Retirement does not look so good anymore for Allen James (not his real name). As a senior executive at a major business entity, he had been carefully planning for his post-retirement years, building a solid platform to take care of himself and family. However, this plan fell apart last February with the collapse of Clico (Guyana), putting the millions of dollars he invested with the company at risk.
Allen had two policies with the company, which when totalled would be valued at over $16 million. Following his official retirement a few years ago, he was urged by a Clico agent to invest the money he earned then into a special retirement plan. He said that the plan ensured that he received $200,000 to $300,000 a month, which would have ensured that he was able to keep up the sort of life to which he had become accustomed. His future definitely seemed secure.
Even after CL Financial’s economic woes became public last year January in Trinidad, Allen was shown documentation indicating that only subsidiaries in that country would be affected. However, he was later to realize that this prediction was false, as Clico (Guyana) was subsequently placed under judicial management last February after financial woes.
Since then it has been a frustrating period for James, because he has faced stiff economic challenges in recent months. “For the first time in my working life, I’ve have trouble meeting my bills,” he said. “I have found myself borrowing money from persons to do many things that I would have normally done on my own,“ he explained.
Allen is also upset at the lack of information being fed to affected clients. According to him both parties involved in the legal battle have a responsibility to inform the clients what is happening.“If they tell me by March I will get my money, I can live with that but not with it being indefinite,” he said.
“There must be some interim measures that can be taken to reduce the pain,” he said. If you can’t get all now, at least you can give some, he said referring to the US$15 million government has received from the Petroleum Fund to cover the monies of all Clico (Guy) depositors, “Persons are becoming desperate,” he said, adding that when people become desperate they often resort to desperate measures.
Consequently, Allen feels that the best way to push the matter is for there to be an orchestrated effort at advocacy, by all affected clients. “Isolation”, he said, would not work. As a result, he said he fully supports an initiative by some to form a delegation to lobby for the quick reimbursement of all affected customers.
Chairman of the Private Sector Commission (PSC) Ramesh Dookhoo said that a number of persons have approached the Commission explaining their sufferings to them. He said that subsequently the Finance and Economics Committee of the PSC has put the matter on their agenda.
“People are suffering…many of them silently,” he said. The court matter, he said, stymies a quick solution to the matter. According to him, while it pretends to take care of the employees, it really does not take into consideration how people are suffering, especially those elderly persons who would have lost their pensions. He noted that it is particularly difficult for persons 65 and over to find employment in a country like Guyana. He noted too that many senior businesses and executive members of business bodies have themselves been affected by the Clico fallout.
Dookhoo said that the only option available to the PSC is to advocate for a speedy end to the legal wrangling. He said that if a ruling on the matter was made, it would at least present some clarity to the situation.
Another senior member of the PSC, who requested anonymity, said that the court action by the directors was frivolous. According to the member, the directors have moved to the court arguing that parts of the operations of Clico are still viable, but he said that it was unrealistic for the directors to expect that the persons will still invest in the insurance company after all they have been through. Meanwhile, Terry Holder, a senior member of the Guyana Manufacturers and Services Association (GMSA), said that the matter has engaged the intention of his body. He noted that the pensions of many workers of companies that the GMSA represents have been tied up in Clico (Guyana) and that this was of tremendous concern to the body.
Efforts to solicit a comment from the directors on the whole issue have been unsuccessful. However, previously 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. It was 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 scrutinized since it was not done according to the laws of 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, Maria van Beek, then recommended that the company be wound up.
