President deceived Guyanese in CLICO affair big time!
In Kaieteur News article, “CLICO meltdown…Republic Bank is safe – Jagdeo” (February 28), in which the President reportedly said that, had action been taken to immediately pull back CLICO (Guyana) resources from Bahamas, it would have precipitated the collapse of CLICO (Bahamas), we learn two things: 1) that CLICO (Guyana) was actually propping up CLICO (Bahamas), and 2) that since CLICO (Guyana) almost owned CLICO (Bahamas), then the prudent thing to do was to go ahead and precipitate the collapse of CLICO (Bahamas), because CLICO (Bahamas) collapsed anyway and Guyanese are the poorer for it.
Guyanese still don’t know whether CLICO (Bahamas) was actually investing in real estate in Florida at the request of Guyanese abroad or at home, or if investors included money launderers. Only a probe by the US authorities will reveal this, and I must say the US authorities are not like the authorities in Guyana – they go after everything and everyone.
The President, the Commissioner of Insurance and the Chief Executive Officer of CLICO (Guyana) all clearly failed investors in this mess because, in the first place, one report said that auditors, Deloitte and Touche, had noted in the 2007 accounts that CLICO (Guyana) was in breach of Section 55 of the Insurance Act which required that it invest 85% of its statutory fund locally. Another report charged that at one point CLICO (Guyana) had a 51% share and that, instead of the figure decreasing as per the instruction of the Commissioner of Insurance, the figure rose to 53%!
That was almost two years ago, long before last September’s global market collapse. So here are my questions:
1) What sort of penalty was levied against CLICO (Guyana) for violating the insurance rules and regulations, not merely as punitive action, but to force it to bring down its share to the compliable 15%?
2) Immediately following the start of the global economic meltdown, President Jagdeo assured Guyanese his government had a ‘firewall’ to protect the local financial sector from the effects of the meltdown. So did he meet with leaders of the local sector before making his bold ‘firewall’ claim, or was he giving a knowingly erroneous assurance?
3) Was the Commissioner of Insurance keeping the President abreast of foreign investments by local financial institutions after the global meltdown started last September? If not, why not? And if yes, what did the President do, or recommend in the intervening period?
It is not just a tragedy for Guyanese at home to lose their hard-earned investments and savings, but it is grossly irresponsible for the Head of State to be playing Mr. Nice Guy trying to assure local investors with his so-called ‘firewall’ that did not nor may not prevent future losses for one reason or other.
Perhaps using his now failed ‘firewall’ for support, the President had assured CLICO (Guyana) investors at a February 5 press conference that the government ‘was closely monitoring the situation and that their interests were protected’. Now that he was proven wrong, how can anyone trust his words today?
I think that after the CLICO fiasco there is no way Guyanese should put their blind faith in the President’s words when he now says that Republic Bank is safe, but they should seek answers directly from their investment houses. Ask for bona fide computer printouts of statements and compare them with those on file at home. Don’t rely on government to monitor anything!
I can understand the government is upset with a little known Guyanese blog for allowing a post that erroneously stated Guyanese depositors were making a run on the Guyana Bank of Industry and Commerce (GBTI), but to expend any amount of resource trying to find the villain of such a report, the President should be expending resources erecting a genuine ‘firewall’ by engaging experienced stakeholders. He should also just shut up, take a step back and let the investment houses handle their business, because his reputation has been shot big time!