Maroc - NEWSDAY.CO.TT - A la Une - 05/Sep 08:08

The Government in public companies

THE EDITOR: The recent replacement of the FCB board reflects a concerning shift that signals disregard for minority shareholders and raises questions about the independence of governance in public companies where the government holds majority stakes. Such actions can erode trust – not only in FCB but across similar institutions – particularly in prominent financial entities like Republic Bank, raising speculation about potential board changes there as well. The government’s apparent goal of increasing control – aimed at raising the ceiling for lending to the state – comes with significant risks. While greater lending might temporarily boost government finances, it also heightens the risk of repayment failures and credit strain on the banks. Simultaneously, this focus on state borrowing could reduce funds available for lending to private customers, stifling economic growth and limiting credit options for businesses and consumers. Reduced confidence in the banking sector can trigger depositors to move their funds elsewhere, leading to decreased liquidity and further financial instability. For shareholders, this often translates into lower or stalled dividend payments and a decline in share value. Institutional investors who rely on consistent dividend income to fund pension plans or other investments could face reduced returns, impacting long-term financial security. Ultimately, while the government seeks to strengthen its financial control, it must balance this strategy with robust governance, transparency and measures to maintain stakeholder confidence. Failing to do so risks deepening economic instability and undermining the stability of our financial institutions and broader economy. GORDON LAUGHLIN Westmoorings The post The Government in public companies appeared first on Trinidad and Tobago Newsday.