Tuesday, April 23, 2024

Read it and weep, Mr Stuart


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I understand there is some interim report of a forensic nature on CLICO. I repeat I have never seen it. I saw reference to its contents made in a local newspaper. I never trust the contents of that newspaper. – Prime Minister Freundel Stuart speaking last Wednesday during the Estimates Debate in the House of Assembly.
Having thus declared himself uninformed about the state of the forensic investigation into CLICO International Life insurance company (CIL), the Prime Minister went on to plead for somebody to show him the report. As far as he is concerned, the only place anybody is talking about some forensic audit is in a newspaper which he does not trust and presumably does not read.
When I heard Mr Stuart taking this tack on Wednesday afternoon, I nearly drove off the road. Here you have a Prime Minister proclaiming ignorance about possibly the most earth-shattering report prepared by an independent investigator on the most significant financial collapse ever to take place in Barbados, not to mention the rest of the region.
The road that led to the preparation of the Deloitte forensic audit was paved by the administration Mr Stuart himself leads, after two years of vacillation by his predecessor. In March 2010, 14 months after the Trinidad and Tobago government had to go in and rescue CL Financial and ten months after the Barbados Government entered into a similar memorandum of understanding with CLICO Holdings Barbados Ltd (CHBL), then Prime Minister David Thompson issued a warning to policy and annuity holders in the same House of Assembly.
He said that unless a way was found to restructure CIL, which involved its getting a substantial haircut, the whole thing might have to be placed under judicial management. This actually became the recommendation of the Oversight Committee in its memorandum to the Cabinet in mid-2010.
The Democratic Labour Party administration took ten months to emerge from its CLICO-induced stupor to actually act on Mr William Layne’s recommendation that a judicial manager be appointed, doing so in April 2011, six months after the death of Mr Thompson.
So how can a Prime Minister, whose administration had taken the fateful decision to put CIL into the hands of the High Court so that the equivalent of a receiver could be appointed, now be so out of the loop that he himself is not abreast of the latest events? That is, the contents of the forensic report?
Late last month, the judicial manager Deloitte Consulting Inc. said in a Press release that a recommendation which it made was “accepted by the court for the Financial Services Commission (FSC) of Barbados to initiate, with the assistance of the appropriate Government agencies, further investigations into the significant transactions identified in the forensic report and pursue any required criminal and/or civil legal actions”.
According to Deloitte, a main goal of the audit was to investigate the “amounts due from related companies” which totalled Bds$370 million at the date of appointment of the judicial manager. It said: “The forensic team was able to identify substantially all of the intercompany balances during the course of the audit.”
But it noted that “access to documentation, held by related entities which are not subject to judicial management, would be necessary to establish the validity of certain transactions”.
Remember, only CIL was put into judicial management, not its parent company CHBL, for which the audit said it acted as banker. That is presumably why the other Government agencies have been brought into the loop.
Mr Stuart, surely one could reasonably infer from that statement that the FSC would have by now received a copy of the forensic audit, not to mention whichever other Government agencies would have the power to investigate those “significant transactions” in order to “pursue any required criminal and/or civil legal actions”.
How broken is our administrative system that every Government agency connected with crime and punishment in this country now seems to be cooperating in pursuing leads from the forensic audit into whether there might have been any wrongdoing in the disposition of CIL money, which should have been there for its policy and annuity holders, yet the Prime Minister has still not seen a copy of said activity-triggering report?
The forensic report did not appear in the pages of THE NATION from out of the blue, Mr Stuart.
It is a circulating, finger-pointing document that has put your own political administration in a stranglehold. The court has put it in the hands of law and regulatory enforcement and the possible outcomes (at least in one’s imaginings) are frightening.
Yet, by your own admission, you still have not read it. You remain out of the loop.
But it shouldn’t be too hard to get a copy. I humbly suggest you do so, and read it. You may weep.
• Pat Hoyos is a publisher and business writer.

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