Home' Trinidad and Tobago Guardian : May 29th 2014 Contents A5
Thursday, May 29, 2014 www.guardian.co.tt Guardian
The report by the Colman Commission on the
Clico/HCU enquiry will be published shortly and
recommendations in it will be used to strengthen
upcoming new credit union regulations, says Fi-
nance Minister Larry Howai.
He revealed that in Parliament yesterday while
piloting a bill to provide for the purchase by Gov-
ernment of certain rights belonging to shareholders
and depositors of the Hindu Credit Union (HCU)
and to empower the minister to make payments
and issue bonds for the purchase of those rights.
Howai said the report by the commission, which
was headed Sir Anthony Colman, is anticipated
He said the recommendations would be incor-
porated into legislation now being finalised to
strengthen credit union law, which would be brought
to Parliament in the near future after consultation
That legislation aims on giving greater supervision
to the credit union sector.
Howai said: "There have been some howls of
protest on the basis of the initial draft of the bill
which went out and we made changes to reflect
some of the representations being made by the var-
"There can be no compromise of the measures
we need to ensure proper and effective governance
for the supervision and management of the credit
union sector, to ensure appropriate limits and reg-
ulations are made and to ensure the system of gov-
ernance is one that would create a regime that will
prevent the mistakes of the past and lead to sounder
more robust institutions in the sector."
Howai said since the HCU was in liquidation and
as liabilities exceeded assets there was little likelihood
shareholders positions would be made good by the
sale of the company.
He said Government was therefore moving to
acquire rights of the depositors, investors and share-
holders. He said it was Government s moral duty
to treat HCU investors as equally as Clico share-
Phase one of the plan to deal with HCU investors
was completed with payments to those who had
deposits of $75,000 via cash payment and they
would now receive the remainder of the shares held
in zero coupon bonds. About $60 million in payments
have been made so far, he added.
Over 200,000 depositors were affected by the
HCU collapse, he said. The company had 86,000
investors at a total value of $602.8 million and
128,000 shareholders to the value of $76 million.
Howai said credit union assets in T&T involved
one third of the working population, amounting to
significant assets of $9.5 billion and there was a
lesson to be learnt in the HCU issue regarding super-
vision and regulation of such companies.
People s Partnership MP Suruj Rambachan, who
said he was an HCU investor, claimed the People s
National Movement (PNM) government knew of
HCU s impending woes for 27 months.
He read out a report by the Commissioner of Co-
operatives in 2007 recommending an enquiry into
HCU, noting members could have been in serious
jeopardy of losing shares, which could have impacted
on the system and embarrass the government.
"They knew what was going on. Why didn t they
do something about it? PNM didn t act. Why? If
there was early intervention something might have
been done," he said.
He said PNM finance minister Conrad Enill was
made to withdraw a statement that the HCU was
Rambachan questioned if the PNM kept the issue
quiet at the time for political reasons.
On PNM accusations that the former FCB chair-
man was on multiple boards, Rambachan said under
the PNM, Sam Martin was chairman of multiple
boards. Rambachan said the HCU situation was a
national lesson of "ambition unchecked, greed and
Government is moving to pay out about
$500 million to depositors of the former
Hindu Credit Union but no money will
be paid to wrongdoers, Minister of
Finance and the Economy Larry Howai
said during his windup of yesterday s
debate on the Purchase of Certain Rights
(HCU) Bill in Parliament.
One of the major provisions of the bill
is to authorise the Minister of Finance to
sign agreements, make payments and issue
bonds to purchase the rights belonging to
the HCU shareholders and depositors.
In addressing concerns raised by PNM
MP Colm Imbert that those responsible
for HCU s collapse could benefit from the
payout, Howai stressed: "Under no cir-
cumstances is the Government prepared
to make any payment to any related parties.
This is not about bailing our wrongdoing.
We are bailing out the innocent victims of
this particular situation."
He said the former credit union operated
like a runaway horse and caused grief to
individuals who invested in it.
He told legislators that amended legis-
lation would be brought to Parliament soon
to ensure there was no repeat of the HCU
fiasco and assured there would be the
implementation of a regime of measures
that would prevent a recurrence of such
"We will be able to move earlier, more
effectively and we will be able to make
stronger decisions to deal with the specific
issues," he said.
