THE STATE OF PLAY

Apr 17, 2009 Features / Columnists, Peeping Tom

The President was very firm when he addressed the issue of Members of Parliament who had failed to submit their declarations to the Integrity Commission.
Despite the fact that the opposition was challenging the legality of the Commission and raising questions about its composition, the President of Guyana was insistent that the law was the law and it had to be complied with.
The same is true in respect to CLICO (Guyana). The law is the law, and in this instance the pertinent law is the Insurance Act, which provides limits to the funds, which may be invested outside of Guyana.
From all accounts these limits were breached and therefore CLICO (Guyana) is in breach of the law and thus should face prosecution.

A breach of the Insurance Act constitutes a criminal breach and the very Act provides for a Special Prosecutor to be appointed and for penalties for the offences.
Two areas of possible breaches need to be determined. The first, as mentioned above, concerns whether the limits in respect to investments of the statutory and/or pension funds were breached.
The second, and perhaps most serious, and one which can invite possible prosecution under the criminal laws of Guyana, concerns the annuities in respect to the almost seven billion dollars invested in the Bahamas.
The authorities in the Bahamas are claiming that these sums were not invested under standard insurance policies and appear at this stage to be more like inter-company transfers. In effect, what they are suggesting is that this $6.9 billion represented not an insurance investment but simply a transfer of proceeds from CLICO (Guyana) to CLICO (Bahamas).

The authorities in the Bahamas are also claiming that the company there is not licensed to issue insurance policies. They are therefore predisposed towards classifying the CLICO (Guyana) investment as unsecured, thus reducing Guyana’s hope of recovering this money.
The President of Guyana in defending the continued retention of the Chief Executive Officer of CLICO (Guyana) indicated that it was the CEO who was able to provide the policies that prove that the investments in the Bahamas were annuities.
If it is determined that the policies in the annuities are genuine then there has to be a challenge to the classification of these loans by the liquidator in the Bahamas. The President at his last press conference indicated that this was being done.

On the other hand, if these policies are bogus, then an explanation must be forthcoming.
It would therefore seem that a commission of inquiry would answer a lot of questions and should be proceeded with forthwith.
It needs to be explained that the principal function of the Court in the judicial administration process is simply to determine the best option for the future of the company. It is not the Court’s business to order any investigation.
The Court simply has to, upon receipt of the report of the Judicial Manager – which has been submitted, and after hearing all those whom the Court feels ought to be heard, decide what is the best option for the company.

However, in arriving at this determination, the Court would have to consider the amount that is likely to be recovered from the Bahamas, and in so doing, the classification of that investment is important.
The Court, however, is not likely to await the outcome of Guyana’s legal challenge in the Bahamas, and may therefore have to request an opinion as to whether the annuities in the possession of the CLICO (Guyana) with respect to CLICO (Bahamas) are valid documents.
It is not, however, for the Court to order any criminal probe. A criminal probe can be instituted without prejudice to the Commission of Inquiry, but in light of the fact that such an inquiry is now possible, it should await the outcome of the inquiry.

Parliament should move swiftly to have this commission appointed. It is unfortunate that other considerations are being inserted as part of the need for such an inquiry, but in the final analysis, the level of technical expertise on such a commission and the adequate autonomy are far more important than whether there needs to be also a similar inquiry into something that happened seven years ago.
The independence of the commission of inquiry is critical. The opposition should move forward with its motion and should insist on a panel of international experts to probe this matter.

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