Government will begin refunding investors and policyholders in the local CLICO company as soon as the court approves the order to liquidate the company’s assets, President Bharrat Jagdeo disclosed on Monday during a press conference.
Responding to a question posed by this newspaper as to how soon government will honour its commitment to the company’s investors, Jagdeo said that “once the court gives a liquidation order then you can start disposing of the assets and also taking care of the investors.”
“As soon as that happens you will see some entities getting their money back immediately, and (with) others the government sitting and working out with them a time-frame over which they’ll get back their money”, he stated.
Following the disclosure of the financial woes of CLICO in February, President Jagdeo had issued several assurances that no policyholder or investor in the company would lose their money and outlined several measures that would be employed to ensure that this was done.
The PNCR recently called on the government to inform CLICO policyholders of the “arrangements, timing and procedures” to be used to honour the guarantee that they would not lose their money. The party said that it was “appropriate for the government to inform policyholders of CLICO when the promised guarantee, given first by President Jagdeo, and, later, by the Parliament of Guyana, will become a reality.”
At a previous press conference, Jagdeo told reporters that Guyana has received the promised $3 billion (US$15 million) from the regional Petroleum Fund, which is to be used to assist CLICO (Guyana) to meet its liabilities.
The injection of the US$15 million from the petroleum fund is expected to significantly reduce the gap between the liabilities and assets. This injection, along with other interventions could see the gap being completely eliminated, thereby negating the need to use taxpayers’ money, the President had said.
CLICO came under financial strain after it invested a significant part of its assets in CLICO (Bahamas), which later found itself in financial woes. The local company invested $6.9 billion in CLICO (Bahamas) which represented 53 percent of the local companies’ assets. Although these investments were liquid on paper, subsequent investigations revealed that this sum has been tied up in real estate investments that CLICO (Bahamas) had in Florida through subsidiaries. When CLICO (Bahamas) was ordered liquidated on February 24, the local company was subsequently placed under judicial management.