examined and that lessons can and should be learned from them.