(Trinidad Guardian) High Court judge Ronnie Boodoosingh has given CLICO Investment Bank (CIB) the green light to proceed with its winding-up.
Boodoosingh granted the winding-up petition yesterday, after being told that the National Insurance Board (NIB) had withdrawn from the proceedings.
Last year, both the NIB and National Gas Company (NGC) attempted to block the winding-up of CIB.
The petition was brought by CIB, through interim manager Carl Hiralal.
Earlier this year NGC withdrew from the matter.
At yesterday’s hearing , Boodoosingh also appointed the Deposit Insurance Corporation (DIC) as liquidator in the matter.
According to the DIC’s website, the process which follows the liquidator’s appointment is that the payments (called dividends) will depend on the rate of recovery from the liquidation of the assets of the institution, and the extent and priority of claims from other creditors of the institution.
Final disbursements may take several years, depending on the types of assets to be realised.
Both the NIB and NGC had filed two applications in the High Court — the first being the winding-up petition and the second an application to recover a $1.8 billion deposit from CIB.
In 2009, Government bailed out insurance giant CLICO which is a subsidiary of CL Financial. In a bid to prevent a financial crisis on other CL Financial institutions, the government gave control of CIB to the Central Bank.
In a bid to avoid panic among the population and moreso, investors, CIB offered an Investment Note Certificate (INC), which is a short-term deposit designed to give customers a safe haven for their investments above market rates. However, legal wrangling emerged after the Central Bank took a position that the INC is not an approved financial instrument and therefore is not eligible for payment of full principal amount of all third party deposits guaranteed by government following CIB’s collapse.
However, last month, High Court judge Peter Rajkumar ruled that an INC is in fact a deposit and not a security, as argued by CIB.
