(Trinidad Express) – A high court judge on Wednesday ordered the now defunct CLICO Investment Bank (CIB) to repay a $700 million deposit to the National Insurance Board.
The ruling centred around the definition of an Investment Note Certificate and whether such deposits were guaranteed under the January 2009 Government bailout of the cash-strapped CL Financial Group.
The ruling follows a separate decision in July, when another judge ordered insurance company CLICO to repay approximately $58.7 million to six Executive Flexible Premium Annuity policyholders.
In yesterday’s decision, High Court Judge Peter Rajkumar ruled that an Investment Note Certificate (INC) is in fact a deposit and not a security, as argued by attorneys representing CIB. As a result of yesterday’s ruling delivered by Rajkumar, a total of 15 deposits—12 in United States currency and three in T&T dollars, with a value exceeding $700 million—will be returned to the National Insurance Board (NIB).
NIB’s total US deposits carry a value of US$102,506,128.64. Converted to TT dollars, this amounts to $659,114,407.15. NIB’s TT deposits are worth $46,490,993.49.
This brings the total of the deposits to more than $705.6 million to be returned to the NIB.
The judge further ordered that the money was subject to interest of six per cent per annum from the date of the maturity of each INC—some of which ranged between January and July 2009.
As of yesterday, until CIB pays NIB, it (NIB) will also get statutory interest at a rate of 12 per cent on what is due. Between January 2009 to January 2011, the interest on the deposits would be in the range of $84 million, bringing the total with interest up to January 2011 to around $789 million.
The National Gas Company (NGC) which was initially involved in the matter, withdrew its application in March.
The NIB and NGC had combined deposits of $1.8 billion.
Senior counsel Deborah Peake and attorneys Kerwyn Garcia and Marcelle Ferdinand represented the NIB, while senior counsel Reginald Armour and attorney Ian Benjamin appeared on behalf of CIB.
In addressing Rajkumar, Armour urged the judge to refrain from ruling on the issue of rates of interest, since Parliament amended the Central Bank Bill two weeks ago.
The amendment means that policyholders cannot engage in legal action against Government to access their money in CL Financial subsidiaries like CLICO and CIB.
