Home' Trinidad and Tobago Guardian : September 4th 2014 Contents SEPTEMBER 2014 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
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At times it seems like there is a cartel in operation
when it comes to making payments or transferring
There is a daily limit on Linx transactions, and
personal cheques are often not accepted due to the
risks of not being honoured. Meanwhile, a certified
US$ draft issued by a local bank takes a whopping
20 working days to "clear" if deposited at another
local bank. If, instead of a bank draft, a wire transfer
is done, the charge is US$13.25 plus US$30 in addition
to the amount paid to the origin bank.
Naturally these prohibitive costs push consumers
towards credit card payments whereby bankers earn
a percentage commission on every payment in every
industry regardless of the period of credit extended,
if any. Needless to say, bankers do not really have to
lend money to make substantial profits given this
I was listening to a feature on BBC radio about the
investments and strides made in Kenya to facilitate
the low-cost transactional platform, M-PESA. Appar-
ently it has gone viral, allowing Kenyans to leapfrog
fixed internet services and take advantage of the more
affordable mobile internet services. This has made
available financial services to lower socio-economic
groups that are normally excluded from traditional
banking---"unbanked poor people", according to the
World bank Web site.
This takes me back once again to a point I have
been making repeatedly about our local economy
and market imperfections. Too many people are being
excluded from vital sectors in our economy, which
is something an already small economy cannot afford.
If we are serious about economic development, those
in authority need to work to make some substantial
changes to how our economy operates.
On February 28, 2014, the publicly traded Company
LJ Williams Ltd belatedly held its annual general
meeting for financial year ending March 31, 2013.
Shareholders were advised that the reason for the
belated AGM was that the company was struggling
to give shareholders better news after years of financial
drought, especially for this company.
The company proudly announced a dividend of
0.02 cents per A common share and 2 cents per B
Common share. Indeed, meagre by current economic
conditions in T&T. That announcement was earlier
published on February 13, 2014, in the Trinidad
Guardian after the company had turned yet another
However, more than six months later, shareholders
continue to experience the financial drought while
they wait in vain to receive their meager dividend
cheques. And this, notwithstanding the company's
hefty profit from disposal of assets (Algico shares)
estimated at $1.5 million.
I am aware that all publicly traded companies in
T&T pay out dividends within approximately three
weeks of declaring. I am aware that these are efficient
companies which pay satisfactory dividends. Some
of them record attrtactive dividends. I do not recall
any of them recording such low dividends and then
compelling shareholders to wait more than six months
for the pittance.
I am a shareholder of LJ Williams Ltd. I am also
a shareholder and beneficiary of Williams Holdings
Ltd, which controls LJ Williams Ltd and in which
my late father, Louis Jay Williams, vested his hard
earned assets for the benefit of his progeny.
I am puzzled by this inordinate delay in distribution
of dividends which were declared by this publicly
traded company more than six months ago. In this
regard, I am uncertain what the laws require, but I
am certain that it is not the general practice of other
publicly traded companies.
I am sure that the executive and non-executive
directors do not wait this long for their cheques.
Patrick J Williams
Anthony Wilson, with reference to your
article in last week's Business Guardian
titled, "Are we close to down the road'", I
would like to offer a few suggestions.
The article does not differentiate between
the liabilities on the books of CLF and the
liabilities on the books of Clico. In my mind,
Clico is its own stand-alone entity whose
liabilities cannot be co-mingled with that
of its' affiliated Companies. Clico operates
in a regulated environment and is an entity
that is governed by the Insurance Act.
Within that act, the rights and returns
accrued to policyholders should be clearly
defined and separate.
The assets via the statutory fund should
be allocated to Clico's policyholders liabilities
first and foremost. In that regard, according
to Clico's 2012 annual report, the methanol
shares are owned by Clico itself (not CLF)
and do form part of the assets in the statu-
tory fund. If this is still the case, the proceeds
from the sale of those shares, upon reali-
sation, are legally required to settle the pol-
icyholders' liability first, and other creditors
If there are any surplus funds left over,
then those should be allocated to Clico's
shareholders (that is, CLF and the Govern-
ment of T&T). Admittedly, GORTT is now
the largest policyholder, having assumed
the rights of all individuals who accepted
the payout offer, and thereby is among those
with first claim to Clico's assets, up to the
value of those policies.
In the case of a sale of Clico's portfolio,
the Central Bank in its role as the regulators
would have first rights to these assets to
fairly and adequately assign to policyholders.
This is because you cannot sell the liabilities
of an insurance company to a third party
without transferring assets (of a suitable
class so as to satisfy statutory requirements
of the purchaser. No insurance company
would buy Clico if that is the case.
Also, it must be justified that the value
realised upon the sale of the methanol com-
pany is at the fairest value that can most
likely fill any deficits in Clico's statutory
fund. If it can't, then, ideally ,it should not
be sold until the best value can be realised.
In summary, the main point is that the
liabilities of Clico should be clearly separate
and dealt with in accordance with the laws
under the Insurance Act. It should not be
co-mingled with the liabilities of CLF.
Looking forward to your views on the
Long wait for
CLF and Clico's liabilities
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