Barbados AG flags LIAT transparency concerns

The Barbados Auditor General has questioned the government’s continued lack of full disclosure about its investment in regional airline LIAT (LIA, Antigua). According to the Auditor General’s 2020 Annual Report for the Financial Year ending March 31, 2020, the Barbados government by that date had injected BBD214.3 million Barbadian dollars (USD171.1 million) in capital into the airline, but its real financial status was not adequately disclosed in its financial statements. “Since this agency has faced financial difficulties and other challenges, the amounts listed should have been representative of the fair value rather than the sums injected,” commented Auditor-General Leigh Trotman. “As a result, issues related to LIAT were not adequately disclosed in the notes of the financial statements.” Barbados is one of the cash-strapped airline’s four shareholder governments, the others being Antigua & Barbuda, Dominica, and St Vincent & the Grenadines. LIAT is currently under administration in Antigua and Barbuda where it is based. It had suspended its operations in March 2020 after years of financial difficulties were exacerbated by COVID-19. The airline owed creditors over XCD100 million (USD27 million) when it entered into administration in July 2020. The company is undergoing restructuring in an effort to stave off liquidation. It owed XCD119 million (USD44 million) on April 30, 2020 in severance fees and other entitlements to hundreds of retrenched workers from across the region. Last year, Antigua and Barbuda Prime Minister Gaston told the Caribbean Media Corporation (CMC) that a decision had been taken that would allow St. Vincent and the Grenadines and Barbados to turn over their shares in LIAT to Antigua and Barbuda for XCD1.00 East Caribbean dollar (USD0.37 cents) each. Trotman in his 2015 Annual Report already pointed to the lack of disclosure relating to financial arrangements, as required by International Public Sector Accounting Standards (IPSAS 8). Similar concerns were expressed in 2017 by the Office of the Director of Audit (ODA) of Antigua and Barbuda.