By Camini Marajh Investigative Desk
(Trinidad Express) New questions are emerging about the legality of the transaction involving Finance Minister Karen Nunez-Tesheira’s two US-dollar fixed deposits at Clico Investment Bank (CIB).
At issue now is whether CIB was in breach of the new Financial Institutions Act 2008 when it allowed Nunez-Tesheira to cash out two fixed deposits on December 30 last year without Central Bank approval.
Under Section 17, subsection 13 of the law that came into effect in mid-December, a bank “shall not repay any deposit” under a term of one year without the expressed approval of the Central Bank.
In defending CIB’s decision to release the combined deposits of US$48,549.91 to Nunez-Tesheira, a source close to CIB said subsection 13 did not apply in the Minister’s case since the accounts were treated as old accounts over the stipulated one-year period.
This view was, however, disputed by a legal expert, who insisted that once the accounts were rolled over and issued a new certificate of deposit, they were to be treated as new accounts and should have been subjected to the legal requirement under subsection 13 for Central Bank approval.
Sunday Express investigations have confirmed that CIB made no request for Central Bank approval, as required by the FIA, which states in part that a person licensed under the act shall not “without the written permission of the Central Bank repay any deposit within less than one year from the date on which the deposit was received by the licensee”.
Bank transaction documents related to the Minister’s two controversial CIB deposits, which were published exclusively in Thursday’s Express, show Minister Nunez-Tesheira making a written request to CIB under the heading, “Fixed Deposit Break Request”, for an early cash-out of the two deposits, despite a penalty which cost her a substantial loss of interest payments.
Instead of the 6.50 per cent interest contract rate agreed to on the two US dollar fixed deposits, Nunez-Tesheira received a break rate of interest of 3.50 per cent on the two accounts, which was described by financial sources as the penalty for not taking the deposits to the full one-year term.
Minister Nunez-Tesheira made the request to cash in her two deposits to the CL investment bank on December 30 last year on a CIB break request form that required her to disclose the reason for an early termination of accounts.
Under the heading: “Please be advised that I/we wish to break the captioned deposit (please state a brief reason for breaking your deposit below),” the Minister wrote: “To purchase property. Funds needed. Please prepare 1 cheque ino (in name of) Karen Tesheira.”
Former finance minister Selby Wilson said on Saturday Minister Nunez-Tesheria’s credibility has been put in serious doubt. “Her veracity cannot be trusted,” he said, as he joined the call for her resignation.
The Minister’s personal assistant, Beverly Foster, told the Sunday Express on Saturday that Nunez-Tesheira would respond to all of the issues raised about her handling of CL’s bailout on her return home tomorrow.