By Mark McGowan
For 17 months, Clico (Guyana) clients have been living on the promise that they will be reimbursed their investments, and some of those affected are now asking that this pledge be fulfilled immediately since they desperately need their money.
President Bharrat Jagdeo has promised to start reimbursing clients as soon as the court granted the order for the company to be liquidated. Moves by the administration to wind up Clico have been legally challenged by the company’s directors, an action which has prolonged the matter much to the vexation of President Jagdeo. However, a source close to the directors told this newspaper that the legal battle is a complicated matter with many sides which persons do not understand. The source said too that the move to challenge the winding up of Clico was done in the best interest of the clients and was not a malicious act.
However, as the matter continues to engage the attention of the court, clients continue to suffer. At the time the troubled insurance company was placed under judicial management, it had 14,900 insurance policies, Judicial Manager Maria van Beek had revealed.
Among those affected are 71-year-old Ovid Eastman and his wife Margaret, 60, who are both anxiously awaiting the reimbursement of their funds. It has been a double whammy for the couple: while Margaret has a health insurance with Clico, Ovid has invested $1.5 million in the company. With hospitals no longer accepting Clico health insurance cards, Ovid told this newspaper he recently had to take money out of his own pocket when his wife needed medical attention. He acknowledged that it has been challenging since both he and his wife are now retired and that they still have to support themselves. He said too that the cost of living continues to rise.
Eastman is concerned that close to a year and a half after the President promised to refund all the affected customers, there is no clarity as to when this will happen. “The President went on national television and said that everybody will get their money back,” Eastman said, adding that the matter was subsequently raised in the National Assembly by Opposition Leader Robert Corbin. “But nothing has happened,” he said clearly frustrated. He also expressed disappointment at the way the court matter involving Clico is being dragged out. He said he has been keeping up with the developments via the media and his agent. He said too that on a few occasions he has visited the company’s office and was told that he will have to wait on the conclusion of the court case.
Eastman believes that the affected customers should mobilize themselves and participate in a picketing exercise. According to him, the matter is a serious one which should be kept on the front burner. He is also afraid that with general elections scheduled for next year, the issue could be swept under the carpet.
Further, Eastman feels that the US$15 million that the government received from the Petroleum Fund to offset some of the expenses of the Clico fallout, should be immediately used to pay off some of the company’s small clients.
“If I could get my money back tomorrow I would be happy,” Ronald Thomas said when asked for his thoughts on the issue. Thomas said he had a banking policy with the company and that the freeze on his funds has affected him terribly. “I have bills to pay and the economic situation is very tough,” he said to this newspaper. Thomas also echoed the sentiments of Eastman and said that some of the small clients of the company should be paid off with the money that the government has received for this purpose.
“When I was taking money there every month it wasn’t any problem, but now to get it back is a different story,” he said. Thomas said that he has been keeping in touch with his agent for any updates concerning when he will get back his “hard-earned money”. In the meantime, Thomas continues to hope that he will recoup his investment.
Haresh Ramsamooj, a former agent of Clico (Guyana), opined that the Clico debacle had affected the insurance industry in Guyana. “Every-thing is in limbo. People are scared of buying insurance… I have lost a lot of clients because of the situation,” Ramsamooj said. According to him, he had been an agent with the company for 12 years during which he had secured some 1,350 clients. Now an insurance agent with another company, Ramsamooj said that it has been a challenge to get his former clients to invest in insurance. Meanwhile, Ramsamooj has been trying to assure all of his Clico clients that everything will be alright. He said he has been telling them “this is not the end of the world” and that they will be getting back their money at some point. However, Ramsamooj expressed his disappointment at how “tight-lipped” the government and the company have been on the matter.
Ramsamooj said he has tried to keep in contact with the company’s Head Office and has been told that the company is simply waiting on a favourable ruling in the current court case. However, he said, recently it has been becoming increasingly difficult to get information from the company.
Meanwhile, the former agent believes that there are several unanswered questions concerning the company and that an audit should be conducted. “We need a forensic auditor to investigate Clico (Guyana),” Ramsamooj said. According to him this auditor should be hired from a reputable overseas firm.
Ramsamooj said the Chief Executive Officer (CEO) of the company Geeta Singh-Knight had deceived the employees, agents and clients. He said that during a meeting, she had mentioned a $12 billion statutory fund. He said that since Clico’s collapse not a word has been mentioned about this statutory fund.
Meantime, the source close to the directors told this newspaper that the affected clients had a right to be upset at the Clico debacle. The source said too that while the government gave a guarantee to the company’s clients, it has not outlined how this will be done. This is a matter of concern to the directors, this newspaper was told.
This newspaper was also told that the “propriety of the proceedings that led to the winding up order” needed to be scrutinised since it was not done according to the laws of Guyana.
This source also pointed to some inconsistencies in the government’s dealing with Clico. Stabroek News was told that while the President has repeatedly said that there is no evidence of criminality in Clico’s affairs, the very fact that the company had invested such a significant part of its assets overseas, was in fact a criminal act. It was suggested by the source that the government, by its failure to properly regulate the company, had contributed to this act of criminality. The local Insurance Act of 1998 stipulates that the insurance company should invest at least 85 percent of its assets locally. However, observers have noted that the country is also a signatory to the Caricom Movement of Factors Act, which in fact removes such restrictions.
Numerous efforts to solicit a comment from Finance Minister Dr Ashni Singh on the matter proved futile.
Recently, PNCR-1G MP Winston Murray, while debating the Fifth Periodic Report of the Parliamentary Sectoral Committee on Economic Services on Thursday, criticised Singh for failing to appear before the committee despite being requested on two occasions during last year. Murray explained that Singh’s presence would have helped to clarify issues surrounding the guarantee that had been promised to all the clients of Clico (Guyana).
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 then recommended that the company be wound up.
