Jagdeo dodges questions on PPP’s hijacking of NIS

Dec 19, 2018 News

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At his most recent press conference, former President Bharrat Jagdeo skirted questions regarding how the People’s Progressive Party/Civic (PPP/C) regime had usurped the decision making responsibilities of the National Insurance Scheme (NIS).
A forensic audit carried out under the coalition government noted, among other things, that the PPP/C cabinet made all decisions on major investments to be made, then passed on those decisions to the Board. This was done in violation of the NIS Act.
When asked about this at his press conference on Monday, Jagdeo said, “Who did the forensic audit again? I am not commenting on these forensic audits. Anand Goolsarran went into the Ministry of Finance and handpicked which one he wanted.”
Jagdeo continued, “I don’t, I don’t… I don’t know. I cannot comment in a technical way because I have not read it.”

However, while he chose not to comment on the usurping of responsibilities, Jagdeo was keen to speak about the investment NIS made in CLICO.
Jagdeo said he hears lots of talk about the CLICO investment “and it is not a loss, the money is not lost. We guaranteed the repayment and that is why the money from the sale of CRL and from the escrowing of the money through Bosai should be used to take care of all of NIS investment in CLICO without recourse to the Treasury, tax payers’ money.”
Jagdeo continued, “They do not give that complex explanation, you just hear ‘oh we invested X amount of money in CLICO.’ But we made it clear since our time that you (NIS) are going to get back your money but at face value. You are going to lose a bit on the interest and that is why we moved to secure those assets. Now is the time to use the proceeds to retire all of these debts.”
Be that as it may, auditors noted that the NIS Board used to be chaired by the Cabinet Secretary to the previous government, Dr. Roger Luncheon, and that none of the members of the Board had any actuarial or insurance background, except for the General Manager.
Further, the document stated that the members had no real say, especially when it came to investments.
The document stated, “In fact, many of the members had served on the Board for many years, but when the minutes of the BODs (Board of Directors) for the last four years were reviewed, they confirmed that critical decisions, in particular those for investments, were made by the Cabinet and not the Board.”
This is in contradiction to the Act that is supposed to govern NIS.
The NIS Act provides guidance on how the Board of Directors should be appointed and regulates its proceedings.
In determining how independent the BODs were, those who carried out the review examined the Act and made several references. It was pointed out that Section 3 (2) of the Act states: “The Board shall consist of the following members, namely: A Chairman who shall be appointed by the Minister; the General Manager of the Board, Ex-officio, who shall be the Deputy Chairman; and seven other members appointed by the Minister from among other persons appearing to him to be qualified of having experience of and shown capacity in, such matters which he considers will be beneficial to the Board.”
Then, Section 9 of the NIS Act states, “Subject to the provision of this Act, the board has the power to regulate its own proceedings.”
Further, there was a review of the Board minutes for the years 2011 to 2015. During the review, several instances were noted where the Chairman reported Cabinet’s decision, which were accepted.
Even further, the Minutes did not record any discussions, objections or alternatives to these decisions. In this regard, examples were given.
The minutes of the 448th meeting of the Board held on July 20, 2012, recorded that the General Manager informed the Board that Cabinet made a decision for the Scheme to purchase a property in Paramaribo, Suriname for €535,000.
There was no evidence that the Board had deliberated before making this investment nor was there any evidence that a feasibility study was done to determine whether the price paid was consistent with the value of the property.
An appraisal was subsequently done dated 20/12/2013 in which it stated that the voluntary sales value of the property was €670,000.
Also, the minutes of the 445th meeting recorded that the Chairman informed directors that approval was given by Cabinet for the National Industrial and Commercial Investment Limited to sell 950,000 preference shares held in the Berbice Bridge Company Inc. to NIS at par value.
It was found that the Cabinet decision was countenanced by Directors. In effect, directors made no attempt to determine whether the investment was in the best interest of the scheme.

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