-Guyana at lowest priority
The Central Bank here says it is monitoring payouts by Trinidad’s CLICO to Bahamian shareholders left stranded after the company was put into administration in 2009 but noted that Guyanese policyholders are in the lowest tier for recompense.
Guyanese holders of policies with CLICO (Guyana) were reimbursed by the Guyana Government. After years of repaying the state of Trinidad and Tobago for the bailout it was afforded, CLICO is now generating profits from its resumed and new business.
The company declared an after-tax profit of TT$2.3 billion in 2023.
Following a report in the Trinidad Guardian about the payouts to Bahamian shareholders, Stabroek News that reached out to Bank of Guyana Governor Gobind Ganga for comment. The Office of Commissioner of Insurance comes under the Bank of Guyana.
“Although the article states that a settlement has been reached to ‘repay all debts owed to policyholders, creditors and government,’ Guyana falls into the final tier for payouts as previously determined by the Bahamian court, making us unsecured creditors,” Ganga, told Stabroek News on Friday.
“We [Bank of Guyana], notwithstanding, remain optimistic about securing a favourable settlement soon,” he added.
CLICO (Guyana) collapsed in 2009 after its Trinidad parent company had to be bailed out by the Trinidad government and its sister companies experienced grave financial problems. This collapse followed its loss of $6.9 billion (US$34 million) in the liquidation of CLICO (Bahamas). Those monies represented 53% of the local company’s assets. The Bahamas subsidiary had invested the money from the Guyana company in Florida real estate which went bust.
At the time of CLICO’s collapse, its liability to Guyana’s National Insurance Scheme (NIS) was $5,482,446,199.00 for thirteen Executive Flexible Premium Annuity (EFPA) Policies which matured over the period 2009 to 2012. Since then, the Camp Street CLICO Building has been transferred to the NIS at a value of $600 million, thereby reducing the reconciled amount to $4,882,446,199.00.
CLICO Guyana had caused approximately $4 billion to be paid into an escrow account pending resolution of court proceedings here against its parent company CL Financial. That account is also collecting payments from agencies that have not yet concluded their transactions.
“We are hoping to have enough assets to pay all debts, we are hoping that by way of sale we will have something by 2020 to fully pay all holders with the exception NIS,” then Minister of Finance Winston Jordan had said in 2016 , while explaining that the NIS might receive payments from out of court settlements.
On Tuesday, Stabroek News reported that the Trinidad Guardian had said that CLICO reported an after-tax profit of TT$2.30 billion for the year ended December 31, 2023 and that it was 271 per cent more than the TT$621.4 million the company declared in its 2022 financial year.
The Guardian stated that the insurance company reported a TT$1.99 billion gain on the disposal of its subsidiary, Methanol Holdings International Ltd, and generated TT$958 million in gross profit from its energy operations. According to the Clico financials, “On December 22, 2023, the sale of the subsidiary, Methanol Holdings International Ltd (MHIL) to Consolidated Energy Ltd (CEL) was completed pursuant to the approval of the shareholders of Clico.
“Clico sold 5,653,700 shares or 56.53 per cent of the issued and outstanding shares in Methanol Holdings International Limited. By this transaction, Clico effectively relinquished control of MHIL and all balances from the statement of financial position were not included as at the year end,” the article said.
Clico’s shareholders are CL Financial with 51 per cent and the Government of Trinidad and Tobago with 49 per cent.
CL Financial liquidator promised The Bahamas “payments shortly,” the article also noted. It pointed to a Caribbean Media Corporation report that stated that the Government of The Bahamas had said that the liquidator of CL Financial, is proposing to declare payments shortly.
“We have been made aware that there has been a settlement with the liquidators and the Trinidadian government or authorities that would make the Clico policyholders whole. The issue we have at the moment is getting the liquidator present to sit down so that we can resolve these things,” Prime Minister Phillip Davis told Parliament.
Last year, the Clico (Bahamas) liquidator was given the authority to accept a US$110.827 million settlement that could fully repay all debts owed to policyholders, creditors and the government of The Bahamas.
In 2016, the APNU+AFC had formalised a deal through which the NIS would recover $5.6 billion which it had lost in 2009 as a result of investing by the now defunct CLICO (Guyana) and taxpayers met that bill.
The parliamentary resolution had been supported by APNU and the AFC, which were members of the then governing coalition. The two parties had criticised the then PPP/C government over its handling of the CLICO (Guyana) collapse.
Having noted in his 2015 budget speech that the Scheme was in trouble and needed an urgent solution since more than 20% of its monies were ensnared in the CLICO debacle and not earning income, Jordan presented the NIS with 20 Non-negotiable Debentures, to be redeemed annually over a period of twenty years, at a fixed interest rate of 1.5 per cent per annum. The first debenture redeemable in January 2017 was worth $317,359,002.94
He had explained that the debentures represented government’s attempts to as close as possible, provide the Scheme with the sums it had invested in CLICO. He, however, said that it was a sad day for Guyanese taxpayers since they would be forced to bear the burden of the payments over the next 20 years.
