CLICO (Guyana) indebtedness Liquidator moves to block transfer of over $2billion to T&T companies

Jul 02, 2019 News

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By Feona Morrison

Governor of the Bank of Guyana, Dr. Gobin Ganga, in his capacity as Liquidator of CLICO Life and General Insurance Company (South America) Limited (CLICO), has moved to the Court of Appeal to block the transfer of over US$13M to three Trinidad and Tobago companies, namely CL Financial Limited, First Citizen Bank and CLICO Investment Bank Limited (CIB). The order to transfer was made on June 26, last, by High Court Judge Navindra Singh.

The US$13M (approximately GYD$2.795 billion) is currently being held by the Registrar of Deeds pursuant to an Order of Court made in 2009. Justice Singh also ordered that CLICO pay costs of GYD$1 M to each of the companies. CL Financial Limited is the parent company of CIB and CLICO.
CL Financial Limited was the largest privately owned conglomerate in Trinidad and Tobago and one of the largest privately held corporations in the entire Caribbean, before the company encountered a major liquidity crisis and subsequent bailout in 2009, says Wikipedia.
As it is, CL Financial Limited owes CLICO (South America) US$34M pursuant to a court order handed down by Justice Gino Persaud last February. According to court documents seen by Kaieteur News, the over $US13M was due under certain debentures. The order was made by then Chief Justice Ian Chang.
It was to be held by the Registrar of Deeds in an escrow account after CLICO laid claim to the monies following the collapse of CL Financial Limited and resulting crisis.
On June 25 during the evidence of CLICO, and before its completion Justice Navindra Singh struck out the Writ and Statement of Claim of CLICO, laying claim to the aforementioned sum. Added to this, Justice Singh discharged the injunction Order under which the money is being held by the Registrar of Deeds.
Senior Counsel Ashton Chase and Attorney-at-Law Pauline Chase are representing CLICO, through the Governor who is its Liquidator, and is now asking the Court of Appeal to grant a Stay of Justice Singh’s order pending the hearing and determination of the appeal.

CLICO, in a writ of Summons filed at the Court of Appeal, is seeking an injunction restraining the Respondents, their servants and/or agents from uplifting from the Registrar of Deeds the sums held pursuant to an order made by Chief Justice Chang on March 24, 2009, and such further and other order as the court deems fit.
CLICO is also seeking another injunction restraining the Registrar of Deeds from disbursing and/or transferring and/or paying the sum to the Respondents, namely CL Financial Limited, First Citizen Bank and CLICO Investment Bank Limited (CIB).
In its Notice of Appeal dated June 27, CLICO, among other things, contends that the decision of Justice Singh was erroneous in law and that he erred in striking out the company’s action on the ground that it disclosed no cause of action prior to the close of the company’s case. CLICO argues that Justice Singh failed to consider and/or apply applicable equitable principles and relied on erroneous principles of law and applied incorrect principles of law with regards to subrogation and/or assignment of debenture
In an Affidavit in Support of the Summons, Dr. Ganga said that Justice Singh struck out CLICO’s claim

against CL Financial Limited which did not enter an appearance. Dr. Ganga, therefore, believes that the appeal has good meritorious grounds and that the judgment of Justice Singh was fundamentally flawed in many aspects.
It is Dr. Ganga’s assertion that Justice Singh in effect made a finding of a no case submission during the evidence-in-chief of CLICO and before the close of its case and that the Respondents did not seek discovery or any other Orders with regards to the pleading before the close of the pleading prior to the start of the trial.
“First Citizen Bank and Citizen Investment Bank filed the said Motions after the trial had commenced and an adjournment to permit (CLICO) to tabulate the large number of bank wire transfer documents to be tendered at that stage,” Dr. Ganga noted in the Affidavit.
According to Dr. Ganga, Justice Singh made a finding of fact that the action was repetitive to that of CLICO Life and General Insurance Company (South America) vs CL Financial Limited which was filed in 2009, and heard and determined before Justice Gino Persaud. The Governor added that the aforementioned case was not before Justice Singh nor did it form part of his judgment detailing the basis upon which the said finding was arrived.
“That action in the lower court (High Court) concerned certain debentures issued and registered in Guyana by Bosai Minerals Guyana Group Inc. and Bosai Minerals Guyana Services Inc. in favour of the third-named Respondent (CLICO Investment Bank Limited (CIB)) in the total principal of US$18M. The Appellants (CLICO) claimed rights, benefits and sums due thereunder in equity and law by way of subrogation.”
Dr. Ganga further added that the order of then Chief Justice Ian Chang in interlocutory proceedings in the High Court, the Registrar of Deeds was authorized to receive the sums due and hold same in an escrow account and that the sum of approximately US$13M was lodged with the Registrar of the Deeds which is still so held.
Dr. Ganga said, “…That I fear that unless restrained the Respondents will seek to uplift the said sums from the Registrar of Deeds and transfer same out of the jurisdiction of Guyana prior to the determination of the appeal herein rendering the appeal nugatory. The Respondents are companies duly incorporated in the Republic of Trinidad and Tobago. The Appellant (CLICO) is a company duly incorporated in Guyana and carried out business of insurance prior to being ordered wound up.”
According to Dr. Ganga, CL Financial Limited owes CLICO over US$34M. He said that CLICO suffered loss and damages to the tune of US$34M after CL Financial Limited unlawful directions and instructions to transfer the said sum to CLICO (Bahamas), which collapsed in 2009, along with CLICO and CL Financial Limited.
Based on information, CL Financial Limited instructed that the millions of US dollars be transferred from CLICO (South America) to CLICO (Bahamas). The Affidavit sworn to by Dr. Ganga said that First Citizen Bank assumed responsibility, through emergency powers exercised by the Central Bank of Trinidad and Tobago, for aspects of CLICO Investment Bank Limited after it collapsed in 2009.
Dr. Ganga said, too, that the collapse of CL Financial Bank resulted in CLICO being placed under the judicial management of the then Commissioner of Insurance and was subsequently ordered wound up.
As a result of this, he said CLICO was unable to meet its financial obligations particularly to its policyholders. Furthermore, the Governor said that the Respondents do not have any other assets in Guyana, and CLICO would be left without any remedy should it be successful in the appeal.
“(CL Financial Limited) is also under liquidation which represents a greater danger in the circumstanced that the sums would be irrecoverable should they be dissipated prior to the hearing and determination of the appeal. CL Financial Limited has not honoured its financial obligations to (CLICO South America,” the Governor stated in the Affidavit in Support.
Dr. Ganga says that it is a peculiar practice for an Order of Court to be signed by a Judge. He said that the Order of Court was entered the day after the judgment was delivered. The Governor noted that the signing of the Order of Court by His Honour (Justice Singh) is peculiar in the circumstances and in breach of Order 35 of the Rules of the High Court Chapter 3:02.

 

 

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