Sep 16, 2010 News Comments Off on CLICO properties up for sale again
Today, President Bharrat Jagdeo will meet with affected policyholders of Colonial Life Insurance Company (CLICO) Guyana to discuss the “way forward”. However, shadow Finance Minister Winston Murray said that this should not fuel any optimism.
According to Murray the Government has in the past behaved as though it is in no big hurry to ensure that the promise to the stakeholders be fulfilled.
What Jagdeo should be telling the policy holders is what mechanism and timeframe will be used to pay them, Murray said.
He said that on more than one occasion the Economic Services Committee requested to Minister of Finance Dr Ashni Singh to appear before that body to explain the government’s views on the whole debacle as well as how it plans to effect the promise made. Dr Singh, according to Murray, did not even respond to the request.
Murray said that at present (yesterday) it is a wait and see scenario and while he is waiting to hear what the president says he is not too enthused that the head of state will make any exciting announcements.
Meanwhile the Liquidators for the failed Insurance giant have commenced the liquidation process and have put up the immovable property for CLICO on sale.
In an advertisement listed on the ‘eprocure’ website it is stated that, “Pursuant to an Order of Court authorizing the liquidation of CLICO, tenders are hereby invited from interested persons for the purchase of the properties at 191 Camp Street, South Cummingsburg, Georgetown (with contents); Lamaha Street, Georgetown, (with contents); Lot 129 Irving and Laluni Streets, Georgetown (with contents); 52 Area “J” Lamaha Gardens, Georgetown (residential house and contents); 200-201 Camp Street, Cummingsburg, Georgetown (as is) and Lot 5 Block ‘1C’, East Half, Plantation Hydronie, Essequibo (land only).
Interested persons are asked to register with the company and can obtain Tender Packages containing the following information upon payment of $5,000 per property.
The information that will be provided include, A Letter of Authority to visit the premises; Draft Agreement of Sale and Purchase; The terms and conditions of the Tender; A Form of Tender that must be completed when submitting a bid; Details of the property including ownership documents, photograph and survey plan and a Copy of the Advertisement.
All tenders must be submitted by next week Friday
President Bharrat Jagdeo recently said that should they not receive favourable bids then the government may have to buy the properties.
Chief Justice (ag) Ian Chang on Friday, paved the way for Jagdeo to pay the policyholders who fell victim to the failed insurance giant when he ordered the company wound up. The Bank of Guyana was ordered to be the liquidators of the company.
Chief Justice Chang, in his ruling, said that the court finds that the total assets of CLICO (Guyana) do not exceed its total liabilities by any amount let alone by 25 per cent of the net amount of premiums received in respect of long-term insurance business for the preceding financial year.
The Bank of Guyana, which presently performs the functions of the Office of Commissioner of Insurance, in its affidavit stated that the statutory funds of CLICO (Guyana) were then illiquid.
“The report of Nizam Alli, Chartered Accountant showed that as at the 27th February, 2009, CLICO (Guyana) was in deficit of $7B at best and at worst $11B.”
The Judicial Manager’s report showed that up to the 28th February, 2009, surrender of policies amounted to $1.7B and in a later affidavit, she deposed that up to April 2009, within two months, 829 policyholders had surrendered their policies to the tune of $9.6B.
It was pointed out that Winston Ramalho, the director who represents CLICO (Guyana) in these proceedings, and his wife, surrendered their policies to the tune of $45M.
According to Chang, “The clear picture is not only that total liabilities of CLICO (Guyana) far exceed its assets but that the company is on a rapid decline… It does appear that this state of financial affairs was triggered by the illegal transmission of US$34M externally in favour of (Clico) Bahamas Limited, its sister company.”
It should be noted, according to Chang, that the Insurance Act does not allow any insurer carrying on long term insurance businesses to invest more than 15 per cent of its statutory fund outside of Guyana.
The US$34 million illegally remitted abroad represents about 53 per cent of the company’s total assets.
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