Friday, March 06, 2009

Here we go BJ

AS the Colonial Life Insurance Company’s (CLICO) financial turbulence spreads throughout the Caribbean, SKNVibes has learnt that several of the larger institutions in the Federation have substantial investments in the now-struggling company and collectively could lose $300 million.

The list reportedly includes high-profiled financial institutions, private companies and local investors. The $300 million also includes the hard earned savings, investments and pensions of average citizens.

Minister of Finance, International Trade and Commerce, Hon. Dr. Timothy Harris has revealed that this figure represents the total amount that the people of the Federation have in [the subsidiaries of] CL Financial, either in terms of investment or policy holding. CL Financial is the parent company of CLICO and British American insurance companies.

“We totalled the values of all our deposits made by locals in all the company’s subsidiaries. If the worst were to happen then we [local depositors] have EC $300 million that they may not get back. This is how much we actually stand to lose.”

The Minister along with Financial Secretary Janet Harris and Director of Financial Services Fidella Clarke flew to Barbados yesterday (Mar. 4) to join other members of the Eastern Caribbean Central Bank (ECCB) Monetary Council, and Prime Ministers and Ministers of Finance of Trinidad and Tobago and Barbados in discussions relating to regulation of the region’s financial sector, redressing the issue and limiting further exacerbation of a bad situation.

Harris told SKNVibes that the CLICO matter had to be dealt with in swift time to avoid further exposure of the region’s finance sector and wider economies.

“We must act quickly to maintain control over the situation. The longer this situation prevails, the more the situation worsens. As local and regional markets lose confidence in the financial sector, more and more persons withdraw their money as banks withhold monies from lending also. The longer we stay to put forth a solution, the more the situation automatically worsens.”

In early February, Chairman of Colonial Life Insurance Company (CLICO) Holdings Barbados Ltd, Leroy Parris told the Kittitian populace that what had happened in Trinidad only affected the three subsidiaries in the that territory (CLICO Life Insurance, British American and CLICO Investment Bank) and not those across the Caribbean.

“I give the public and policy holders of St. Kitts assurance that their pensions, policies, deposits and all their investments in this company are safe and secure. The parent company is not in trouble; the parent company is rich in asset. The company is secured.”

Parris also asserted that CLICO Barbados Holdings Ltd. does not repatriate funds from Dominica, St. Kitts, Antigua, St. Lucia and Barbados to Trinidad.

CLICO’s parent company CL Financial Group is the largest privately held conglomerate in Trinidad and Tobago and one of the largest privately held corporations in the entire Caribbean. In early January the company reported financial difficulty and sought rescue from the Trinidad government. Under an MOU, the government and Trinidad Central Bank agreed to bail out the company in exchange for controlling interest in some of its subsidiaries. The Central Bank also took control of the conglomerates financial institution, Republic Bank.

The future of CL Financial and its regional empire remain irresolute as a High Court judge recently granted an ex-parte injunction to the Central Bank of Trinidad and Tobago and CLICO which prevents the parent company from selling, liquidating or otherwise conducting any business with its assets.

The injunction also dictates that CL Financial has to disclose the identity, and location of all or any assets of CLICO in or out of the jurisdiction. CLICOs across the region are concurrently registering their own dilemmas as a result of the CL Financial backlash.

Currently, CLICO Guyana has been placed under judicial management, CLICO Bahamas is under a liquidation order to sell off its assets, CLICO Trinidad is being controlled by their Central Bank, and the government of Barbados is trying to acquire their local branch of the insurance company.

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