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“Frivolous court matter” hold up liquidation of Clico

Jan 27, 2010 News


– Jagdeo

President Bharrat Jagdeo yesterday blasted the court system over the handling of the winding up of failed insurance giant, Clico, which has $12 billion in liabilities, and some 2,000 policy holders waiting to be paid.
Jagdeo said that “a frivolous court matter” by lawyers for the company was holding up the court from liquidating the company and selling off its assets to pay policy holders.
According to Jagdeo, the company currently has over $3 billion in funds to pay policy holders, but that cannot be done.
“The court is allowing this matter to prolong unduly,” Jagdeo declared, mindful that there would be criticism of him trying to interfere with the work of the judiciary.
Jagdeo said that the government was desirous of selling off assets of the company. These include a new headquarters building on Camp Street, which has been given a price tag of $1.8 billion by valuator Hugo Curtis.
Clico’s Judicial Manager has denied claims by sources in CL Financial that the government has received a $500 million bid from Queens Atlantic – the owners of Guyana Times – for the Camp street property.
Jagdeo said the government is also seeking to get back the US$13 million Clico loaned to Chinese mining company, Bosai, and also the assets of CRL Holdings.
Jagdeo said that some of the monies collected from Clico when it sold its bonds in the Berbice River Bridge Company was paid out to some policy holders before the company was placed under judicial management.
Upon previous criticism from the government that the court action taken by Clico was holding up the payment of policyholders, sources within CL Financial said the company supports the early resolution of the case “but with the just and fair disbursement of funds to policyholders who held this company for decades.
The principles of the company are adamant that the assets which are now owned by policy makers must not be sold in a “fire sale,” meaning the assets must be sold for its true value.
The source has questioned why the government so anxious to liquidate the assets of the Trinidad owned company when the government of that country has given US$15 million to help pay the policy holders.
Since the collapse of Clico, the government of Trinidad and Tobago assumed legal control over the CL financial conglomerate – the parent company of the Clico chain in the Caribbean – this having total control over Clico (Guyana).
The Commissioner of Insurance Maria van Beek set the stage for the legal proceedings when she applied to the court to wind up the company, and the Chief Justice ordered the company be placed under judicial management. That was in early February last year when it was revealed that more than half of the company’s assets ($6.9 billion) were tied up with Clico (Bahamas), which encountered a financial collapse and was liquidated.
Clico Trinidad and its parent company CL Financial are now totally controlled by the Trinidad and Tobago government, which has since appointed their own chairmen and senior executives.
The government has more than once said that Clico’s legal challenge of the attempt to liquidate the company was holding up the payout to policyholders after the company failed.
However, the CL Financial sources who spoke with Kaieteur News indicated that Clico only entered an appearance in the court to save the company, if feasible, or, in the event of liquidation ensure that the assets of the company are not disposed as in a fire sale and ensure policyholders receive all funds due to them, and not now a percentage now and the remainder in bonds or other deferred payments.
The sources argued that the Clico crisis in Guyana was badly handled, since it was the only subsidiary placed under judicial management while the administrative executives who put the company in the crisis remain and are being paid “superfluous salaries.”

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