Some of the customers worst hit by the Clico (Guyana) financial fallout are forming a delegation to actively put pressure on the government to fulfil its promise to reimburse all affected customers.
The group, Stabroek News understands, plans on approaching Finance Minister Dr Ashni Singh to express their concerns on the matter and to see how quickly a favourable solution can be found. Members of the private sector are expected to be part of the lobbying effort, one group member told this newspaper recently. Stabroek News was told that the lobbying effort is in its early stages but the plan is to garner the support of a cross-section of affected persons to petition for a meeting within the next few weeks.
Following the collapse of the company last year February, President Bharrat Jagdeo promised that no customer of the company would lose their investment. However, efforts by the government to liquidate the company have been challenged by the company’s directors and the matter has dragged on in the courts for months.
And as the legal wrangling continues, some of the company’s clients have fallen on hard times and are looking for an end to their woes.
Marlon and Bernice Austin (not their real names) had taken out a joint Executive Annuity Policy with the company in 2003. The policy was offered to persons 50 and over, and the couple invested almost all of their life savings here.
Explaining the investment, Marlon said he had previously invested in the New Building Society but was convinced to invest in Clico by a close relative. According to him, while the interest rate at the NBS was not bad, the interest rates at Clico were higher and there was no withholding tax. He said despite his scepticism about insurance policies, he decided to give it a try.
For years there was no problem with this policy which ran from year to year. He was so pleased, that in 2008, he decided to change his policy to one which ran for every two years instead, with the benefit being even higher returns.
However, early last year he said that he heard through the grapevine that there would be a problem. He said he went to the sales agent and was told everything would be okay. He also contacted a senior marketing agent who also said everything would be alright.
Things changed drastically for him when on February 24 he was told by a senior official to withdraw his policy. He went to the company’s Camp Street Head Office and was given a cheque and told he would get back his money within a week. He has been waiting for over a year-and-a-half now.
Marlon, who is just shy of his 60th birthday, said that his needs to do urgent repairs to his home, but is unable to do because of the lack of finances. He also has to take care of his wife, two daughters and a grand-daughter.
Bernice, his wife, said that it has been “real, real rough” for her and her family. “Sometimes I would sit down and cry,” the distraught woman said. She said that when she and her husband retired they had a plan, but this plan has since come crashing down.
She said following her retirement from DIDCO, she would rear livestock. She said that bills have started to pile up and that recently she had to sell off the last of her animals to settle her debts. While she does odd jobs now and again, Bernice said that she has also been benefiting from occasional support from relatives.
According to her she even went to Office of the President to seek assistance but was told by one of the officials there that nothing could be done for her until the court matter is settled.
After living in the USA for several years Ramesh Persaud returned to Guyana about five years ago to live. He said that he ran a fairly successful business in the US. He said he realized it was cheaper to live here than in the USA and decided to sell his house, close his business and return home. He told this newspaper that he returned to Guyana with the intention of being based here while pursuing other opportunities – particularly academic ones – overseas.
Ramesh took out a retirement plan with Clico, which offered good interest rates on his investment. He said that he put in both US and Guyana dollars. In all he invested a substantial sum, which he said was worth tens of millions of dollars. According to him, things were going well until the Clico fallout. “Clico fell apart and my life fell apart,” he said.
When he heard about difficulties in Trinidad he got scared and went down to the office to contact his agent. Ramesh said while his agent was tight-lipped, one of the company’s managers said that Clico was strong and encouraged him to leave his money. He said that he was convinced to leave his money and this later proved to be a mistake, since the company subsequently folded.
This has had a significant impact on his financial situation. The little money he had, he said, ran out and he was forced to seek employment. He is now an agent at GTM.
“I’m like a fish out of water,” he said. “I am 60; I can’t go and build my house. I have to live with friends, living in a one-room situation. I can’t afford a proper apartment because I am not generating enough funds at the moment,” Ramesh said.
He expressed the view that the President was badly informed when he made his first pronouncements about Clico and that subsequently he “made a lot of promises… with no substance so far.” While acknowledging that the President had successfully lobbied for US$15 million from the Petroleum Fund to help pay off Clico customers, Ramesh said that the money is serving no purpose since it is just sitting in a bank account. He suggested that this money should be used to pay off some of the individual investors.
Ramesh also expressed his disenchantment with the country’s legal system. He accused the directors’ lawyers of dragging out the case, a move which he said did not have the interest of the company’s customers at heart. He noted that in most of the other countries affected by the fallout, the companies had already gone ahead and liquidated.
Further Ramesh believes that “Clico needs to be investigated forensically.” He said that by refusing to conduct such an audit, the President is giving the impression that he has something to hide. Ramesh said that there is nothing to lose from having such a forensic audit done.
Clico (Guyana) invested $6.9 billion (US$34 million) in Clico (Bahamas) which represented 53 per cent of the local company’s assets. Although these investments were liquid on paper, subsequent investigations revealed that this sum was tied up in real estate investments that Clico (Bahamas) had in Florida through subsidiaries. When Clico (Bahamas) was ordered liquidated on February 24 last year, the local company was subsequently placed under judicial management. After a review of the company’s affairs, the judicial manager, Maria van Beek, recommended that the company be wound up.
