Chief Justice (ag) Chang’s ruling that Clico (Guyana) be wound up will bring immeasurable and welcome relief to hundreds of hard-working Guyanese who had health and other insurance policies with the company and had been lured by unrealistic rates to invest in a business whose parent was spinning Ponzi-like schemes. Taxpayers will also in effect have to contribute again to rescue the significant and ill-advised NIS investment in the company. After waiting for 18 months there is now a real hope that early disbursals will begin from the remaining assets of the company here and later, the government guarantee. This, however, must be free of political intervention and left to the technicians.
President Jagdeo’s summoning of a meeting on Friday of policyholders and investors in Clico could probably be justified on the grounds that he was the one, as the Executive President of the country, who pledged that no depositor in the insurance company would lose any of their money. Having held this meeting, it is now for the President to withdraw completely from what is a technical process as enshrined in the Insurance Act and the Companies Act and as pointed out by Business Columnist Mr Christopher Ram in yesterday’s Sunday Stabroek.
On the face of it, the President seems to have other ideas as witnessed by his questioning of the Central Bank governor and his own explication of the sequence of payments and his suggestion that segments of the insurance portfolio of Clico be hived off and sold. The latter had been spoken of much earlier as it appeared that one of the existing players in the insurance industry and one favoured in certain government circles has already ‘eyed up’ the portfolio and would no doubt be preparing to bid with every likelihood of winning out a la Synergy and the Amaila Falls road. Time will tell how things evolve. Save to say, that good and lawful governance is at stake in the disposing of the obligations to Clico customers and President Jagdeo should be acutely aware of this, particularly in light of previous unlawful and unconstitutional interventions such as his extension of the life of the Ethnic Relations Commission.
That aside, the Clico saga will be incomplete without an independent and exhaustive probe of how the company sank ignominiously into bankruptcy and its apparent uneven treatment of clients just prior to the company being placed under judicial management. President Jagdeo in January 2009 was well-positioned to order an independent probe of Clico (Guyana) on the first sign of trouble. He however ill-advisedly accepted the assurances of the company’s Head Ms Geeta Singh-Knight and also talked up the financial condition of the company. The bottom eventually fell out of Clico but even then the President adamantly refused to accept the wisdom of a full-scale probe even though Trinidad had taken the lead in probing the actions of its parent company.
It later became clear that a series of questionable transactions had been blessed by the government here, particularly the purchase by the NBS from Clico of the Berbice Bridge bond enabling a payout to investors who had desperately begun to withdraw their monies from Clico on learning that the company was about to collapse.
After 18 months, President Jagdeo’s cynical proposal at Friday’s meeting to convene a probe of both Clico and Globe Trust has no shred of credibility whatsoever. Globe Trust should have been investigated from the inception and Clico at least 16 months ago. When will the results of these managed probes become available? When President Jagdeo is no longer President and the culpable officials are no longer in office? Given the President’s disposition to previous calls for inquiries on monumental issues such as the death squads and Roger Khan it is unlikely that he would agree to a swift probe headed by an independent figure who would not be susceptible to presidential pressure.
President Jagdeo has therefore forfeited the opportunity to convene this probe. This probe and many others neglected during his tenure can now properly be ordered by the new government to be formed at the next elections as there must be answers to the Clico fiasco and a variety of other scandals. While a future probe of Clico may be of little consequence to President Jagdeo because of his immunities, there would be a number of government officials, technocrats and Clico employees who should come under rigorous investigation for their actions.
A template can then be formed by the incoming government for broad agreement on how to address longstanding probes such as the reign of Roger Khan and the killings of hundreds by the phantoms and other gangs. The country cannot move confidently and resolutely forward without these answers. A full Clico probe can be a first step in this direction.
