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 would 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, at no time was anyone ever charged under the Insurance Act. And even after the insurance company admitted last week to being in breach of the law, 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 today, (‘Jagdeo, Clico policyholders to meet on way forward,’ SN, September 14), the twin questions that should be on every depositor’s mind are: 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 authorize the Bank of Guyana to start issuing cheques 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.
I don’t know how President Bharrat Jagdeo 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 since Clico was in breach of the law.
Even if the government paid the money from public funds, that is taxpayers’ money – including that of Clico (Guyana) depositors – that is being used, so depositors are actually losing twice since that government money has to be replaced/repaid.
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.
Yours faithfully,
Emile Mervin
