straight to the point – from different points of view

We must not allow CLICO to be buried

We must not allow CLICO to be buried

In an October 2014 article I wrote that the unwise means by which this country chose to rescue CLF/CLICO had created a legal Pandora’s Box. As far back as 2010 I had given interviews and written in the same vein. I was concerned that every day that we continued along that path would worsen the legal entanglements.

Here is what I wrote in 2014 – “they are trying desperately to shut that legal Pandora’s box. I cannot imagine that CLICO could be sold to a private entity and still remain under the control of the Central Bank. It would have to be removed from under the umbrella of the notorious Section 44. The moment that happens, every illegal transaction undertaken during the period of control becomes actionable in the courts of Trinidad and Tobago – they will not permit that. Remember that both the PM and the AG assured the nation that the Act would not result in denial of justice. They asserted that rights would be restored once control was relinquished. The consequence of a sale therefore would be that every director acting under the protection of the Act would find themselves drowning in lawsuits against themselves personally. For these and other reasons, CLICO will not be sold.”

That remark was in response to the following announcement by the government of the day “CLICO TO BE SOLD”. I explained the genesis and consequences of that legal witches’ brew that they had created – “Whoa, not so fast folks. If we have learnt anything during this shoddy excuse for a bailout, it is that one should read carefully before jumping to conclusions. Notice the several caveats and sleights of hand in the Minister’s statement. Firstly, in expanding on the matter, the Minister speaks of disposing of the profitable portfolios. In other words, the disposal is of the core business, not the company called CLICO. Let us examine this first issue.”

Two major things of great importance have happened since

Two major things of great importance have happened since. Firstly, they have abandoned the deceit that they are selling CLICO. They are attempting to sell the guts of the business so that they can discard the carcass that carries the greatest legal threat. That is precisely what my columns said would happen since 2014. The second is that the legal entanglements are beginning to unravel. Notice that the Minister’s reply to the shareholders lawsuit now talks vaguely about unspecified claims against the company.

I will not bore you with the details today but the unravelling of the legal entanglements are going to get progressively worse. The threat to the economy comes not from shareholders or policyholders but from legal exposure as a result of their folly. Will they tell us the extent of the claims against us or how much has been paid out thus far and to whom? How much of the ever-escalating cost is accounted for in that way? And yes, I am suggesting the ‘selection’ of claims that have been selected for payment need to be reviewed.

I would not wish to be a person who held authority during this debacle. In my opinion, every one of them will become liable when CLICO control is relinquished and the truth is exposed. If my memory is correct, that is the promise that was made to us by then AG Ramlogan in response to a question from then Opposition Member Colm Imbert.

Don’t fall for the distraction of finger pointing at the shareholders or anyone else. Take a deep breath, gird your loins and prepare to wade into the swamp with your eyes wide open for the real vultures who have infested the bodies of every member of the CLF group and now seek to make as quiet an exit as possible.

The great news is that all the evidence is waiting for us simply to decide to look at it. The bad news is that if the company is closed then it may not be possible to hold any of the miscreants responsible. We simply cannot permit that to happen as the amount that can potentially be recovered runs into billions of dollars Every citizen (bar a few) has an interest in keeping this profitable and tax paying company alive. I’ve said and written it since 2014. We must not allow CLICO to be buried. We must not look the other way while a company of such importance to the economy is destroyed as the latest and most important act of illegality in this costly rescue.

Another important perspective

We should take note of another important perspective on the legal situation. It is that it is multi-dimensioned and will not be easily resolved even with the best of intentions. Virtually every stakeholder I can think of has a valid claim against one of more of the players. Some of the potential claims will impact on others. Every group that pursues a valid claim could find itself trumped of in some way affected by claims from other groups. The best analogy I can offer is untangling a large ball of twine or thread.

There is already a race to the courts by some groups. Quite reasonably, they seek to prioritise their claims. I don’t expect that they are paying any attention to the possible impact of claims from other groups on their efforts. Our leaders have created a uniquely complex knot of interrelated legal issues via the immunity from prosecution afforded by the Central Bank Act, the role of the Regulator as manager of CLICO, and the legendary corruption and incompetence associated with political control of business (think Petrotrin).

Even at this stage there will be winners and losers. Thus far the winners are those who have had the ear of the government and the authorities at large. From here onwards, the winners will be those who understand the strength of their claims and ideally where their claims are positioned in the hierarchy of claims.

The first and most important step in defending the taxpayer is to ensure that CLICO is not sold, but rather, is allowed to continue its profitable existence. That is the best result for the taxpayer in so many ways. I for one, want to be sure that all the illegalities and all the transactions that were executed under cover are exposed and the perpetrators made to pay.

You will be bombarded with distractions by those who wish to sweep billion-dollar illegalities under the carpet. Don’t be fooled. Holding those who pillage the public purse to account is uniquely possible in this case. Few things could have a greater long-term impact on the behaviour of politicians and political appointees. We should not allow this opportunity to pass us by.

* Find the 2014 article on my blog here – http://www.straighttalktt.com/media/?p=425

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