Mar 03, 2009 News
Regulators must find the money – Jagdeo
Bahamas Prime Minister Hubert Ingraham, in apprising the Bahamian Parliament yesterday of the Clico debacle, stated that there appears to be no record available at this time on any investment from Clico (Guyana).
“It will be for the Liquidator to determine Guyana’s claim,” the Prime Minister said. He said that he had received several telephone calls from the President of Guyana, Bharrat Jagdeo, relating to investment of CLICO (Guyana) in its Bahamian counterpart following the announcement regarding the liquidation order of CLICO (Bahamas).
President Jagdeo had enquired about the 53 per cent of CLICO (Guyana) assets that were reportedly tied up in the CLICO (Bahamas) operations.
The Bahamian Prime Minister did acknowledge that Guyana’s claim does, however, represent a very serious potential impairment for the Guyana operations given that, since the liquidating move, Guyana has put its CLICO operation into judicial management.
Last night, President Bharrat Jagdeo said that he called Prime Minister Ingraham from Davos, Switzerland.
He said that the Bahamian Prime Minister told him that he was unaware of what was happening in Trinidad and Barbados but that he would have his regulators check on Clico Bahamas. He also promised to return a call to President Jagdeo.
President Jagdeo said that he did not speak with Prime Minister Ingraham again until Wednesday morning when news broke that the Bahamian liquidators had moved against Clico Bahamas.
President Jagdeo said that he was surprised and he expressed his surprise to Prime Minister Ingraham.
“The Prime Minister of The Bahamas said that he had asked his regulators to contact their counterparts in the other territories and that he was surprised that they had not called Guyana.”
Guyana’s Commissioner of Insurance, Maria van Beek was able to speak to the Bahamas regulators.
On the issue of the Prime Minister’s claim that he could find no evidence of Guyana’s money, President Jagdeo said that it is the duty of the regulators to find the money.
“If they fail to do so then there would have been a massive fraud and people would face the courts.”
However, the audited accounts of both Guyana and The Bahamas indicate that there was an investment from Clico (Guyana).
In his update to that Parliament, Ingraham said that CLICO (Bahamas) was petitioned into liquidation due to its insolvency on two counts, namely it was unable to pay claims of US$2.6 million in the Turks and Caicos Islands, and its liabilities were estimated to exceed its assets by at least $9 million, hence it was deemed insolvent.
He told the Bahamian Parliament that since 2004 CLICO began making excessive cash advances, called “loans to subsidiary”, to CLICO Enterprises Limited, and it appeared that CLICO never sought the required “no objection” from The Bahamas Registrar of Insurance Companies in connection with the Company’s investments, loans to subsidiaries or related party transactions.
“Indeed, in several prudential meetings from as early as 2004, 2006 and 2007, I am advised concern was expressed about this matter, and a request was made for information regarding all investments undertaken by the Company within and outside The Bahamas…
“In fact, at one of the 2007 prudential meetings, the Registrar of Insurance Companies demanded that the Company return the then $53 million invested in order to reduce the inter-company loan balances…
“The Company gave assurances that it would have, I am advised, but failed to do so.” He said that it was after the receipt of the 2007 audited financial statements in July 2008 that the extent of the real-estate investments was again highlighted, and in December 2008 a letter was sent to CLICO placing several requirements and restrictions on its operations.
In relation to whether Bahamian policyholders would lose their money, Ingraham told that Parliament: “It is still too early to determine whether or not policyholders will lose any money… However, it is quite possible that all the policies can be sold to a viable insurer here in The Bahamas, who can assume the business and provide the coverage that CLICO policyholders purchased without any loss to the policyholders.”
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