(Trinidad Express) Port of Spain: Two scapegoats. That’s how fired chairman of Colonial Life Insurance Company (CLICO) Gerald Yetming has described Central Bank Governor Jwala Rambarran’s decision to terminate him and the company’s chief executive Carolyn John on Friday.
Yetming, who is abroad, said the statement issued on why he was fired was a “blatant lie”.
He provided the letter emailed to him by the Central Bank at 12.39 p.m. on Friday, which outlined why the Central Bank wanted him terminated.
The letter stated: “The Bank has re-evaluated its strategy for the future conduct of the affairs of CLICO and in this regard, the Bank is constrained to discontinue your appointment as chairman of the board. We wish to record our gratitude to you for your contribution to the management and affairs of CLICO.”
But the Central Bank, in a statement issued at 10.49 on Friday night, said it had terminated the appointments of Yetming and John, pursuant to its powers under Section 44 (D) of the Central Bank Act, and appointed Wendy Ho Sing as executive chairman with immediate effect.
The issue revolves around CLICO’s decision to pay over $63 million to former directors, inclusive of their companies and connected parties.
“The Central Bank took this action after CLICO failed to follow direct instructions issued by the Bank on March 26, 2015, setting out the protocols for all disbursements to policyholders and creditors under the CLICO Resolu-tion Plan. These instructions included obtaining approval from the Bank for all payments prior to disbursement,” the release said. Yetming, who on Saturday defended his tenure at CLICO, said at no time was any instruction given to not pay policyholders.
He explained as chairman, he was given an outline of a CLICO Resolu-tion Plan which the bank wanted to implement and which he passed on to John. He said John met with senior executives of the Central Bank regularly and had even provided a list of the related parties and the sums they were entitled to be paid.
“At no point in time was any instruction given to not pay the former directors, even though the bank was well aware. The only instruction I was given was a letter signed by Rambarran to not pay Gita Sakal (former CLF corporate secretary). Why signal her and not the others? The fact that they called her name and not others suggested they had reasons for not wanting to pay her,” he said.
“I am not going to allow my name to be tarnished in that fashion. He has messed up and it’s only because the issue has been made public and it has been a protracted public issue that action is being taken,” he said.
Yetming was a former minister of finance in the United National Congress (UNC)-led government.
The Sunday Express was told Rambarran’s actions were done without approval from the Central Bank board or consultation with the Ministry of Finance.
Despite his dismissal from CLICO, Yetming is still the Government-appointed chairman of its parent company CL Financial (CLF).
Since June 2009, CLF has had a shareholders’ agreement with the Government.
Inconsistencies
On Friday morning, during CCN TV6’s Morning Edition programme, Rambarran defended CLICO’s right to pay the former directors (who are policyholders), saying, “We have to abide by the rule of law.”
The sum was put aside to pay ten former CLICO directors—an insurance company which was broke in January 2009 was bailed out by Government and is now back in the black. Rambarran had said the policyholders were creditors and were now entitled to be paid.
It came after it was reported four former directors and their companies, who were classed as “related parties” when CLICO went bust, have already been paid $36,188,690.90 million. They are Ian Garcia and his company, Events Unlimited; Clinton Ramberansingh and his connected parties (Bianca Ramberansingh and Martina De Silva); Vishnu Ramlogan and Nigel Salina and his company, Nigel Salina and Associates.
All their policies were paid with interest.
The directors include people who were summoned to Sir Anthony Colman’s Commission of Enquiry into CLICO to be cross-examined on how the company had become illiquid but they opted to pay the $2,000 fine instead of giving evidence.
The Sunday Express understands the only correspondence Rambarran had penned to CLICO was to withhold payment from former CLF corporate secretary Gita Sakal after he sought a legal opinion to enable him to do so.
Central Bank sticks to statements
The Central Bank yesterday would not answer additional questions posed by the Sunday Express after it took charge of CLICO on Friday night.
The Sunday Express understands the bank moved into the company’s head office at St Vincent Street, Port of Spain, on Friday night and had the building on lockdown for hours.
The Sunday Express could not get Rambarran to answer what caused his about-turn on the payout issue, whether he would share the instructions CLICO disobeyed, whether the bank would seek to stop further payments from being made and whether it will take any action on funds already paid and whether, under his watch, the firing of the two executives represented mismanagement of CLICO by the bank.
The bank only replied: “Central Bank’s response to all your questions is as follows, Central Bank stands by its two statements issued this week on this matter.”
On May 31, when the Sunday Express exclusively published the directors’ payout story, Rambarran had said: “The Central Bank is bound by its strict confidentiality provisions under Section 56 of the Central Bank Act, Chap 79:02, and is particularly prohibited from disclosing information relating to the customers of an insurance company registered under the Insurance Act.”
On June 1, at the Fourth Monetary Policy Forum, Rambarran had answered questions on the issue with this: “I will not be commenting on the dealings between an insurance company and its customer.”
A day later, Howai said he would look into whether payments were made, and Opposition Leader Dr Keith Rowley called for the Government to instruct Rambarran to not make payments. The Central Bank issued a statement on the subject.
On June 3, the bank said: “Under the 2015 CLICO Resolution Plan, CLICO is making payments to its policyholders and creditors entirely from the proceeds of the sale of its assets.
“In respect of the other former directors and officers of CLICO, where Central Bank and CLICO have not, based on forensic findings and legal advice, contemplated or initiated any litigation against such persons, to date, there would be no legal basis on which CLICO may now withhold payment to them as policyholders/creditors, at the point of liquidating its debts to creditors from its own assets.”
The Central Bank only initiated civil proceedings against former CLF chairman Lawrence Duprey and former CFO Andre Monteil but joined Sakal to the civil matters months later.
Howai and
Rambarran
Yesterday, Finance Minister Larry Howai did not want to answer questions from the Sunday Express when asked whether there was a possible disconnect between his office and that of the Central Bank.
The Sunday Express enquired whether he was comfortable with the bank’s decision to terminate Government-approv-ed top CLICO management and what exactly would be done with regard to payments.
