(Trinidad Express) If the Central Bank intervened in the affairs of CLICO in 2006, when there were early warning signs that things were amiss, then more than TT$10 billion of policy-holder funds could have been protected, Queen’s Counsel Peter Carter said yesterday.
Carter made the statement as he cross-examined former Central Bank governor Ewart Williams at the Commission of Enquiry into the collapse of CL Financial, three of its subsidiaries and the Hindu Credit Union (HCU).
On Wednesday, Williams said the Central Bank witnessed warning signs that all was not well in CLICO as early as 2006.
Williams, however, said the Central Bank chose not to intervene in the insurance company to avoid a run on the financial institution and a ripple effect in the country’s economy.
Carter challenged this yesterday.
He said, in 2006, CLICO received TT$3.2 billion in new business.
The insurance company also received more than TT$5 billion each in 2007 and 2008.
“If the Central Bank intervened in 2006, over TT$10 billion would not have been at risk,” Carter said.
The Central Bank eventually intervened in CLICO in 2009.
Williams described the situation that led to the intervention of the Central Bank as the “perfect storm”.
Asked whether the Central Bank would have intervened if executive chairman Lawrence Duprey had not met with him, Williams said: “We would have had serious considerations.”
Williams said if any director is found culpable for the collapse of CL Financial it would be similar to international white collar criminals Bernie Madoff and Allen Stanford.
Williams said during the discussions to bail out CL Financial, Duprey never offered to put any of his personal assets up.
During the discussions, CL Financial director Ram Ramesh “metaphorically put a gun to the bank’s head”.
Williams said the Central Bank asked the Director of Public Prosecutions (DPP) to take action against Clico Investment Bank (CIB), but nothing came out of it.
Commissioner Sir Anthony Colman has been at loggerheads with the DPP over attempts to have the enquiry held out of the public glare to prevent ongoing criminal investigations being jeopardised.
Colman asked if the CIB investigation had fallen prey to the “pending tray syndrome”.
Wendy Ho Sing, the Central Bank’s Deputy Inspector of Financial Institutions, took the witness stand after Williams yesterday.
Ho Sing said Central Bank exhausted all options short of intervention into CLICO.
During his cross-examination of Ho Sing, Queen’s Counsel Andrew Mitchell criticised her for “delusive language” about his client Duprey.
