Former CLICO head testifies about transfer of US$34M to Bahamas

-says instructions came from parent company

Geeta Singh-Knight, the former Chief Executive Officer of Colonial Life Insurance Company (CLICO) Guyana on Friday disclosed that sums amounting to US$34M were transferred to CLICO (Bahamas) based on instructions from CL Financial Ltd, the parent company.

She was at the time testifying via Skype in a court case filed by CLICO (Guyana) against Trinidad-based CL Financial Ltd for the recovery of the amount.

During her 45-minute testimony before Justice Gino Persaud in the High Court, she provided details about CLICO (Guyana), CLICO (Bahamas) as well as about CL Financial Ltd.

In the case, CLICO (Guyana) is listed as the plaintiff while CL Financial Ltd is the defendant.

Led in her evidence by one of CLICO (Guyana)’s attorneys, Pauline Chase, Singh-Knight testified from Orlando, Florida that she is aware that the plaintiff company was incorporated in Guyana sometime in the 1960s.

She said that she first became employed by the company on January 16, 2001 and was appointed the CEO from September, 2006 up until the company went into liquidation in 2009.

According to Singh-Knight, the plaintiff company was a subsidiary of CL Financial Ltd which was a company registered and incorporated in Trinidad and Tobago.

“The plaintiff was 100% owned by the defendant and also controlled by the defendant”, she said before confirming that Caribbean Resources Limited was also a subsidiary company which CL Financial Ltd had in Guyana. The defendant company it was pointed out also has other subsidiaries in other parts of the world including Trinidad and Tobago, Barbados, the United States and OECS nations. In total the defendant company had more than 40 subsidiaries internationally.

The witness testified that CLICO Investment Bank which was incorporated in Trinidad as well as CLICO (Bahamas) were also subsidiaries of the defendant company.

She stated that while she sat on the boards of some of the subsidiary companies, she was not a member of the parent company’s board. In 2009, she said she and three other Trinidadian nationals sat on the CLICO (Guyana) board and that at that time Lawrence Duprey, who was one of those sitting on the local board was the CEO of CL Financial Limited. Duprey was the Chairman of both boards, she said, adding that he acted on the directions of the parent company.

“The plaintiff was obligated to carry out the instructions of the parent company and the plaintiff so did carry out the instructions of the defendant”, she told the court, while adding that the defendant company did have the authority to instruct the subsidiaries to transfer money. The witness testified that CL Financial Ltd. instructed CLICO (Guyana) to transfer to CLICO (Bahamas) and in 2009, the sums totaled approximately US$34M. She explained that a series of transfers were done since the instruction was given and while she could not remember when this commenced, she knew that sums were transferred in 2007 and 2008. Some of the instructions were in writing while some were verbal.

She testified that the money transferred to The Bahamas-based subsidiary was not a gift and was to be returned to CLICO (Guyana) with interest. She said that a policy document detailing the interest rate payable, capital investment sum, interest, the expiration date of the arrangement and the sum to be received at the end of the term was issued by CLICO (Bahamas) to CLICO (Guyana).

Singh-Knight told the court that the defendant company was guaranteed to reimburse the plaintiff company for any liability or loss that might occur. She explained that CLICO (Bahamas) never returned the sum as its investment project in Florida had failed. As a result CLICO (Bahamas) suffered financial problems as well as CLICO (Guyana), she said.

She said that CLICO (Bahamas) then went into liquidation while CLICO (Guyana) was put into financial management by an order of the court in 2009 by now retired Chief Justice (ag) Ian Chang. CL Financial Ltd, the court was told is in liquidation.

As a result of the instructions from the defendant company and the subsequent financial problems, the plaintiff was unable to meet all financial responsibilities to policy holders. CLICO (Guyana) went bankrupt and the Government of Guyana had to refund most of the US$34M which had been invested in it by individuals and large organisations such as the National Insurance Scheme.

The case will be called again on Thursday at 2 pm.

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