Sunday, April 14, 2024

Mottley: CLICO needed oversight

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THE PROVERBIAL HORSE might have already bolted the CLICO stable, suggests Opposition Barbados Labour Party (BLP) Leader Mia Mottley.
Speaking at the BLP’s St Michael South Central branch on Sunday night at The St Michael School, following the unopposed nomination of David Gill to represent the party in the next general election, Mottley questioned what had been going on at CLICO Holdings Barbados Limited since the demise of the Oversight Committee on June 12, 2010.
She chided the David Thompson administration for allowing the affairs at CLICO to go unsupervised over the past three months within the context of its financial meltdown and its obligations to depositors and investors.
“Since the death of the Oversight Committee no one has been in place to say what has been going on at CLICO . . . no one can say how many cheques have been written; who they went to; what assets stayed in CLICO; what assets transferred out. But yet Government is to execute a bail-out,” she said.
She said Government allowed CLICO to operate over the last three months in circumstances where at least five directors of the CLICO board, including economist Frank Alleyne and Leslie Haynes, QC, had resigned.
“If ever there was a time to extend the life of the Oversight Committee, it was when the directors went along about their business . . . now all of sudden we are being told that Cabinet has approved a plan that includes judicial management,” she said.
Again reiterating her call for a forensic investigation into CLICO’s financial affairs, Mottley explained why she had been adamant that Government should have followed established procedures and exercise judicial management a long time ago.
She said judicial management was important because the manager would ensure CLICO did not sell off its property, since those assets would be needed to pay out what was owed.
She added that the judicial manager would ensure there would be no preferential payments to CLICO staff and family investors before the ordinary citizen.
But Mottley lamented that this might have already happened since former CLICO chairman Leroy Parris had already withdrawn his money.
She charged that over $140 million in deposits had matured, which the company had not paid out to anyone.
She noted that the total amount owed by CLICO under the Executive Flexible Premium Annuities (EFPA) was really $507 million, on top of which CLICO owed $303 million in life insurance pensions. She added that while CLICO had $810 million in debt, its un-audited assets were only $564 million.
Mottley suggested Government’s reported bail-out plan would lead to a situation where people would not even be getting $25 000 in cash, but would be given five-year bonds with interest at two per cent. She added that if people wanted cash, they had to be prepared to sell the bonds at a discounted price.
Mottley said it was sad that most of these investors were not wealthy. She said most of them were over 50 years old and queried what would someone at age 70 do with a five-year bond for $25 000.

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