The Bahamas Prime Minister yesterday said, “there appears to be no record available at this time” of Clico (Guyana)’s investment in Clico (Bahamas), even as Chief Justice (ag) Ian Chang instructed the Commissioner of Insurance to prepare an affidavit in support of her petition to have Clico (Guyana) placed under judicial management.
Sitting in open court and not in chambers, as he did previously when Commissioner of Insurance Maria van Beek petitioned the court, Justice Chang also temporarily barred any intervention in the case, observing that it would be premature (since a full assessment of Clico’s financial position is to be completed). But he assured attorney-at-law Basil Williams, who had attempted to intervene on behalf of affected clients, that the “time will come for you to enter”.
Williams had showed up representing the interests of members of the Guyana Trades Union Congress (GTUC) who were deeply concerned about their pension schemes. Williams, though respectful of the court’s ruling said his clients needed more than assurances “at this serious time”. He also spoke outside the courtroom emphasizing that the clients attached to GTUC will continue to persist in the interest of their policies. The matter will come up again in two weeks.
Meantime, addressing the Bahamian Parliament yesterday on the circumstances surrounding the present state of Clico (Bahamas), for which a liquidation order was granted on February 24, Prime Minister Hubert Ingraham said that he had since received several telephone calls from Guyana’s President Bharrat Jagdeo.
According to the Bahamas Information Services, Ingraham said Jagdeo had told him that some 53% of Clico (Guyana) was tied up in Clico (Bahamas). However, he told the Parliament, “While there appears to be no record available at this time on this matter, it will be for the liquidator to determine Guyana’s claim. Guyana’s claim does, however, represent a very serious potential impairment for the Guyana operations. As you know, since our actions here, Guyana has put its Clico operation into judicial management.
We have undertaken to keep Guyana updated as matters progress. We are doing likewise with the Turks and Caicos Islands and Belize – both of which were consulted in advance of the petitioning for Clico’s liquidation.”
Meanwhile, acting General Secretary of the GTUC Norris Witter said yesterday that over 60,000 unionized employees have had their pension schemes affected by the Clico (Guyana) and Hand-in-Hand Trust (HIHT) Corporation financial woes.
As regards the pension schemes affected, Witter said that those whose portfolios were with either Clico (Guyana) or HIHT were Banks DIH, Guyana Sugar Corporation, Guyana Shipping Corporation, Guyana Geology and Mines Commission, Guyana Printers Limited, Demerara Sugar Terminal and many other workers who comprise the former Cooperative Financial Administration (COFA) and also belong to “the STEPS pension scheme”. He said the “STEPS scheme alone is responsible for over 30,000 workers”. He pointed out that workers are also holders of various policies with the affected insurance company and declared that “hundreds of thousands” of workers are exposed.
Information on the Office of the Commissioner of Insurance website states that pension plans with Clico (Guyana) include those of the Guyana Bank for Trade and Industry, Banks DIH Limited, the Continental Group of Companies, the Demerara Power Company, Guyana Agricultural and General Workers Union, Guyana Fertilizers Limited, the Guyana National Cooperative Bank, the Guyana Office for Investment, the Guyana Revenue Authority, Kayman Sankar and Company, the Linden Power Company, the Linden Town Council, the New Guyana Marketing Corporation, Shell Antilles and Guianas Limited and the Singer Sewing Machine Company. The page listing the companies was last updated in May 21, 2007.
Witter had earlier stated that while it was too early to ascertain the full impact of the crisis, it is clear that Clico (Guyana) has “collapsed” and the country is faced with a financial crisis of an unprecedented nature with potential catastrophic consequences. He asserted that the revelation that Clico (Guyana) is “intertwined” with the National Insurance Scheme and the New Building Society has exacerbated the magnitude of the crisis. He declared that while the “collapse” of Clico (Guyana) is now public knowledge, “grave uncertainty” surrounds the HIHT that has reportedly been exposed to the Stanford Investment Bank in a substantial way.
While lambasting the silence of some unions, not under the GTUC umbrella, whose members’ pension funds and policies have been threatened, Witter said the lesson learnt is that unions need to be more vigilant in monitoring every aspect of workers/members welfare and cannot rely on the regulatory institutions to do so. He asserted that the regulatory agencies had been delinquent in carrying out their duties.
He declared that in the light of the information reaching the GTUC, it was advising members to verify the accuracy of their accounts as a matter of urgency. The General Secretary said the GTUC will be dispatching letters to van Beek and the Minister of Finance to request meetings.
Meantime, the financial report which the court has tasked van Beek with preparing is likely to be completed when the matter is heard again in two weeks.
Justice Chang’s court is overseeing the operations of Clico (Guyana) through appointed judicial manager, van Beek, who is expected to prepare the supporting affidavit in both her capacity as Commissioner of Insurance and judicial manager of Clico (Guyana).
The petition by van Beek, which came swiftly after the collapse of Clico (Bahamas), was done in her capacity as Commissioner of Insurance, but her role in the insurance company has since deepened to include judicial manager with technical responsibility.
The assets of Clico (Guyana) that escaped the collapse of Clico (Bahamas) were locked down by the High Court last Thursday after government petitioned the court through van Beek.
President Jagdeo told a news conference last week that the winding up of the local company was just one of the options available to the judicial manager, and he expressed hope that the assets could be recovered from Clico (Bahamas), adding that government is treating the assets as though they “are not yet lost”.
The Clico petition was presented by van Beek under Section 67 (1) of the Insurance Act of 1998 which empowers the commissioner of insurance to make a petition before the court as van Beek did, if satisfied that it is necessary or proper for the insurer to be wound up. The commissioner of insurance can make the petition based on several indications and van Beek is said to have approached the court in the interest of policyholders because Clico (Guyana) had taken a severe financial blow.
According to the law, the court can grant an order for a company to be placed under judicial management if the company is facing financial difficulties. However, the law makes provision for Clico to respond to the court application.
According to the law, the judicial manager, in this case van Beek, is expected to make a full assessment and report to the court on what is the most advantageous course to follow, bearing in mind the interests of policy holders.
The law also sets out that the report or a copy of it shall be open for inspection by any person at the Court Registry during official working hours.