Hand-in-Hand Trust Cor-poration (HIHTC) registered a profit of $20.1M for 2012 which saw the writing off $63M of impaired investments as the business continued to address the loss of a large sum when the Allen Stanford empire collapsed.
In its financial statements published in the Guyana Chronicle of May 4, the company said that several initiatives were pursued during 2012 to “enhance the viability of the institution and shall be continued during the current financial year”.
HIHTC, which offers a variety of services including such as residential and commercial mortgages and property and investment management, saw interest income rising from $295M in 2011 to $352M last year. Other revenue was substantially down from $364M in 2011 to $169M last year. There was no explanation in the statement for this.
Interest expense declined from $231M in 2011 to $196M last year. Profit before impaired investments was $190M in 2011 but only $91M last year. After the writing off of the impaired investment, profit before tax for 2011 was $106M compared to $28M last year. After tax, profit for 2012 was $20.1M compared to $98.4M in 2011.
HIHTC, which is a member of the Hand-in-Hand Group of Companies had deposits of $5.9B at the end of the reporting period.
In terms of share capital there was a redemption of $150M in preference shares and so the figure moved from $900M to $750M by the end of the year.
Back in 2009, the Hand-in-Hand Group of Companies lost its investment of over $1 billion in the Antigua-based Stanford International Bank (SIB), after the bank folded. The company said then that the “impairment” of its investment would not affect its operations. The company also indicated that it would make efforts to restore its capital adequacy ratio.
Last year, HIHTC was at the centre of controversy over how Jonathan Brassington, the brother of the Head of the Privatisation Unit, Winston Brassington came to take up shares in the institution.
They question was raised as to whether Winston Brassington’s brother – a US based entrepreneur in the IT sector – benefited from Winston’s knowledge before investing in HIHTC Trust. Winston Brassington rejected this and said that he did nothing either illegal or unethical with regard to insider information.
Winston Brassington is adamant that it was his brother’s investment that saved HIHTC from certain doom. He said his brother bought 30 per cent of the shares which meant that HIHTC still remained in control. Further, he said, Jonathan Brassington has received no dividends on the investment so far.
Winston Brassington said that in 2008 when Hand in Hand took the Stanford hit, its CEO Keith Evelyn held a press conference indicating that the exposure was $750 million.
He explained that because of this, HIHTC was not able to comply with the regulatory requirements of capital adequacy in accordance with the Bank of Guyana. He said it was imperative therefore that the company increase its capital. Winston Brassington said after HIHTC wrote off the money lost in the Stanford investment, “it is public knowledge that HIHTC was in serious trouble.” He said that the loss wiped out the company’s capital base.
Upon being questioned by Stabroek News, Winston Brassington insisted that there was no inside information.
