-restates liquidation recommendation
In a final report to the High Court on the financial status of CLICO (Guyana), Judicial Manager, Maria van Beek has said the company is faced with a severe liquidity crisis and may have to consider disposing of major assets to source the necessary financing.
Van Beek also commented on the general status of the insurance company saying that it has suffered a significant decline in business over the last two months and that, “it is highly unlikely that the company will be able to restore the confidence of the public in the foreseeable future. “
She said too that allowing the company to continue in operation will further deplete the resources available to settle its liabilities, adding that “liquidation of the company may be regarded as the option most advantageous to the general interests of the policy holders”. The report, which had been delayed for some time, was submitted to Chief Justice (ag) Ian Chang on Monday ahead of a hearing yesterday.
The judicial manager, who is currently overseas, had recently urged the court in an affidavit to liquidate the company now given its financial position.
The completed report stated among other things that CLICO has a liquidity deficiency of $1.5B as of February 28, 2009 and further disclosed that the company has no immediate means of sourcing additional financing to meet its payment obligations.
But attorneys for CLICO are expected to challenge van Beek’s financial assessment of the company. CLICO’s lead counsel, Roysdale Forde yesterday filed a motion seeking orders for van Beek to make certain documents available to Company Director, Winston Ramalho.
Justice Chang commented yesterday in court that CLICO’s former Chief Executive Officer, Geeta Singh-Knight is likely to be the person with information on the documents.
Forde’s recent action is focused on the audited and unaudited financial reports of the company for the years 2006, 2007 and 2008. The company is also calling on the judicial manager to hand over copies of the contracts in favour of the National Insurance Board, Guyana Revenue Authority and the Dependents Pension Funds.
Forde said yesterday that the documents being requested are critical to CLICO’s rebuttal in court. He said the documents were locked down by the judicial manager when the company was placed under judicial management, blocking access to them by company officials.
Van Beek’s role as Commissioner of Insurance/Judicial Manager will be taken over by the Bank of Guyana when the legislation catering for this is assented to by the President. This move came shortly after van Beek survived an attempt to kill her.
CLICO (Guyana) was placed under judicial management when its sister company in The Bahamas was put into liquidation. The Bahamas company held US$34M or 53% of the local company’s assets and van Beek recently said that only around 7% of this may be retrievable over time. The entire C L Financial Group of which CLICO (Guyana) is a part entered stormy seas after the Trinidad government was forced to bail out several of its financial services subsidiaries at the end of January, 2009. The Guyana Government has said that it will guarantee all of the deposits of Guyanese in CLICO but many questions abound including the details of withdrawals from CLICO in the days leading to it being placed under judicial management. These withdrawals were financed by the sale of a bond in the Berbice Bridge to the New Building Society.
