The parliamentary opposition parties have intensified their call for an independent probe into the collapse of Clico (Guyana), saying that there are still many unanswered questions about what precipitated the collapse of the company.
Clico (Guyana) was recently ordered liquated by acting Chief Justice Ian Chang, paving the way for the government to honour its guarantee to reimburse thousands of policyholders and investors in the company. President Bharrat Jagdeo, while outlining the repayment plan at a recent meeting with policyholders, also promised to initiate investigations into the affairs of both Clico and Globe Trust prior to their collapse. He pledged that appropriate action would be taken against culpable persons should irregularities be found. “I am prepared… at some point in time to investigate what took place in both institutions so if there are culpable people, we should take action against them. I am prepared to do that,” Jagdeo said. Following the meeting, Jagdeo told Stabroek News that he would be setting up a team for the investigation. “We can move forward with this. So I’m going to set a team to look at both,” he said. He said that this team would most likely comprise local personnel.
In the past, the President had been reluctant to conduct an investigation into the company, saying that it would serve no purpose. He said repeatedly at press conferences that there was no evidence of criminality with Clico (Guyana) but rather a case of bad investment. He said too that an audit of the company proved that this was indeed the case.
However, the recent announcement by Jagdeo has been greeted with much scepticism by the opposition parties, and the Alliance For Change (AFC) has pledged to use the Economic Services Sectoral Committee within the Parliament to have an inquiry into the financial debacle. In a release issued last week, the party said it “will renew its application in the Economic Services Sector Committee for an inquiry which was blocked early last year” by PPP/C MP Gail Teixeira through her interpretation of the sub judice rule in the context of winding up proceedings then before Chief Justice Chang.
While it “supports the policyholders being paid their entitlements,” the party said that Clico (Guyana)’s transfer of $6.9 billion to Clico (Bahamas) in 2006/2007 was “criminality of an extraordinary magnitude.” It argued that this transfer was only facilitated through presidential intervention, which permitted slackness in the regulation of the company.
“Having created the financial turbulence through massive misfeasance and flagrant law-breaking which in the first place caused Clico policyholders so much trauma and loss, the President now showboats himself as the chivalrous lifeguard bringing them to safety. He is now Champion of policyholders,” the AFC said.
The party said it is very pessimistic that any inquiry will be held by the Jagdeo administration. According to the AFC, an investigation would lead “to the intellectual authors” of Van Beek’s shooting and will also reveal “the extent and nature of the President’s involvement in this sordid episode.”
Regarding its application to push for a probe via the Economic Services Sector Committee, the party said that is hopes that the PNCR and “conscientious PPP members of the committee” will compel the attendance of Finance Minister Dr Ashni Singh, CEO Geeta Singh-Knight and Bank of Guyana officials, who released the monies to Bahamas and/or Florida. The party said that as part of the inquiry, the AFC will try to identify those who managed to withdraw their money as a result of insider information and why the New Building Society (NBS) was so quick to buy Clico shares in the Berbice Bridge and where the money went.
PNCR Executive member Lance Carberry, during a press conference on Friday, said that his party wanted to be fair and to give the President an opportunity to fulfil his promise to conduct an investigation. “We are giving the President the opportunity to prove that his word is his bond,” he said, adding that if the President failed to deliver on his promise it would justify whatever scepticism there may be regarding his promises.
Questioned about the President’s continued linking the Clico probe with Globe Trust, Carberry said that there was nothing preventing a probe into Globe Trust all along. “The government, in its usual propaganda fashion, sought to pretend that Globe Trust was a PNC operation,” Carberry said. “We disabused [him of] that and having been robbed of that propaganda tool, the President has resorted from time to time to threatening an investigation,” he said. “But there is no barrier to an investigation, the party has said very clearly that we would support an investigation,” he said, adding that “the President does not have as a barrier the fact that the party has resisted this investigation.”
Carberry suggested that a probe into Globe Trust is a “red herring” adding that “if the President is really inclined to authorize independent investigations, the party suggests that he could also include an independent investigation into the pillaging and asset stripping of the Guyana National Co-operative Bank (GNCB) by PPP cohorts.”
While indicating his party’s support of the administration’s move to honour the promises made by the President to the nation to protect all policyholders, Carberry said that there needed to be a “full independent investigation of the apparent mismanagement, malfeasance and downright illegalities which contributed to the demise of Clico (Guyana).”
GAP/ROAR MP Everall Franklin said that an investigation into the company should have been an ongoing process. “It’s a travesty of justice, totally unacceptable in a country that calls itself democratic and civilized,” he said. Underscoring the seriousness of the matter, he said that billions of dollars were at stake. He noted too that the government had offered a guarantee to the company even without having an investigation conducted.
Franklin said he was surprised that the President was only now ordering an investigation into Globe Trust when there had been a call for such a probe years ago. He suggested that with next year being an election year, the government may be ordering an investigation into Globe Trust since some of the directors of the establishment have close ties to opposition members. Nevertheless, Franklin said that the probes should be conducted. “Go ahead. Bring it out. Let’s do all investigations,” he said.
The team conducting the probe should comprise both local and foreign persons, Franklin said. According to him, there are enough qualified independent persons who could deal with such an investigation.
He said too that the matter had international implications so overseas persons should also be involved.
Indicating his support for the liquidation of the company, Franklin stressed that it was “not a goodwill gesture” by the government. He said that the government was practically obligated to the insurance company, which in the past had helped to finance various aspects of government activities, such as the annual rally on the eve of Republic Day. Franklin also pointed to how closely aligned the directors of the company were to the government and said it was incestuous that some of the directors sat on government boards. According to him, this was also a problem in private companies where a small group of persons were members on several boards. “This fosters unadulterated corruption,” he stressed.
Justice Chang, when ordering that Clico (Guyana) be liquidated, said available material points “unerringly” in the direction of its insolvency and that it would be against the interests of policyholders to allow it to continue. In his ruling, he noted that the law does not allow any insurer carrying on long term insurance business to invest more than 15 per cent of its statutory fund outside of Guyana. The $6.9 billion invested by Clico (Guyana) in Clico (Bahamas) represented 53 per cent of the local company’s assets.
