Home' Trinidad and Tobago Guardian : June 1st 2014 Contents JUNE 1 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
On Monday May 19, the Cen-
tral Bank issued a news
release in which it made
clear that the traditional
insurance portfolio of Clico
would be sold.
Here, in part, is what the Central Bank said:
"As part of the resolution strategy for Clico,
the Central Bank proposes to transfer Clico's
traditional insurance portfolio for value to an
acquiring insurance company that is well cap-
italized, has a proven track record and the
capacity to honour all obligations to policy-
"In order to achieve this objective, the Act
requires the Central Bank to have a market
price for Clico's traditional portfolio deter-
mined by an independent valuation company.
An independent actuarial firm has, therefore,
been engaged to value Clico's traditional busi-
ness for this purpose and the exercise is still
"Subsequently, the Central Bank will con-
duct the process for the sale and transfer of
Clico's traditional insurance portfolio on a
transparent, open market basis. The Bank has
neither engaged with any prospective buyers
nor made any decision on the structure of
the portfolio transfer."
In the absence of any serious debate or
even discussion on the Clico issue in the Par-
liament, I would like to start a national debate
on whether the decision by the Government
to sell Clico's traditional insurance portfolio
is the right one.
The issue of the sale of Clico is impor-
tant enough to warrant a national debate
for the following reasons:
• Its collapse in January 2009 shook the
confidence of many locals in anything but
the safest investments;
• It was one of the first indigenous insurers
• For many years, it was T&T's largest,
most influential insurance company;
• It was the first local private sector com-
pany to venture into T&T's downstream petro-
• Its sale will reshape the country's financial
services sector in profound ways.
As with previous debates initiated by the
Business Guardian---such as the issue of fur-
ther industrialisation of T&T using its natural
gas; whether RBTT should have been sold to
the Royal Bank of Canada and if Economic
Partnership Agreement with the European
Union was in the region's best interest---all
emails or letters submitted on this issue will
The expectation is that the responses given
by the readers of this publication will shape
the decision of the Government on this issue.
The question might be asked: If the Gov-
ernment/Central Bank has already decided
to sell Clico, is there any sense in debating
Before answering that question, it is nec-
essary to point out that most of the existing
Clico staff, as well as the insurer's agents,
have been put on notice that they will be sep-
arated from the company.
It is also clear that the Government has
quashed the idea of Atrius, a state-owned
company that was established last year as the
successor company to Clico.
By its actions, therefore, the Government
has taken steps to clean Clico's slate in prepa-
ration for sale.
But, it seems to me, the issue of the sale
of Clico will remain a live one until the Central
Bank Governor and the Minister of Finance
have signed on the dotted line.
The national debate is being called for in
the context of the Central Bank Governor's
commitment that the process for the sale will
be conducted transparently and openly and
because there has been a dearth of information
on this issue for too long.
The opening of the debate on the sale of
Clico's traditional insurance portfolio is also
a call for a certain kind of perspective from
the Ministry of Finance and the Central Bank.
In other words, the population needs to be
told the following:
• What are the issues that have informed
the decision to sell Clico's traditional portfolio
rather than transfer it to a state-owned com-
pany with plans for an IPO in five years?
• What is the Government's position if the
offers to buy the portfolio are not in accordance
with the estimate of its value?
• How does the sale of Clico fit into the
overall resolution of CL Financial, which
received at least $20 billion of taxpayers'
There is great interest in hearing from the
trade union movement, Clico employees and
executives both past and present, politicians,
credit union officials, financial analysts, aca-
demics, insurance executives and university
In particular, the views of the following are
being directly solicited: former Clico executive
chairman, Lawrence Duprey, former Minister
of Finance Karen Tesheira, former Central
Bank Governor Ewart Williams, UTC chairman
Wendell Mottley, actuary Kyle Rudden, econ-
omist Terrence Farrell, public affairs com-
mentator Afra Raymond, trade unionist Vin-
cent Cabrera and economist Mary King.
My e-mail addresses are:
National debate needed on sale
of Clico's traditional portfolio
The government of Barbados
is expected to waive more
than BD$2 million in taxes
from the sale of the Almond
Beach Village, the Barbados
Nation reported last week,
citing a PricewaterhouseCoopers report.
Almond Beach is owned by the local Neal &
According to the PricewaterhouseCoopers
(PwC) report: "Management has not taken
into account any amount in respect of stamp
duty or property transfer tax on the sale of
the transaction as they expect these charges
to be waived by the government of Barba-
PwC added: "While we have been provided
with correspondence to support manage-
ment's expectation of an official waiver, we
have not been provided with statutory instru-
ments or other audit evidence adequate to
support the actual waiver. Had the stamp
duty and property transfer tax on the trans-
action been recorded, assets held for sale,
total assets, revaluation reserve and share-
holders' equity would all have been reduced
by BD$2.5 million."
On the same day, the Barbados Advocate
reported that an "interesting bid (has been)
placed for Almond Resort shares."
Citing a trading report of the Barbados
Stock Exchange, the Advocate said, "Someone
wants to buy 100,000 shares of Almond
The bid is outlined in the trading report
of the Barbados Stock Exchange (BSE), which
said the price being quoted is two Barbadian
cents a share.
Quoting an unnamed financial analyst,
the Advocate's Business Monday said that
both the bid and the price are very inter-
esting in light of Almond Resort's quoted
price on the BSE. The last quoted price for
Almond Resorts shares on the BSE was 32
Barbadian cents a share.
In its January 2014 Quarterly Bulletin,
the IDB had said, "The falloff in tourism
value-added and the effect it had on the
other productive sectors resulted in the gov-
ernment of Barbados increasing its focus
on the industry and earmarking it as a key
sector to propel macroeconomic stability.
As such, various tourism-related capital
projects (for example, Four Seasons, Almond
Beach Resort, and Silver Sands Hotel) have
been listed and are anticipated to help take
the economy out of recession and spur
Almond Resorts Inc, a subsidiary of the
Neal & Massy Holdings group, has been in
asset disposal mode for almost three years
after accumulating more than B$70 million
in debt, as tourism in Barbados slumped
causing the island's economy to contract.
N&M to get tax waiver on Almond Resorts sale
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