A Globe-CLICO probe would not absolve govt. of culpability for allowing CLICO’s criminality

Apr 17, 2009 Letters

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Dear Editor,
I refer to two news items in your newspapers. The first is, “Fireworks could spark at AGM over NBS Berbice Bridge investment,” (April 15), which dealt with the continued fall out from the CLICO (GY) debacle that is raising more questions than there seems to be readily available answers.
The biggest loaded double-barreled question I have at this time is: Given that Guyana has a small and underdeveloped economy and so the slightest movement of unusually large sums of money certainly is not supposed to escape the knowledge of the President, who is known for his overbearing micromanaging style, how could the President not know about the CLICO (GY) overseas investments and the New Building Society’s investment of GY$2.2B in the Berbice Bridge project long before the details of either investment became public news?
Taking my cue from what was written in the news article, Dr. Nanda Gopaul is Chairman of the New Building Society, Chairman of the GUYSUCO, and as Chairman of the Public Service, his office is physically located inside the Presidential Secretariat.  Ms. Geeta Singh-Knight was CEO of CLICO (GY) until a Judicial Manager took over, and is also Chairman of the Berbice Bridge project and a board member of GUYSCUO.
Now here is the kicker: CLICO (GY) was in trouble and about to tank as depositors made a rush to withdraw their monies, so who in CLICO (GY) informed the Chairman of the New Building Society about the tanking so that a decision was hurriedly taken by the NBS to invest GY$1.5B in bridge bonds held by CLICO (GY) for private investors?
Somewhere in this matrix of two people holding multiple posts, including inter-related posts to which they were appointed by the President, it is hard not to conclude there was some sort of a conspiracy on the NBS-CLICO-Bridge bonds move, just as it is hard to imagine the President was totally out of the loop on decisions taken there and also by CLICO (GY) to invest in excess of 15% (it actually had a 53% investment in CLICO Bahamas) in clear violation of Section 55 of the Insurance Act.
Is there anyone out there who wants to tell me that US$34M or GY$6.4B left Guyana’s shores in the form of investments, with a significant portion of that belonging to the troubled government-run troubled National Insurance Scheme, and the President was not apprised by his Finance Minister (who had to be apprised by the Insurance Commissioner)? The way the President is speaking about this issue gives the impression he is a distant party to what went down, but there are too many dots leading right back to him and his office that fail to exculpate him as being knowledgeable.
The second news item, “Government promises criminal probe into CLICO (GY) and Globe Trust,” (April 16), in which the President denies criminality in CLICO (GY), is it not quite obvious that the President is strongly delusional or oblivious to the rule of law or both?
I stand corrected at any time by anyone with more knowledge or information than I have, but if the Insurance Act was promulgated into law by Parliament, then doesn’t that mean that whatever rules or laws are contained in the Act have to be viewed on par with all other existing laws? So, if Section 55 of the Insurance Act says insurance companies must not invest more than 15% of their funds overseas and Section 9 of the same Act says companies in violation of any rule must be fined GY$1M instantly and GY$100,000 a day for as long as the violation persists, then why wasn’t CLICO (GY) held criminally responsible for having a 53% investment in CLICO (BH).
In fact, why didn’t the Insurance Commissioner, who now serves as the Judicial Manager of CLICO (GY), take punitive action against Ms. Singh-Knight and CLICO (GY) when it was first known in 2007 that both the CEO and the company were not playing by the rules? By my simple calculations that would have been almost GY$40M in fines for the CEO and CLICO (GY), plus prison time for the CEO! Yes, the rules do call for prison time for insurers who persist in breaking the insurance laws.
Moreover, given the amount of money involved, but especially with a large sum from the government-run NIS, how could the Finance Minister and President not know? Is it not because of this very NIS-related issue that Chairman of the NIS Board, Dr. Roger Luncheon resigned, only to have the President tell him rescind it?
This CLICO (GY) crisis and its spin off effects will eventually come down to a question of public trust or confidence – whom to believe; and right now the President and his people are not looking  good, no matter how much they keep spinning their tales.
If a poll is done of Guyanese today I am confident most will say the President’s attempt to bundle Globe Trust and CLICO (GY) in a criminal probe is nothing more than an desperate attempt to spread the blame for gross irresponsibility so the government does not come out alone looking bad. But at the end of the day, even if there was criminality in Globe Trust, the fact remains that the government cannot use any criminality by Globe Trust to excuse the criminality of CLICO, because while it had a chance it did nothing to stop the criminality of CLICO (GY)’s violation of Section 55 of the Insurance Act.
Emile Mervin

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