IT SEEMS TO BE ONE of the defining characteristics of the Freundel Stuart administration that it must do everything it says it will do at the last possible moment, in an incomplete way, and with only a modest serving of information to the public and stakeholders.
And all the while complimenting itself for its hands-on approach to important public business.
And in keeping with this golden rule, the Government was late even for CLICO’s funeral.
After finally coming up with a proposal – back in 2013 – on how it would set up a new company to take over the assets of CLICO International Life Insurance Limited (CIL), a plan which CIL’s judicial manager (JM), Deloitte Consulting Inc., approved, the Government promptly put the whole thing on the back burner, and was silent even when the JM told the court last August that one of the options before it would be “to wind-up the company by way of liquidation”, as Government was not following through on its own plan.
In a Press release dated December 17, the JM said it had filed a new report with the High Court, dated December 12, 2014 recommending that the court now take that option, as no funding had been made available by the Government of Barbados “for the implementation in Barbados of the first phase of a regional restructuring plan for CIL”. 
Suddenly, and not a moment too soon, the Ministry of Finance sprang into action. The day after the JM’s statement had been sent to the media by the JM, the finance ministry said that it had set up a new company to manage the court-approved restructuring plan for CIL and its associated companies.
As a result, said the Ministry of Finance, “any attempts to place CLICO International Life or its associated companies into liquidation will therefore be premature, unwarranted, and unnecessary”.
This announcement was made via the Government Information Service and did not say that the Government had filed anything in court to that effect.
I only mention this because I heard somewhere that the actual set-up date for the new company, now called New Life Insurance Company, or NLICO (rhymes with CLICO – get it?) was given in subsequent court filings by the Government as late January this year, not mid-December last year. As I say, late, late, even to CIL’s funeral.
We are the Government, what are you gonna do about it?
The High Court has now set a date in mid-April to hear submissions from the JM and the Government on the best way forward for CIL. For a government looking for money from here, there and everywhere to pay its creditors, its NLICO plan is more favourable to it as it only requires that bonds – not cold, hard cash – be issued.
Well, except for the $30 million needed, according to the plan, to repay secured creditors, outstanding amounts to policyholders and management fees.
That was two years ago. An affidavit filed by the JM just a few weeks ago suggested that the long delay had eroded CIL’s financial assets (as one would have expected), so I’m thinking maybe a lot more than that will be needed in cash.
But the total value of the bonds which the Government said it would issue was around $380 million, on which interest would have to be paid, maybe forever, as they are needed to fill the hole left by the shortfall of CIL’s assets, and to stand in place of the assets themselves, most of which are in plantations and poor investments.
Bad predicament
So the Government would recover some of its money were buyers for some of these lands to be found. But the maximum achievable was put at $230 million. The other $150 million was to be in bonds without collateral attached.
Leaving it all so late has worsened the already really bad predicament the country found itself in thanks to the downfall of CIL.
In the meantime, we will get another taste of the drama that surrounds all things CIL early next month, when the court resumes on the matter of whether the complete forensic report produced by Deloitte Canada should be unsealed.
Deloitte Canada had released an initial report in December 2011, which traced most of the large transactions undertaken by CLICO Holdings Barbados Ltd. using CIL funds. But additional forensic work was needed to get a fuller picture of where the CIL policyholders’ money went, and this was approved by the court.
The court was told that it was necessary to “complete the investigation of related party transactions identified . . . and to identify any amounts that may be recoverable by the Judicial Manager . . . (and) in light of the findings to date, identify and analyse all fees paid to law firms in the period, confirming the nature and purpose of each payment”.
There would also be a probe into the reasons why some of the transactions were undertaken, and the forensic auditors would “in particular, conduct a focussed review of available email records of CIL and/or CHBL and related companies to secure evidence, if any, relating to the nature or motivation for specific transactions of concern identified from the investigation to date”.
All fees paid to law firms? Searching emails for evidence? As you know, the JM wants the full report released to the general public, while the Financial Services Commission wants it to remain under wraps.
But if all of that was indeed done, I am shocked, shocked that anyone would want
to withhold it.
