Home' Trinidad and Tobago Guardian : January 22nd 2015 Contents JANUARY 2015 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
The new shareholders agree-
ment between CL Financial
and the Government is in the
final stages of negotiation and
is expected to be finalised and
signed by the end of February, officials told
the Business Guardian on Tuesday.
Declining to reveal the amount of money
being discussed, the officials would only
say the new agreement would indicate the
timeframe in which all matters would be
One official, who is involved in the final
resolution, refused to confirm or deny claims
that Clico has enough cash to settle out-
standing claims to policyholders who did
not accept, or were not offered, the com-
bination of cash, zero-coupon bonds and
units in the Clico Investment Fund that
most policyholders accepted in 2011 and
About 900 policyholders, who are owed
an estimated $1 billion, did not take or were
not offered the original settlement.
The official said it was not "entirely correct
to say Clico has money, as they also have
liabilities which need to be settled."
Referring to government s intervention,
the officials agreed that the estimated $10
billion that the Government has already
paid to policyholders, needed to be repaid.
"Just like the policyholders who are await-
ing payment so, too, government is also
awaiting payment," one official said.
In an attempt to get answers, the United
Policyholders Group intends to pressure
Finance Minister Larry Howai and officials
of CL Financial and Clico into revealing the
true financial status of those companies.
The group comprises the 350 policyholders
represented by attorney Ramesh Lawrence
Maharaj, private individuals who retained
policies based on government s promise to
honour them, and former company officials
who were barred from cashing in their var-
The group said it intends to ask Minister
Howai and other Clico officials to provide
a breakdown of the company s assets and
the total value; list what assets were sold
and how much was received for it and when;
what the proceeds of those asset sales were
used for and where those monies are; what
assets are remaining and their total value;
and explain what criteria will be used to sell
the remaining assets.
Declaring that "it was time the public,
policyholders and taxpayers are told what s
really happening behind the scenes," several
of the policyholders said they had not been
provided with any financial statements since
government assumed control in 2009.
"There have been no financial reports
produced for CL Financial for 2009 to 2014,
but the board is making decisions such as
selling off assets without informing poli-
cyholders, shareholders and taxpayers," one
Questioning why policyholders were being
held to ransom by government, while cred-
itors were receiving 100 per cent of their
money back including interest, the united
group said the time had come for "trans-
parency and accountability."
At a press conference two weeks ago at
Gaston Court, Chaguanas, Maharaj claimed
that Clico had $17 billion in cash; and that
it was an estimated $1.7 billion that was
needed to settle all outstanding claims.
Confirming this on Tuesday, a former
official produced a copy of an Ernst & Young
median valuation which was done in 2013,
which stated that Clico had over $9.9 billion
in cash and cash instruments.
The ex-official also claimed that when
Methanol Holdings was sold, those proceeds
went to CL Financial.
That was estimated at approximately
US$1.175 billion or $7.5 billion.
Adding that Clico has continued to receive
dividends and conduct business as usual,
another official estimated that the company s
cash reserves now stood at $20 billion.
Several policyholders said they have been
told by company officials that they would
not be paid unless the Central Bank issues
a directive via the Ministry of Finance; hence
their renewed call for Howai to provide an
update on the company s financial stand-
Meanwhile, well-placed sources on Tues-
day sought to assure the policyholders that
a new agreement was currently being
finalised, which would soon bring a reso-
lution to the outstanding issues.
Maharaj appeals court ruling
During the press conference, Maharaj
revealed that he had filed an appeal before
the Privy Council; challenging the Court of
Appeal s ruling in government s favour.
Maharaj claimed the Court of Appeal
erred in several areas including allowing
government to withdraw its concession that
the policyholders had legitimate expectations
based on promises made by the previous
government; that the promises made by the
last administration were not clear; that gov-
ernment was justified in breaching the legit-
imate expectations of the policyholders; that
there was sufficient overriding public interest
to justify government departing from any
legitimate expectation; and their ignorance
of the judge s finding of fact and their failure
to explain why it did this.
Sections 37 and 80 and of the Insurance
Act speaks to a statutory fund which compels
the governme.nt of the day, to ensure that
an insurance company has sufficient assets
or money in that fund, so that the policy-
holder would not suffer in the event that
the company goes into liquidation.
Maharaj said when the former People s
National Movement administration recog-
nised that Clico and CL Financial were expe-
riencing financial difficulties, the Finance
Minister at the time made an open state-
ment, promising policyholders not to remove
their monies and investments - as they
would guarantee its return.
Maharaj said based on the announcement
and because they believed the government
guarantee could be relied upon, they did
not withdraw their money.
Contacted last week, Maharaj again
declared his support for the policyholders
whom he said, were only fighting for what
"rightfully belongs to them."
Asset sale timeframe
in new CLF agreeement
No decision has been made on whether a
third mobile provider would be allowed to enter
the T&T market.
Finance Minister Larry Howai made the con-
firmation on Tuesday. Howai, along with Public
Utilities Minister Nizam Baksh, and Science
and Technology Minister Rupert Griffith formed
an inter-ministerial committee which met last
week, with officials of the Telecommunications
Authority of T&T (TATT).
The meeting comes on the heels of the
announcement made last Thursday, by Jamaica s
Science, Technology, Energy, and Mining Min-
ister Phillip Paulwell that the island had approved
the proposed acquisition of Columbus Com-
munications by Cable & Wireless Communi-
Commenting on the Jamaican government s
decision, Howai said: "No. I don t think
Jamaica s decision will have repercussions for
the Caribbean. We would make our own decision
and we would make the decision in the context
of what makes the most sense for this market.
I don t see a problem."
Commenting further on last week s meeting
with TATT, Howai said the authority had until
Monday to give the feedback to the committee
so it can make a decision on whether or not
to invite another mobile provider into the T&T
"There was some feedback we needed to get
from TATT, which is not due until next week.
I think it is Monday. We said okay. We under-
stand the issues but there are some regulatory
concerns that we understand TATT would have.
We ourselves haven t put any questions to them.
We did discuss it in general terms, some of the
issues. I can t remember some of the details
off the top of my head at this moment."
He said TATT is doing a full report on all of
the risk issues.
Howai added that the decision of giving the
green light to another mobile provider, is broader
than deciding whether or not it makes financial
sense for this market. He said there are national
security issues as well as what the approach
would be in developing the infrastructure fur-
"There are a number of things (to deliberate
on), whether it creates a monopoly structure,
or virtual monopoly structure. What are the
implications likely to be with the continuous
expansion of this infrastructure throughout the
country. What are the risk issues from a point
of view of things like national security because
everyone uses the telecom backbone to com-
municate locally as well as internationally."
Commenting on whether the T&T market
can accommodate a third player, Howai said:
"There is a feeling of generally three is a good
number to have. The third provider will, of
course, have some challenges. Yes. You will
have a price war which will be to the benefit
of the consumer. Who can keep their cost at
the lowest level and provide the best quality of
service will be the one who will benefit."
Asked whether any of the regional leaders
approached the Government to create one ICT
platform in the region, Howai said: "I am not
aware. If they did, it would be through Science
and Technology Ministry."
No decision yet
on third mobile
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