(Trinidad Express) Minister of Finance Larry Howai confirmed yesterday that Colonial Life Insurance Co Ltd (CLICO) is to be sold.
He stressed however that the price must be right. Speaking at the meeting of the Standing Finance Committee of the House of Representatives, Howai also revealed that Government would be paying out before the end of this year $258 million to several Eastern Caribbean states for managing the costs involved in the CLICO fallout.
The House was going through the expenditure in the Ministry of Finance allocation of $9.4 billion in the 2014/15 budget. The Minister was also questioned by Diego Martin North East MP Colm Imbert about $150 million which was paid for legal counsel by the Ministry of Finance in 2014 as well as on the $1 billion spent to join the Andean Bank over the last three years. On the issue of CLICO, Howai said Government made no provision for Atrius in 2015 because it was no longer pursuing the option of that company taking over the assets of CLICO. “We expect that we would be discomposing of the portfolio by way of a portfolio sale,” Howai said. Asked by Imbert why, Howai said Government would have had to invest $1.5 billion more to purchase the assets of CLICO and to capitalise the company under the new insurance regime. “So yuh winding up CLICO? Imbert asked. “Yes…The intention is to sell. It depends on whether we get the price that we are looking for. If we do not get the prices we are looking for… then it would have to continue to operate under Section 44,” Howai replied. Asked by Imbert what would happen to the staff, the buildings etc, Howai said there was no staff. Howai said Government was in the process of getting the valuations done and was also in the process of hiring an investment bank to advise it on how to proceed, once the valuation comes in.
Howai also confirmed that Government paid $258 million to the Organisation of Eastern Caribbean States (OECS) in relation to the CLICO collapse. Howai said this money was a grant, not a loan. Asked by Opposition Leader Dr Keith Rowley whether there were any assets of CLICO in these countries which could have been taken, Howai said attempts were made to realise the assets of CLICO but very few of those assets were domiciled in the Eastern Caribbean states. “So the net effect of what could have been realised would have been very minimal,” he said, adding that Government did not ask for any additional assets to be assigned to Trinidad and Tobago. Howai said however that there had been constraints on the Trinidad and Tobago banks owning or acquiring banks in the OECS. He said as a condition of disbursement (of the $268 million), Government asked those countries to remove these restrictions and also asked those countries to put mechanisms in place to strengthen their regulatory environment so there is no repeat of the CLICO debacle.
Howai also confirmed that $150 million was paid by his Ministry for legal counsel and other advisory services. He said most of this money was paid for the CLICO/HCU enquiry. Imbert asked: “Who on earth are you paying $150 million to, for legal services? Which lawyer so lucky to get $150 million from the Ministry of Finance? Could we get details of what this legal counsel is all about? Who are the attorneys? How much you are paying them? Why are you paying them? What is it for? “
