At about that time, far from the small Caribbean island, George Soros, speaking at a Columbia University dinner, told the assembled guest: ‘We witnessed the collapse of the financial system. It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom. The consensus put the crisis down to the blatant failure of regulators, rating agencies and governments, compounded by a good dose of naturally greed.’
Barton was not George Soros. He could not compare his experience to that of the billionaire. Neither did he possess a personal fortune of twenty billion, nor the leverage of the investor’s Cayman Islands’ fund with its twenty five billion in assets, but Barton did not need Soros to figure out that the crisis was far from bottoming out. In time the crisis would surely run its course, the question was when, in five, ten or twenty years, it was anyone’s guess.
What Barton needed was a real plan. The opportunities were out there and with six billion mouths to feed the system would not simply grind to a halt. Providing the planet with food and shelter was a priority, as for the rest the situation would eventually stabilise itself and investors would get back to concentrating on the business of making profits by supplying people’s needs.
After a long night sitting in front of his Bloomberg and pondering his future he turned in. It was after eight in the morning when he rose and after a quick swim in the pool he drove into Roseau for breakfast. On arriving at his regular coffee shop he was surprised by the buzz in the air. There was not the usual laid back Caribbean atmosphere. Something was up.
‘What’s going on?’ he asked Josh, the owner, as he poured the coffee.
‘Haven’t you heard?’
‘What?’
‘The bank?’
‘Mr Smeaton’s bank.’
‘What about Mr Smeaton’s bank?’ he asked thinking there had been a robbery.
‘It’s closed!’
‘What do you mean closed?’
‘They’ve closed it, they’re looking for Stanford.’
Fuck me! Was Barton’s first confused thought, maybe there’s a run on the bank. He had heard nothing about Stanford and as for the Anglo-Dutch Commonwealth Bank it made no sense.
He gulped down the coffee and hurried over to the bank on the corner of Hillsborough Street. Outside a small but angry crowd jostled to read a notice scotched to the glass door.
‘What’s happening?’ he asked the police officer who observed the crowd attentively from one side.
‘They’ve closed the bank sir.’
‘Why?’
‘Something to do with Stanford.’
At that moment Sarah Kavanagh arrived.
‘My God Tom, have you heard, it’s terrible the news.’
‘What news?’
‘Haven’t you heard? Stanford is wanted by the FBI.’
‘Why?’
‘They say he’s swindled billions in America.’
‘What’s that got to do with the Anglo-Dutch?’
‘It seems like Malcolm had a lot of money deposited with them.’
‘Shit!’
‘You can say that again. I’ve got my money in the bank here.
‘Where’s Malcolm then?’
‘We can’t find him.’
‘Christ.’
Twenty four hours later to the consternation of many Dominicans Smeaton was still nowhere to be found as the Texan billionaire, accused of an eleven billion dollar fraud, made world headline news.
Barton worked his phone, as the FBI tracked the alleged fraudster, and scoured the net for details. His efforts were to no avail, details were few and far between. He found the first detailed press account in a copy of the previous day’s London Daily Telegraph, where curiously the story filled a good part of the sports section. It was more concerned with Stanford’s past than his present situation, confirming little more than what Barton had read in the newspaper’s Internet edition. The details of the events up to the moment he had absconded were scant. It seemed that Stanford, had been decorated with a ‘Antiguan’ knighthood for his contribution to sport, and owed his fame to his generous sponsorship of international sporting events, more specifically those organized under the auspices of the English Cricket Board, the sport’s governing body.
The Telegraph reported the billionaire banker, who had already been accused of bringing disrepute to English Cricket Board, arriving on the hallowed ground of Lord’s in a helicopter full of filthy lucre—twenty million dollars in cash, had gone missing and was actively being sought after by the FBI in connection with a massive fraud linked to his Antigua based bank.
Smeaton’s implication in the affair was unclear. All that was known was the rumour he had been seen heading out to sea on his motor yacht early the previous day. Apart from that it was impossible to obtain any precise information relating to the banker and more urgently the Anglo-Dutch Commonwealth Bank, now closed by the Dominican authorities pending controls related to its liquidity situation.
As to Stanford’s bank, headquartered in nearby Antigua, just one island away, to the south of Guadeloupe, all business had been suspended. Later that morning the television announced the fraud had hit the whole Caribbean region including nearby Venezuela.
Swindling billions had become an international pastime, thought Barton, little wonder the Telegraph had relegated the news to the sports section. Only a year earlier a rogue trader at the French bank SoGen had sent shock waves around the world for a mere five billion euros. But when it struck so near to home Barton shook his head, the world had become crazy.
What troubled Barton more was the idea the billionaire’s banking operations were linked to Smeaton’s bank. What other banks would be involved. Was there any link with the Irish Netherlands Bank in London and its Caribbean banking operations?
As the Anglo-Dutch Commonwealth Bank was besieged by very angry customers in Roseau, Malcolm Smeaton was aboard his luxury yacht anchored off the island of Guadeloupe, a few nautical miles to the north. There he was engaged in a life or death negotiation with a rich overseas Chinese entrepreneur, Francis Wang, whose business network represented a broad spectrum of Chinese companies. Wang imported and distributed a wide range of industrial products including airconditioners, agricultural machines, computers, power generators and electric motors throughout the Caribbean and Central America.
It was rumoured Wang’s nebulous links to Venezuela and Cuba played a significative role in China’s growing interests in the region. He was believed to have privileged links to certain influential members of the Central Committee and Politburo in Beijing, managing the family interests of his powerful patrons.
Wang now seized the opportunity to grab a major stake in Smeaton’s bank, in exchange for a secret bailout cobbled together and fronted by his Venezuelan friends in Caracas. Some twenty four hours later a spokesman for the Dominican government announced Smeaton's presence in Venezuela, where he had held meetings with government officials following a visit to Miraflores, the presidential palace. A spokesman for the Banco Central de Venezuela announced that Stanford’s banking operations in Caracas had been suspended, its funds seized to forestall any attempt to dissimulate them. Thus the money invested in Stanford’s risky deals by the Anglo-Dutch Commonwealth Bank were miraculously retrieved, held in safekeeping pending arrangements with the Dominican authorities.
On receiving the news and after speaking with Smeaton the Dominican prime minister immediately declared all accounts guaranteed and the bank would reopen for business as normal the following Monday morning.
An agreement was signed by the parties, whereby the Corporación Venezolana de Fomento para el Caribe, a Venezuelan state organisation for Caribbean development, would invest in a fifty-fifty joint venture with a Hong Kong based private equity investor to form a new financial holding in Roseau. The holding would control and recapitalise the Anglo-Dutch Commonwealth Bank, with Smeaton remaining as CEO.
The deal, to save the small nation from bankruptcy, was thus concl
uded with Dominica ceding the exploration and production rights to Venezuela of undersea gas and hydrocarbon reserves in the economic zone surrounding Isla Aves.
In effect Smeaton had been forced to cede the controlling majority in his bank, but he survived threat of instant ruin and possible imprisonment. The presence of a Venezuelan partner would not go down too well in the US, on the other-hand it would enable him to cosy up to the Chinese who were invading the island, thus opening up a whole new field of opportunities.
Chapter 12 CANNES
The Plan Page 12