By Tusika Martin
Republic Bank (Guyana) is a very ‘solid institution’ which does not have much of its investment abroad, President Bharrat Jagdeo said on Thursday, while addressing the issue of Government’s takeover of CLICO’s assets.
When asked about the exposure of Republic Bank to the recent meltdown, the Head of State said that the bank is one of the ‘strongest’ in the country.
“Republic Bank here in Guyana and in Trinidad and Tobago is not in any way exposed to the CLICO group,” the Head of State said.
Speaking about the shares that CLICO had in the bank, the President said that the Government of Trinidad and Tobago has made it clear that it was taking over all shares in Republic Bank.
“Those shares are now owned by the government of Trinidad and Tobago…Once it is owned by a sovereign nation, then that’s a very solid kind of investment…It’s the best kind of investment you can have.”
Addressing the issue of CLICO’s assets, the Head of State said that there was an examination of the company’s assets.
The assets were more than the liabilities, he noted, explaining that CLICO (Guyana) has a long list of properties.
According to Jagdeo, had action been taken to immediately “pull back these resources from Bahamas” then that would have precipitated the collapse of CLICO (Bahamas).
“We probably would have been more exposed because they simply did not have the money as the regulators in the Bahamas should… They did not have the money to make the payment to CLICO (Guyana) based on its investments…What they have is this real estate in Florida.”
The President explained that, unless the real estate is sold in the United States, CLICO (Bahamas) will not be able to meet the claims.
“Until now we are still hopeful that the real estate could be sold…From the last evaluation it seems as though it can cover most of the liabilities of CLICO (Bahamas)…We are still talking to the regulators there, and we still hope to recover that money, but right now it’s all tied up in real estate.”
President Jagdeo pointed out that regulators generally have to operate below the radar, adding that they cannot operate through the media since they are dealing with people’s private accounts.
This, he said, does not mean that they are not aware of the happenings of the financial sector.
Before CLICO (Bahamas) moved to the court, the President said, CLICO (Guyana) was trying through the regulator to have the land in Florida assigned to CLICO (Guyana).
“We were in the process of working that through but before that took place the Bahamian regulators moved in, because they obviously thought that they had to protect Bahamian policyholders …so that triggered us here having to move swiftly,” the President said.
Commissioner of Insurance, Maria van Beek, on Thursday successfully took control of the assets of Colonial Life Insurance Company.
According to an order by Acting Chief Justice, Ian Chang, CLICO (Guyana) is to be immediately placed under Judicial Management until the Court otherwise orders.
The Commissioner of Insurance has been appointed Judicial Manager for the purpose of Judicial Management.
The Bahamian regulator announced on Wednesday that it had obtained from the courts a winding-up order in relation to CLICO (Bahamas) Ltd., previously known as British Fidelity Assurance Ltd.
This action was taken in order to protect the interests of the policyholders of the company after failure by the principals of CLICO (Bahamas) to inject additional capital and liquidity into the company, despite many months of urging and directing by the Bahamian authorities.
On January 30 last, the Trinidad and Tobago authorities announced moves to take control of three subsidiaries of the CL Financial Group, namely Colonial Life Insurance Company (Trinidad) Ltd., CLICO Investment Bank Ltd and British American Insurance Company (Trinidad) Ltd.
This was necessary as the financial condition of these entities threatened the interests of depositors, policyholders and creditors of these institutions, and posed dangers to the financial system of Trinidad and Tobago.
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