Jagdeo urges ‘serious approach’ to Duprey’s offer to ‘make amends’ for US$40M debt to NIS

The government needs to take a serious approach to the recent apology from CL Financial and its offer to make amends over the collapse of Clico (Guyana) and not use the development for political gain, Opposition Leader Bharrat Jagdeo said yesterday.

“It seems as though the minister is dealing with Clico anecdotally and wants to score political points,” Jagdeo told a press conference, while noting that investors would always be welcomed in Guyana.

Lawrence Duprey, Chairman of CL Financial and other officials of the company, met with Minister of Finance Winston Jordan almost two weeks ago with the intention of discussing the prospect of doing business in Guyana once again. They signalled plans to “make amends” for the approximately US$40 million debt owed mainly to the National Insurance Scheme (NIS).

Jagdeo, when asked about the development, said that Clico failed across the region with “devastating” consequences for most countries. “A lot of those countries lost money. People who deposited in their local financial institutions lost their money. In some countries, even Trinidad and Tobago, they did not return people’s money at face value. They returned their money at a discount,” he said.

He explained that that in Guyana’s case, a commitment was made that every depositor’s money would be returned at face value, “which would mean people will not lose their principle sum invested.”

He said that all assets were looked at during the initial period and some were sold, which resulted in money being returned to most of the depositors. He said other Clico assets in companies in Guyana were looked at and he made mention of the money owned to NIS and the investment income the scheme would have lost over the years.

Jagdeo said that at present there is close to $7 billion “sitting” around, which is to be used to take care of liabilities.

He said Guyana is one of few countries in the region which had settled everyone’s account at face value without major recourse to the treasury.

“I think they know that if we only go at face value, the money sitting there can be used to settle a lot of these claims. They may not have to put in much more,” he said.

Jagdeo made it clear that he is not agreeing or disagreeing with Duprey’s approach but said Guyana has to ensure it is well prepared to head into discussions.

“I am not saying he should or should not. I am just responding to a question that he himself came here and say he wants to make right and I am just saying making right has different dimensions and therefore in our case in discussion with him about making this issue, we should be well prepared…We need to approach these things seriously,” he said.

A statement issued by the Ministry of Finance last Wednesday said Duprey indicated to Jordan that “he would like to renew his relationship with Guyana as well as publicly apologise to its people for the collapse of Clico Guyana.”

The statement added that Duprey, the majority shareholder of CL Financial, also informed Jordan that his company was interested in investing in several areas here, including providing solar energy at competitive prices, affordable housing, clay brick and solar for housing as well as introduce a financial model that will generate savings and lower poverty.

Jordan, it noted, informed Duprey that he will apprise Cabinet of the discussions and advised that future engagements could be conducted on parallel tracks: discussion on recovering monies owed by CL Financial and investment in Guyana.

Clico (Guyana) collapsed in 2009 after its parent company, CL Financial, had to be bailed out by the Trinidad government and its sister companies experienced grave financial problems.

Clico’s collapse followed its loss of $6.9 billion (US$34 million) in the liquidation of Clico (Bahamas).  Those monies represented 53% of the local company’s assets. The Bahamas subsidiary had invested the money from the Guyana company in Florida real estate that went bust.

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