Howai said several stakeholder recom-
mendations were included in the proposed
credit union legislation that would be
brought to Parliament shortly. The minister
said, however, that nothing was being done
to weaken the sector.
According to Howai, a regime of legis-
lation, relating to the insurance industry,
the securities industry and credit unions,
will be in place by the end of the year.
Howai also defended a decision to have
former First Citizens chairman Nyree
Alfonso on several boards at the same time,
which was raised earlier in the debate by
St Joseph MP Terrence Deyalsingh.
Howai said such a situation was neces-
sary for consistency. He said the banking
sector was regulated by the Central Bank
and if it felt there was an issue it would
have said so.
"There is good reason for why the struc-
ture is the way it is," he added.
He said Alfonso, who was removed as
chair of the board in the wake of the First
Citizens IPO fiasco, was "not doing any-
thing that I think could have been con-
sidered as being improper or certainly the
Central Bank would have made a comment
had that been so."
Also yesterday, Prime Minister Kamla
Persad-Bissessar, Opposition MP Terrence
Deyalsingh and Speaker Wade Mark
extended Indian Arrival Day greetings to
They spoke of the historical significance
and the contributions of the East Indian
community since arriving here 169 years
ago from India.
Persad-Bissessar and other MPs were
dressed in traditional East Indian clothing
to mark the occasion.
Hindu Credit Union head Harry Harnar-
ine and other directors or managers of the
failed credit union might profit from Gov-
ernment s legislation to purchase HCU
shareholders and depositors rights, People s
National Movement MP Colm Imbert
He voiced the concern in Parliament, saying
he would not support the legislation unless
Government amended it to prevent that sce-
He spoke after Finance Minister Larry
Howai piloted the bill to bailout several cat-
egories of HCU depositors and shareholders,
via buyout of certain rights.
Throughout Imbert s contentions Howai
was heard trying to clarify the situation across
the floor. Immediately as Imbert concluded
and the Parliament took the lunch break,
Howai and Imbert got into a brisk conver-
sation to clarify the issue.
In his contribution, Imbert said the bill
was a "corrupt piece of legislation." He
expressed concern that "connected parties
to the HCU, such as Harnarine and other
HCU shareholders who were directors or
managers, might benefit from the bill.
"You are opening the door for Harry and
those other people to profit from this. No
way can we support using taxpayers money
to fund this HCU bailout and allow such
crooks and thieves to benefit from this,"
The bill also needed to be changed, he
said, since people who contributed to HCU s
collapse may file court action to say they
were treated unfairly and may try to claim
He said unless the law was changed, he
may be inclined to believe the bill would be
used to help out people who had helped out
the United National Congress (UNC).
Imbert said Harnarine had said in the Col-
man commission on Clico/HCU that he was
a UNC financier.
PNM MP Terrence Deyalsingh, in debate,
noted HCU s business links with businessman
He said the PP would have known
Jaikaran s history, yet the Government still
put him on Caribbean Airlines board and
that board had to be fired after a $1 billion
He said the only PP ministers who were
saving the Government were the Ministers
of Finance and National Security.
Deyalsingh said Government had not learnt
from the HCU experience and former FCB
chairman Nyree Alphonso had sat on multiple
boards like the HCU scenario.
Condemning Harnarine repeatedly, he said
Harnarine "played on the word Hindu to the
detriment of poor people.
"We should have legislation to put people
who do things like that where they belong,
in Golden Grove. Those people belong in
Golden Grove," he added.
He said it was a pity no criminal or civil
action could be taken against Harnarine now.
Deyalsingh said a "circuit breaker" system
should be implemented at the Securities and
Exchange Commission to alert traders to
...Imbert wants changes to bill
Finance Minister Larry Howai, left, chats with St Joseph MP Terrence Deyalsingh, centre,
and Diego Martin North/East MP Colm Imbert during the lunch break in Parliament
yesterday. PHOTO: SHIRLEY BAHADUR
Govt to pay HCU depositors $500m but..
No $$ for wrongdoers
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