Guyana’s financial crisis now a horror story

Apr 02, 2009 News

…the time has come for a criminal investigation at NIS – Trotman

News coming out of The Bahamas as it relates to monies invested by Colonial Life Insurance Company (CLICO) Guyana has now turned the local financial debacle into a horror story.
This is according to leader of the Alliance For Change, Raphael Trotman, who in an invited comment yesterday said that enough is enough and the time has come for a criminal investigation into the investment by the National Insurance Scheme into CLICO (Guyana).
According to Trotman, something is not right and it is now obvious that criminality abounded. He questioned who authorized the more than $6B investment into CLICO (Guyana) and how exactly the money reached out of the country into a private bank account in the United States of America.
He questioned why it is that the money could not have been utilised in a secure investment with guaranteed returns.
The liquidator of CLICO (Bahamas), Craig Tony Gomez, has indicated that a preliminary review of the contracts forwarded to him reveals that CLICO (Guyana) may have had policy contracts with its customers and then the funds were forwarded to CLICO (Bahamas), principally the Turks and Caicos branch.
“It appears that while the funds forwarded to The Bahamas were recorded in the records of CLICO (Bahamas), the cash actually appeared to have flowed into the United States of America bank account directly from Guyana…,” Gomez is quoted by the Nassau Guardian as saying.
He said that, unfortunately, the contracts entered into with CLICO (Bahamas) do not appear to have been standard policy contracts, but in many cases could easily appear to be the transfer of funds to The Bahamas that could easily be classified as related party loans rather than policies.
“I have received substantial evidence to support my view that most of the funds were received into a United States bank account,” Gomez says. “I am continuing to examine this matter.”
In his report to the court, the liquidator listed a number of concerns. Some of them include a shortfall in cash needed to meet claims; the asset base required to transfer the policy portfolio to a new insurance provider; transferring policyholders’ accounts to an established insurance provider; payment of claims received prior to February 24, last; funding of staff severance pay; sale of the Florida real estate investment; payment of a Turks and Caicos M$2.9 claim; and sale of annuities with shortfall in cash.
As requested, Guyana has since submitted its claim, which Gomez has confirmed receiving.
Guyana is claiming US$34 million in policies with CLICO (Bahamas).
As a result of the $6.9B investment in CLICO (Guyana), the National Insurance Scheme is losing close to $1M per day.
This is according to financial analyst and economist, Christopher Ram, who said this is so given that the income stream relevant to the principal investment is no longer operational.
Mr Ram said that the crisis in which the company has found itself is having a ripple effect on the financial sector and as such the President should refrain from reserving the CLICO (Guyana) issue to a mere three per cent of the financial sector.

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Guyana’s financial crisis now a horror story

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