Mar 31, 2017 News
Eight years after regional insurance giant, Colonial Life Insurance Company (CLICO) went belly-up sending shockwaves through Guyana and the Caribbean, the man that was in the middle of it, Lawrence Duprey, is apologizing.
Duprey, the major shareholder of parent company CL Financial, is now interested in investing in Guyana, and hopes that sometime in the future, a resolution could be reached on how Guyana can recoup more than $5B that his company owes.
Guyana, under the previous two administrations of the People’s Progressive Party/Civic (PPP/C) wrapped up bankruptcy proceedings here, taking over a number of buildings and using tax dollars to pay off thousands of policy holders.
Last week, Minister of Finance Winston Jordan met with Duprey. A statement from the Minister’s office indicated that: “The Minister of Finance, Hon. Winston Jordan last Thursday held a meeting with Lawrence Duprey, Chairman of C.L. Financial and other officials of that company. During the meeting Mr. Duprey indicated to Minister Jordan that he would like to renew his relationship with Guyana as well as publicly apologise to its people for the collapse of CLICO Guyana.”
According to Jordan, Duprey also said that CL Financial will try to make amends for the approximately US$40M debt owed mainly to the National Insurance Scheme (NIS).
It was money from the NIS that was invested in a subsidiary of CLICO in the Bahamas that has been until now lost. The money had represented losses of income for NIS and severely threatened the scheme’s long-term viability.
Duprey is apparently eyeing the financial and housing market in Guyana. The Trinidad government has become involved in CLICO to keep it alive.
“Duprey, the majority shareholder of CL Financial also informed Minister Jordan that his company is interested in investing in several areas here, including providing solar energy at competitive prices, affordable housing, clay brick and solar for housing as well as introduce a financial model that will generate savings and alleviate poverty,” the statement from the Ministry of Finance said.
It was also disclosed that Jordan, in response, informed Duprey that he will apprise Cabinet of the discussions.
“He also advised Mr. Duprey that future engagements could be conducted on parallel tracks: discussion on recovering monies owed by CL Financial and investment in Guyana.”
Both the Minister of Finance and Mr. Duprey and his team agreed to a follow up meeting. “Meanwhile, the Governor of the Bank of Guyana, Dr. Gobind Ganga will be consulted to determine the status of all outstanding matters relevant to CLICO Guyana.”
It will be recalled that late last year, Government announced a $5.6B long-term financing for NIS to help the entity recover its investments in the now bankrupt CLICO.
NIS is facing a tough future as its revenues have started to fall. This is because of a dwindling number of contributions from self-employed and other categories.
While it has almost $30B in its accounts, payments for pensions and other expenses have been outstripping collections, leaving deep worry about long term viability. A growing number of pensioners are not helping the situation too much.
In May last year, Minister Jordan had stated that going to court to recover the $5B-plus for NIS may be useless. He had emphasised that the sad reality is that the CLICO situation might very well turn out to be a long drawn-out process, as Guyana is not even on the radar when it comes to the settlement process in the Caribbean as yet.
”So Government is going to have to step up to the plate and find another way of recouping the losses for NIS in this regard. Government gave a commitment in this regard, and it will have to make good on its promise to find a resolution on getting back the money. And this is yet another mess that we inherited from the past administration that we are saddled with fixing with money that could have been put to better use,” the Minister said then.
Government, in 2009, seized local properties from CLICO in Guyana to help pay policyholders, after it became clear that the regional insurance giant was in dire financial problems. Some 7,744 policyholders were paid a total of $4.1B.
One of the properties that NIS received was the one on Camp Street where the current headquarters of the Guyana Revenue Authority sits.
How NIS decided to invest US$30M in CLICO, an amount that was later transferred out of the country under questionable circumstances, has never been answered.
Several big policy holders were allowed to cash in and recover their monies, including close associates of the former PPP/C government.
Despite complaints, both the Jagdeo and Donald Ramotar administrations had refused to carry out an inquiry similar to investigations being done in Trinidad, where angry politicians had called for heads to roll.
In 2010, the CLICO Bahamas Liquidator reported that his “preliminary view of the documentation suggests that policies were never issued by CLICO Bahamas. Moreover, the premiums received from Guyana and Suriname were never paid to CLICO Bahamas.
”It appears that the funds were remitted directly to a bank account held in the name of CLICO Bahamas at Ocean Bank, Miami, Florida, and to another account held by the company in Trinidad.”
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