Latest update April 18th, 2024 12:59 AM
Mar 27, 2009 Features / Columnists, Peeping Tom
A government guarantee is as good as it gets. Any investment backed by a government guarantee is considered extremely safe because Governments can usually be relied upon to honour their guarantees.
The President of Guyana has issued a guarantee to all policyholders in CLICO (Guyana).
He has given his word that no one will lose money, and this has reassured the thousands of Guyanese who still have investments in that company.
This guarantee has so far only been backed by the President’s word and not by any commitment to use the resources of the State should CLICO (Guyana) be unable to find the money to pay its claimants.
If taxpayers’ monies are going to be used to guarantee the investments of CLICO (Guyana)’s policyholders, then the least that should be expected is full transparency about the true state of affairs of the company and more importantly, just what took place prior to the move towards the Courts for judicial administration.
The taxpayers of this country need to be assured that there was no jiggery-pokery involved in this matter.
The taxpayers of this country should not be expected to bail out a company unless answers are provided to a number of questions.
One of these questions concerns whether the guarantee given by the government is self-serving.
This is why this column has insisted that in light of some of the concerns that have been raised in relation to the takeover in Trinidad of CL Financial, there needs to be a fully transparent process involved and that this should begin with all the members of the Cabinet declaring whether they had any financial interest in the company prior to or after the move towards judicial administration.
Why is the Government of Guyana moving to guarantee the investments of all policyholders? Is it that it is so concerned about these policyholders?
Or is it that friends of the government and the ruling party have investments sunk into CLICO (Guyana) and were not able to get these investments out in time?
Is it true that certain persons were able to get their monies out because there was a leak of information about the move towards judicial administration?
Is it true that among the persons who got their monies out was a senior official of CLICO (Guyana) and an adviser to the government?
Taxpayers also need to know to whom the monies from the sale of CLICO (Guyana) bonds in the Berbice River Bridge went. We are told that it went to pay claims. Well that is an inordinately high value of claims to have been paid and thus there needs to be an investigation as to who got their monies out so that it can be determined whether there was any inside trading of information involved.
The Parliament of Guyana has passed a motion dealing with CLICO (Guyana). That motion calls for a parliamentary oversight committee to monitor developments.
That committee should demand the identities of those who withdrew their investments just before the move to judicial administration, as well as those who were in the process of so doing.
This will assist in establishing whether indeed it is true that friends of the government got their monies out in time and whether there was anything irregular about such withdrawals.
The government should also explain the sale of CLICO (Guyana)’s bonds in the Berbice River Bridge. This interest was sold to the New Building Society at a time when the government knew that CLICO (Guyana) was in deep problems.
Why did the government not stop the sale? As a member of the Board of Directors and as the custodian of the NIS investments in CLICO (Guyana), the government ought to have stopped that sale.
The NIS has billions invested in CLICO (Guyana), billions which are now impaired because of what has happened in the Bahamas.
The government knew that CLICO was in problems at the time CLICO (Guyana) was allowed to sell its bonds in the Bridge.
The government should have intervened and stopped that sale because instead of those bonds passing to the New Building Society, it should have been passed to the government so as to secure the NIS investments, which are imperiled in Bahamas.
At least the NIS would have had the assurance of knowing that a significant portion of its investments were secured by these bonds in the bridge.
No one, so far, has asked the President of Guyana why it was that the government did not take possession of CLICO (Guyana)’s share in the Berbice River Bridge, which would have mitigated some of the losses that are now likely to accrue to the National Insurance Scheme.
Why was this sale allowed to go through? Why were the NIS interests not protected by blocking this sale?
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