-after liquidation ruling
President Bharrat Jagdeo will meet policyholders of Clico (Guyana) on Thursday to discuss “the way forward,” as the administration moves to honour its guarantee to customers affected by insurance company’s financial collapse.
A notice sent through the Government Information Agency (GINA) yesterday invited “current policy holders of CLICO (South America) Ltd. to a meeting on Thursday, 16th September at 3:00 pm at the National Cultural Centre,” where they will be addressed by President Jagdeo. The meeting is “open to policyholders only and persons wishing to gain admission will be required to provide proof of identity.” All attendees are requested to be seated by 2:30 pm.
Jagdeo told reporters yesterday that the meeting is to discuss the way forward, after the company was ordered liquidated. Following the collapse of the company last year, Jagdeo had promised that no customer would lose their money.
Last Friday, acting Chief Justice Ian Chang ordered that Clico (Guyana) be liquidated, saying that available material points “unerringly” in the direction of its insolvency and it was against the interests of policy holders to allow it to continue. Justice Chang ordered that the Bank of Guyana be appointed as liquidator to execute the wind-up order and this is expected to pave the way for the government to make good on its assurance of guaranteeing the policies and investment held by Guyanese in Clico.
Jagdeo said yesterday that the liquidation process would involve the assets of the company being put up for sale. He said the liquidator would be in charge of the process and added that he hoped the process would see the assets being purchased for at least their book value. The government has already received $3 billion (US$15 million) from Caricom’s Petroleum Fund to offset expenses related to the company.
Should the assets not get favourable bids, Jagdeo said that government may consider purchasing some of the properties. He said government does have need for more buildings because of the greater demands for public service.
Previously, when efforts were made to sell the company’s assets, the bids in were low. However, the order granted to sell the assets was challenged and they were subsequently withdrawn.
Meanwhile, Finance Minister Dr Ashni Singh, through a GINA statement, said the government welcomed the decision by Justice Chang, which came after “a number of attempts were made to frustrate government’s application for the company to be wound up.”
In the statement, Singh described the attempts by persons connected to, or with vested interest in the company’s affairs as “a deplorable series of frivolous actions in the court, with no merit, and with no obvious aim or design but to cause delay and to frustrate the public interest in this matter.” Government’s intentions, Singh said, have always been to ensure an orderly resolution of the difficulties encountered by the company and to protect the public interest. He said the recent ruling paved the way for this to be achieved. According to him, “now that the approval of the court has been obtained, government intends to proceed immediately to liquidate the company and start discharging the company’s liabilities.”
Meanwhile, some of the affected clients of Clico, while welcoming the ruling said they would not be satisfied until they got back their money.
Marlon Austin (not his real name) told Stabroek News yesterday that he was “cautiously optimistic” regarding the latest developments. He said that several promises have been made by the government in the past, and according to him, he would not be satisfied until “something concrete” is on the table. He said yesterday when he contacted the company he was told that a plan is being worked on.
When told about Thursday’s meeting, Austin said that since April he had been told that a meeting would be held with policy holders at the National Cultural Centre. He questioned why such a meeting was not held earlier.
Austin and his wife had taken out a joint Executive Annuity Policy with the company in 2003. The policy was offered to persons 50 and over, and the couple invested almost all of their life savings. This investment was in the millions of dollars. Since then they have fallen on hard times, struggling to find money to meet bills.
Another affected customer, Ramesh Persaud, said he was relieved by the court’s ruling but he still had some uneasy feelings. He said he wanted the government to honour its commitment right away and to pay the customers all their money. “The government can dip into the treasury, buy the property and sell them off later,” he said. According to him, the matter has gone on for too long, and the suffering of people needs to come to an end. He said he will be attending Thursday’s meeting with the hope that a clear process will be outlined as to how and when they will get back their money.
Clico (Guyana) invested $6.9 billion (US$34 million) in Clico (Bahamas) which represented 53% 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, recommended that the company be wound up but the move was subsequently challenged by directors.