CLICO should compensate Guyana ahead of return – Jagdeo

Following CLICO’s expression of interest in returning to Guyana, the Government is being urged to take a cautious approach with the negotiations in order to ensure the country is compensated for the losses endured when the regional insurance giant collapsed some eight years ago.

Former President Bharrat Jagdeo, who skilfully orchestrated a payout to policyholders without dipping too much into the treasury when CLICO Guyana went bankrupt, is calling on the Government to abandon its “over the counter” approach when engaging with CLICO officials.

“We always welcome investors in this country, but we cannot deal with the CLICO matter anecdotally. It seems as though the Minister is dealing with CLICO anecdotally and wants to score political points,” Jagdeo said when asked by Guyana Times during a news conference on Monday.

The Opposition Leader explained that Government should hold CLICO to its word and ensure the company compensated the nation for the billions in losses it suffered when its operations blew up in 2009.

Lawrence Duprey, Chairman of CL Financial, the parent company of CLICO, recently visited Finance Minister Winston Jordan to discuss the possibility of CLICO’s return to Guyana.

A statement from the Finance Ministry said Duprey also wished to apologise to Guyanese for the consequences they bore as a result of CLICO’s collapse.

According to the Minister, Duprey also said that CL Financial would try to make amends for the approximately US$40 million debt owed mainly to the National Insurance Scheme (NIS).

CLICO failed across the Region, and many policyholders in other Caribbean States were unable to receive their monies at face value.

In Guyana’s case, the Government of the day made a commitment to return every depositor’s monies at face value.

Jagdeo reminded that at the time, when he was President of Guyana, the Government had seized local properties from CLICO in Guyana to help pay policyholders, after it became clear that the regional insurance giant was in dire financial problems and was unable to return monies to all its depositors.

Reports indicate that some 7744 policyholders were paid a total of $4.1 billion.

Jagdeo also reminded that the Guyana Government received a $15 million grant from Trinidad and Tobago to assist with the repayment.

The Opposition Leader said if Duprey wanted to return to Guyana, he must honour his commitments to make amends by compensating the Government and the policyholders.

“The $15 million grant has to be recovered, because that did not come in from CLICO. If you look at loss of income over the years, they can’t only settle the outstanding principal sums but also the lost income that people would have suffered because of the collapse,” he explained.

Jagdeo said if Government took this approach, the People’s Progressive Party/Civic (PPP/C) would support the return of CLICO.

CLICO Guyana had approximately $6.9 billion invested in the regional insurance company when it collapsed in 2009. Among the local investments was $5.2 billion by NIS.

NIS, over the years, has been experiencing a situation where its annual expenses began outstripping its revenue – a state of affairs compounded by the billions it had invested in CLICO for a number of years.

To this end, Government in September last year announced that it would be absorbing the $5.2 billion NIS loss incurred when CLICO Guyana crumbled. The “lifeline” monies are to be paid in tranches over a 20-year period. Minister Jordan had stated at the signing of the agreement to effect this decision that the monies would be returned to Government should the country recover the debt from the company.

In addition, CLICO’s liquidator, Dr Gobind Ganga, at the time, had provided an update on the payments being made to policyholders, noting that while a significant amount has been recovered and paid over, the company still had weighty liabilities to honour – almost $6 billion.