A deal for Trinidad to bail out four C L Financial subsidiaries was closer last night after a rebel MP voted with the government and the group was at pains yesterday to stress that subsidiaries including the one in Guyana were insulated from the turmoil.
According to the Trinidad Express PNM dissident MP Keith Rowley cast his vote with the Government in the House of Representatives yesterday, paving the way for the multi-billion-dollar CLICO bail-out.
According to Rowley: “At the end of the day, it was all about the public good. What was in the public interest-the saving of the financial sector or a public beheading of UDeCOTT boss Calder Hart?” he asked.
Although Rowley remains convinced that Hart is unfit to manage public assets, the question he asked himself was this: “How far do I go to make this point? And what would have been the effect of the news that Government, which has a special majority in the Parliament, could not pass a measure to save the financial sector?
“Which is worth more? The candle or the funeral?” he asked rhetorically, according to the Express.
The mood in the chamber was extremely tense as the House went into committee stage of the Central Bank Amendment bill and the Insurance Amendment bill yesterday. Government MPs knew the fate of those two bills-deemed vital to save the economy-lay in Rowley’s hands.
At one point, when Rowley went to the men’s room, Government MPs enquired frantically about his whereabouts, causing Opposition Leader Basdeo Panday to quip: “Why don’t we make an announcement that committee stage can’t begin because of the absence of Dr Rowley.”
But on the Government side, this tension gave way to relief, then jubilation, as the vote was taken. Thunderous desk-thumping following the announcement by House Speaker Barry Sinanan that the bills had passed 26 for-13 against.
For the Opposition, which voted against the measure, and which hoped for that perfect political storm of a Government assailed by forces within and without, there was disbelief and disappointment.
“Why did he (Rowley) back down?” Opposition MPs asked.
It took three caucuses to get the bills passed. First, Government MPs caucused with the Opposition. Then Government MPs held their own caucus. And then Rowley and Government leader Colm Imbert caucused separately.
Rowley said that at the PNM caucus, individuals expressed their points of view freely.
“The Prime Minister spoke, I spoke, several times, other members expressed their points of view, we had discourse and dialogue. We met behind closed doors and we confronted the issues,” Rowley said.
“The Cabinet is fully apprised. And I got assurance that the Cabinet has taken responsibility for understanding, acknowledging and treating with my concerns. And to the extent that they could give an undertaking to act responsibly, I have taken their word.
“I am not a member of the Opposition. I am a member of the Government. I should take assurances when I have discussions with the Government in caucus seriously. I expect, therefore, that the Cabinet will act responsibly. And I didn’t think that I needed to go further than that, at the risk of capsizing the financial sector.”
Told that some people were saying that he “caved” in, Rowley told the Express: “I don’t see it as a sign of weakness, it is a sign of strength.
“At the end of the day, depositors, policyholders and all those who have their life savings with CLICO can sleep well. We have restored confidence in the economy, while notice has been served that it is unacceptable for the Government to be in denial of what has been done at UDeCOTT. I will wait and see how the Government and the Cabinet will conduct the people’s business.”
Information Minister Neil Parsanlal said the 26 members of the PNM, from the very outset, had the interest of the people at heart.
“What we saw today, in terms of the vote, was testimony to that. History would record that it was a PNM Government that saved and supported the 172,000 policyholders and the thousands of depositors and all those generations who built CLICO,” Parsanlal said.
“It is all about putting country before self, and today was a classic example of that.”
The two bills go to the Senate today.
Meanwhile, CL Financial Limited yesterday issued a statement saying that the action taken by the government of Trinidad and the Trinidadian Central Bank last week was in respect of only four subsidiaries: Colonial Life Insurance Company (Trinidad) Limited, Clico Investment Bank Limited, CMMB and British American Insurance Company (Trinidad).
CL Financial said it in no way affects the operations of any other subsidiaries.
“Specifically, CL Financial’s insurance subsidiaries: Clico Holdings (Barbados) Limited, British American Insurance Company (Barbados) Limited and Clico (Guyana) are not affected by this action as they are independent entities within the Group”.
It added that C L Financial remained a “stable, robust and integrated company”.
Meanwhile, the Trinidad Express also reported that the
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Central Bank has appointed a new Board of Directors of insurance company CLICO (Trinidad). Former Central Bank Governor Euric Bobb is the new chairman of the CL Financial subsidiary which Government took control of last Friday.
Other Board members include CL Financial executives Claude Musaib-Ali and Caroline John. Unit Trust executive director Marlon Holder and development consultant Anthony Watkins are the other members.
Central Bank Governor Ewart Williams said this morning that the Bank interviewed the appointees on Saturday.
In return for the provision of funds from Government to depositors and policyholders, CL Financial agreed in the MOU to divest some of its assets including its 55 per cent stake in Republic Bank, the country’s largest commercial bank.