Clico directors concerned at timing of Stabroek News article
The Directors of Clico are expressing concern at a June 9 Stabroek News article under the caption “Wind up Clico now” – van Beek advises.
They say that as directors they are miffed because of how the article was positioned at a time, just before a Court appearance on the said day, when there was a more current position on the petition before the court.
The directors say that they had expressed three weeks ago, that the judicial manager submitted her report and the attorneys-at-law appearing on behalf of Clico, respondent in the petition, have asked for an opportunity to respond to the Judicial Manager’s report.
To this end, they have requested certain financial and other statements, which will be considered in the preparation of their reply. This the directors outlined was the current position in relation to the matter.
They are questioning the motive behind such a late report and what purpose it would serve at this time.
The article, published yesterday, stated that Commissioner of Insurance, Maria van Beek, has recommended that Clico (Guyana) be liquidated now by the High Court saying that the time has arrived for a further order of court to wind up the insurance company.
Operating in the capacity of Judicial Manager of Clico, van Beek called on Chief Justice (ag) Ian Chang in an affidavit, in a report submitted late last month, to grant the winding-up order nearly three months after the company was placed under judicial management.
Van Beek, in the report to Justice Chang, noted that, “… in the light of all the foregoing and having regard to the previous affidavits and reports I have come to the conclusion that it is the best interest of all concerned that this honourable court now order the winding up and or liquidation of the company by due process of law…”
She said such further action is “inevitable”, and restated a previous request for the court to permit an order for sale of the businesses.
The report by van Beek noted that the original petition presented to the court had asked that there be “a winding up in the first instance and only as an alternative was the placing of the company under judicial management sought,” together with any other under Section 67 of the Insurance Act.
However, the court placed the company under judicial management and van Beek contended that given the facts and statistics then available, this would have been the correct course of action.
The report referred to the order of the High Court of the Commonwealth of the Bahamas on April 7, confirmed by the seal of its registrar on April 17, which authorised the liquidation of Clico (Bahamas) Ltd in which Clico (Guyana) had invested US$34 million. “This sum can now be treated as a loss, save for a probable return in years of less than 7% thereof, if no unforeseen eventuality arises,” the report said.
She also referred to an affidavit by Assistant Commissioner of Insurance, Tracy Gibson, which said that Clico (Guyana) has a deficit of over $1 billion, but noted that this is based on giving full credit for the company’s investment in the Bahamas. Taking into account the liquidation in the Bahamas, van Beek said the record should now properly show and be read as a deficit of over $7 billion.
“This is a serious defalcation and it is misleading for anyone to assert that any part of the company’s business is in surplus, the investments being made from the general resources of the company. If any surplus in the fund exists it is for the benefit of policyholders but that cannot be used to offset overhead and outstanding expenses”, the judicial manager added.