Not a white Knight
In business, a “White Knight” is an entity that makes a takeover bid on a company on much more favourable terms than an earlier bidder – the “Black Knight”. The White Knight then, as did the Knights of yore with damsels, rescue troubled companies. Geeta Singh-Knight, who is back in the news with the resurfacing of the CLICO disaster, however, is no White Knight to any company in Guyana, by whatever definition of the term.
But she has been a most recalcitrant Knight as she remains on the Board of Directors of the Berbice Bridge Corporation and GuySuCo.
Very early on, when the CLICO scandal broke in the beginning of 2009, we noted in a February 9 editorial: “The local representatives in the financial sector rushed into a damage control mode with the reiteration of comforting sounds. The CLICO Guyana CEO, Geeta Singh-Knight pledged that CLlCO Guyana was a separate entity within the CL Financial Group, and none of its assets were intertwined with CLlCO [TRINIDAD] or CLlCO lnvestment Bank.”
Summoned by the Minister of Finance, Singh-Knight maintained that CLICO(GY) had “no investments or dealings with sister companies” .
We advised then that we take Knight’s assertion ‘with more than a bit of salt” and continued: “The warrants by CLICO’s CEO were quite amazing for a number of reasons… It strains one’s credulity to accept that a company that treated its insurance as a cash cow to finance its aggressive program of growth would leave cash in Guyana sloshing around. What has the CEO said about its short-term fund being $82M in the red or the billions invested in and owed by several CLICO affiliates?”
Very soon afterwards, it was revealed that as a matter of fact, CLICO Guyana had not only transferred US$34.5 million (GY$6.9 billion) to a CLICO branch in the Bahamas but had done so under patently fraudulent conditions by falsely stating it was done as ‘fixed deposits”.
In addition, the company had violated the law which stated that an insurance company could not invest more that 15% of its statutory fund outside of Guyana. Under the law, Singh-Knight should have been asked to prove in a court of law that she had no knowledge of the transactions. And if she could not then she would have had to face jail. At the very best, she would have been guilty of gross negligence in the fulfilment of her duties as CEO and a Director of CLICO.
The Commissioner of Insurance, in her role of Judicial Manager, declared: “The Directors and management of the Company operated either without a basic understanding of managing an insurance business or pursued a strategy that has resulted in significant losses to the Company….This has jeopardised the ability of the Company to meet its policyholder obligations.” While in the liquidation of CLICO’s assets (in which Singh-Knight was astoundingly allowed to participate and be paid) some small investors and policy holders in CLICO were reimbursed, billions are outstanding to others. In many instances, this includes the life savings of individuals.
But what has perturbed many individuals is that Singh-Knight has been allowed to escape any form of sanctions, as if she is coated with Teflon. But even more amazingly, Singh-Knight has been allowed to feed at the public trough as a Director of the Berbice Bridge and of GuySuCo, when thousands of Guyanese have suffered because of her negligence or criminal actions. She was appointed to the Berbice Bridge Board to represent CLICO, which had been one of the largest investors. That relationship, of course, has been sundered. The NBS bought out their shares. Why is Singh-Knight still there?
Her appointment to the board of GuySuCo in 2008 had been explained as ‘temporary’ to facilitate the use of her ‘financial expertise’ to restructure the corporation, which had begun to face difficulties. When the CLICO fiasco exposed the dereliction of her fiduciary duties and her gross incompetence, she should have been removed from both boards.
This situation must now be rectified immediately.