CLICO suspends Singh-Knight

CLICO (Guyana) on Monday suspended its Chief Executive Officer, Geeta Singh-Knight with immediate effect, citing decisions she made without the knowledge of the board, and the embattled company has also moved to court seeking to have actions taken by the judicial manager properly sanctioned by the court.

Police yesterday took over security for CLICO (Guyana)
Police yesterday took over security for CLICO (Guyana)

The dramatic move against Singh-Knight spilled over into the High Court yesterday as Clico (Guyana) filed a motion to limit the actions of Judicial Manager, Maria van Beek within the boundaries of court-approved decisions. According to the company, van Beek has instructed Singh-Knight to disregard the letter of suspension and to remain in her office. Neither Singh-Knight nor van Beek could be contacted yesterday. Singh-Knight has not spoken to the media since the January 30 bail-out of CLICO (Guyana’s) parent company C L Financial.

Clico (Guyana) is also seeking an order to cancel the appointment of van Beek as Judicial Manager on the ground that it is undesirable that the order should remain in force indefinitely or alternatively an amendment of the order. Van Beek had been appointed Judicial Manager on February 25. The decision came following the move by the Bahamas Supreme Court to order the liquidation of Clico (Bahamas). Clico (Bahamas) held 53% of the assets of Clico (Guyana) at the end of 2007.

Geeta Singh-Knight
Geeta Singh-Knight

In a strongly worded letter dispatched on Monday and signed by CLICO (Guyana) Director, Winston Ramalho, the company condemned Singh-Knight’s decision last week to dismiss forty full-time and three part-time staff, and a move by her instructing a staff member to remove C L Financial Chairman Lawrence Duprey’s name as a signatory to local bank accounts without consulting, and or a grant of approval by the Board of Directors.
Duprey is named as a signatory on local bank accounts at Republic Bank, Citizen’s Bank and the Guyana Bank for Trade and Industry.
Directors and shareholders at Clico (Guyana) said they found Singh-Knight’s conduct reprehensible having examined her role since February when the company was placed under judicial management.

Singh-Knight was instructed in the CLICO (Guyana) letter to surrender to Ramalho the company vehicle which she holds in the capacity as Chief Executive Officer; the company’s computer which is in her possession and company documents and or files which are also in her possession.
In the move to the court Clico (Guyana) is seeking a series of orders among which are:

  1. An order under Section 70 of the Insurance Act that the order of Judicial Management dated 25th day of February ,2009 appointing the Commissioner of Insurance Judicial Manager of Clico Life and General Insurance Co. (S.A.) Ltd be cancelled on the ground that it is undesirable that the Order should remain in force; alternatively
  2. An Order varying the Order of Court dated the 25th day of February, 2009 by the deletion of that portion or part of the aforesaid Order which reads:  “it is further ordered that the Commissioner of Insurance be appointed Judicial Manager for the purpose of Judicial Management as Ordered.”
  3. That the Court issue directions under Section 69 (5)of the Insurance Act  to the Judicial Manager as to whether Geeta Singh-Knight is authorized to act as and to perform the duties of Chief Executive Officer of Clico Life and General Insurance Company (S.A.) Limited whilst the said Company is under Judicial Management.
  4. An Order that the closure of offices of Clico Life and General Insurance Company (S. A.) Limited by Geeta Singh-Knight purporting to perform the functions of Chief Executive Officer is a nullity.

Ramalho, in his affidavit in support of the motion, said that there are no limitations on the judicial manager’s functions and duties and as such the said functions and duties are completely uncircumscribed.

He stated that since the appointment of the judicial manager, Singh-Knight has closed business offices of Clico (Guyana); instructed or caused the removal of a signature of a Director of the company from cheques and has terminated the employment of forty-three  staff members.
Further, Ramalho said that the effect of placing the entire company under judicial management has caused the company substantial financial loss as in those areas of business, the existing policies cannot be renewed or continued.

He contended  “That the said Clico Life and General Insurance Company (S. A.) Limited also engages in the General Insurance, fire and auto insurance businesses.

“That I am advised by my Attorneys-at-Law and verily believe that the General Insurance business and auto insurance business have its separate statutory funds which are not under any peril or in question and as such those classes of insurance business ought to be removed from under the  Management of the Judicial Manager.

“That the effect of placing the entire Company under Judicial Management has caused the Company substantial financial loss as in those areas of business, the existing policies cannot be renewed or continued.

“That I am advised by my Attorneys-at-Law and verily believe that by Section 69 (4) of the Insurance Act upon the appointment of the Judicial Manager, the Judicial Manager cannot issue any new policy or renew any policy without leave of the Court.
“That the said Judicial Manager has not applied for Clico Life and General Insurance Company (S. A.) Limited, to issue any new policy or renew any existing policies in those unaffected classes of insurance business. “

The Judicial Manager is to return to court next month with a plan on how to move forward on CLICO (Guyana)
Van Beek, on March 12,  in her first press conference since the CLICO (Guyana) crisis broke said  that she had issued instructions on several occasions to the insurance company requesting it to reduce their exposure overseas but she said this was not done.

She said that the company was preparing to honour verified claims for health, fire, motor and other general insurance contracts. She said that “claims related to life and pension contracts will not be paid at this time” since “the assets backing these claims are still being assessed and may be subject to litigation. She added that “payment of these claims would quickly erode the liquidity of the company and affect its viability.” She, however, re-emphasised the assurances given by President Bharrat Jagdeo and Finance Minister Dr Ashni Singh, that no one with investments in the company will lose their money.
Further, van Beek urged all “policyholders that have regular premium in-force contracts to continue to pay their premiums in light of the assurances given by the Government.” She explained that failure to do so would severely impact access to entitlements “notwithstanding any guarantees.” She further explained that “upon the expiry of renewable contracts such as motor policies, these policies will not be automatically renewed.” She added that at this point, these persons should “seek alternative insurance arrangements.”

She explained that currently investigations are being done to ascertain the financial status of the company. She said that the audited financial statements of CLICO (Guyana) as at the end of last year are now being finalised. She explained that the accounting firm Nizam Ali and Company has been contracted to assist in the financial assessment of the firm. Additionally, Prescience Insurance Consultants and Canadian based actuaries have been solicited to work alongside the actuary of the local company.  She also said that a team of legal representatives has since been hired both locally and in The Bahamas.

Van Beek had also told Stabroek News last week that Singh-Knight is still playing an integral part in its present CLICO (Guyana) operations.
She informed this newspaper that Singh-Knight and other staffers are currently assisting the accounting and legal investigating teams with their work, as the Judicial Manager is compiling her report to present to the Court.

Around the Web