The President should order checks be issued to investors and a criminal probe of CLICO now

Sep 16, 2010 Letters

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Dear Editor,
When the global economic collapse started in September 2008, and word started spreading that CLICO (Bahamas) was in dire straits having lost millions of US dollars in bad investments, President Bharrat Jagdeo went public in January 2009 with an assurance that CLICO (Guyana) was safe and that depositors had nothing to worry about.
In less than two weeks, CLICO (Guyana) went belly up as word got out that its US$34M investments in CLICO (Bahamas) were gone.
The President again went public and assured that local depositors will not lose a cent of their deposits, even promising that his government will pony up the money, reportedly as a loan to be repaid over a ten-year period.
Not long after, we learned that the Insurance Commissioner had taken over CLICO (Guyana), before being placed under Bank of Guyana supervision.
Up to this point, all we learned about CLICO (Guyana) itself was that it had exceeded the 15% limit allowed for overseas investments by 36%, and except for some ‘audit’, there was never a public enquiry into what activities CLICO (Guyana) was engaged in that caused it to lose US$34M.
Also, because the over the limit investment was a violation of the Insurance Act with a prescribed penalty for both the company and its CEO, at no time did anyone, whether the Insurance Commissioner or the CEO of CLICO (Guyana), both of whom knew about the violation, were ever charged under the Insurance Act.
And even after the insurance company admitted last week to engaging in illegal activities, the Government has not talked about bringing charges against anyone.
What is profoundly astounding throughout the entire saga so far, though, is the pivotal role of the Government in what has pretty much been a wholly private company that has been in major violation of the Insurance Act, and apparently with the full knowledge of the Government. And now that the President is set to meet with CLICO (Guyana) depositors on Thursday, September 16, the question that should be on every depositor’s mind is: Why are they meeting with the President? Why not a court appointed liquidator?
Yes, the President did promise depositors that his government would pay the money, so why does he still have to meet with them to discuss ‘the way forward’ when, immediately following the court’s ruling, he was supposed to have his Finance Minister authorise Bank of Guyana to start issuing checks to all depositors?
I am not a depositor, but as a Guyanese who has been extremely concerned about the President’s decision-making tactics in running the government and country, I would advise depositors not to be taken in by any more promises or suggestions from the President when they show up at the meeting.
And if there is any truth in reports that the Government is going to offer depositors’ government bonds in lieu of payments, they would especially do well to avoid that offer.
When CLICO (Guyana) was about to go belly up, ‘certain people’ whose Berbice Bridge bonds were being held by CLICO (Guyana) were able to secure those bonds when the New Building Society made a rush purchase of them, while others were not so fortunate.
Among the ‘not so fortunate’ will be those attending the Thursday meeting with the President, and it would do them well to ask the President how Berbice Bridge bond holders were able to secure their bonds from CLICO (Guyana) before the company collapsed.
That ‘insider trading’ type of behaviour, on top of Government’s failed assurance that CLICO (Guyana) was safe, to Government rushing to place the insurance company under Bank of Guyana without a public hearing or even criminal charges, cannot inspire confidence in anything the Government has to offer at this time.
In America, the US Government did tap into taxpayers’ money to bail out financial giants and major corporations that were deemed ‘too big to fail’, and even though I have not heard or read any of these corporations admitting in public or in court that their engagement in illegal activities resulted in investors losing billions of dollars, I am confident that such an admission alone would have resulted in the feds ordering a criminal investigation resulting in criminal indictments, prosecution and appropriate punishment, rather than the corporation and its questionable records being placed under the feds and away from public scrutiny.
The infamous Bernie Madoff who ran a US$65B Ponzi scheme was jailed for 150 years. Texas billionaire, T. Allen Stanford, the man behind the CLICO (Bahamas) debacle, was indicted in the US on June 25, 2009 for running a US$7B Ponzi scheme and his trial is still continuing at the time of this writing.
So I don’t know what manner of man is President Bharrat Jagdeo that he can show up at a meeting with CLICO (Guyana) depositors to discuss the ‘way forward’ when his government should be ordering a public investigation and bringing criminal charges now that CLICO has publicly admitted it engaged in illegal activities. Is it possible that his government is just as culpable hence the lack of criminal indictments?
To all Guyanese, but especially CLICO (Guyana) depositors, let it be made known to you that even if the Government paid the money from public funds, that is your money that is being used, so depositors are actually losing twice since that government money has to be replaced/repaid.
Mr. Editor, I can only hope that if there are depositors who insist on being paid rather than accepting any offer to buy government bonds, or any other government offer, that they don’t suddenly become targets of the Guyana Revenue Authority, because it seems to be more than just a regular collecting taxes/revenue agency. Some are of the view that it can be a political weapon of choice in the hands of government.
I close by saying that I still don’t know why there has to be a meeting or even why it has to be limited to depositors only, because since the Government is going to be using taxpayers’ money to pay these depositors, the least the public deserves is full coverage from the media about the nature of the talks, and the least depositors should be allowed is the right to walk with an attorney for legal advice based on what the President has to say.
I don’t even know if depositors will be allowed to ask questions. I really don’t like the smell of this one bit, the same way I don’t like how the Government smells, period.
Emile Mervin

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