Guyana has received the promised $3billion (US$15 million) from the regional Petroleum Fund, which is to be used to assist Clico (Guyana) to meet its liabilities, President Bharrat Jagdeo announced on Friday.
In April, during the 5th Summit of the Americas held in Trinidad and Tobago, President Jagdeo had lobbied with other Caricom Heads for Guyana to receive the additional funds. In an interview following his return from the Summit, Jagdeo stated “before I left Guyana, I said at the press conference that they were putting US$50 million from the petroleum fund into a special facility to deal with the OECS (Organisation of Eastern Caribbean States) countries that had problems with British American (Insurance Company), because they have some issues which are related to the CL Financial Group. I said, I thought it’s unfair…this is a regional problem and requires a regional solution…I argued for an additional US$15 million to come from that fund and to come from Guyana to assist with Clico.”
In April, Judicial Manager of Clico (Guyana) declared that in a worst case scenario, the company’s liabilities will exceed its assets by $11.9 billion. However, President Jagdeo at a subsequent press conference emphasized that this was only a worst case scenario. He expressed optimism that Guyana would regain some of its money. This comment came after several promises made by Jagdeo that no investor in the company will lose money.
Meanwhile, on Friday at State House Jagdeo told reporters that the government, through its legal team, continues to monitor the court case in Bahamas. He further stated that at the local level, the government is waiting on the Chief Justice is to rule on the liquidation of the company.
The injection of the US $15 million from the petroleum fund is expected to significantly reduce the gap between the liabilities and assets. This interjection, along with other interventions could see the gap being completely eliminated, thereby negating the need to use taxpayers’ money.
Clico (Guyana) invested $ 6.9 billion in Clico (Bahamas) which represented 53 percent of the local companies’ assets. Although these investments were liquid on paper, subsequent investigations revealed that this sum has been tied up in real estate investments that CLICO (Bahamas) had in Florida through subsidiaries. When CLICO (Bahamas) was ordered liquidated on February 24, the local company was subsequently placed under judicial management.
