Guyana Govt seeking US$20M to compensate State for CLICO payments

…seek court order to track and claim CLICO assets

True to its commitment, the Government of Guyana has petitioned the High Court to access the US$20 million held in an escrow account to compensate for the billions spent covering CLICO’s liabilities in Guyana following its 2009 collapse.
The Government, with CLICO (South America) named as the second claimant, has taken CLICO Investment Bank Limited (CIB) to the High Court, as the battle for US$20 Million lodged in an escrow account held by the Deeds Registry, continues. According to the Statement of Claim released by the Attorney General Chambers, the government is seeking the release of the funds to its possession.

CLICO was a Trinidadian financial company that had policy holders throughout the region, including Guyana. When CLICO collapsed throughout the region in 2009, many policyholders throughout CARICOM were unable to receive the monies they had invested, at face value.
According to the claim, the defendant and other members of the CLICO group knew they would be unable to compensate policy holders in Guyana. The claim notes that they stood by and watched as the Government of Guyana took on those responsibilities.
The claim states that the Government of Guyana paid as much as $5.6 Billion to the National Insurance Scheme (NIS), which was at risk of collapsing around the same time as CLICO. Moreover, a judgement was already issued against CL Financial Limited, the parent company of the defendant. To date, this judgement has never been enforced.
That judgement, issued in 2019 by Justice Gino Persaud, included special damages of US$34 million. Guyana, represented by Attorney General Anil Nandlall, is therefore seeking the release of the US$20 Million in the escrow account, as partial payment of the total US$34 Million, in addition to an order to levy on any assets owned by CLICO in Guyana.
There is also the matter of fraud, with the Guyana Government in its claim noting that CIB, through its activities, defrauded policy holders. According to the claim, CIB colluded with CL Financial, run by former executive chairman and CLICO director Lawrence Duprey, in these improper transactions.

“CIB knew or ought to have known or was reckless as to its ability to repay debts which were advanced to it and which were essentially policy holders’ monies. CIB caused the loss suffered by policy holders in Guyana which loss had to be assumed by Guyana. CIB borrowed monies from CLI Financial and the group without providing any or adequate security.”
“CIB actively engaged in promoting unsustainable investment products for and on behalf of the group. CIB allowed itself to be directed by CL Financial Limited to make inter-company loans which they knew or ought to have known would not earn a return,” the claim states.
According to the claim, not only did CIB borrow tens of millions of US dollars from CL Financial without providing security and with no intentions of repaying its debts, they also knowingly accepted payments diverted from other members of the CLICO group “to avoid liability and to falsely create an appearance of liquidity and profitability.”

In light of all of this, the government is also seeking an interim order blocking the release of the money in the escrow account to CIB, until their case is determined. An order is also being sought to trace, and make a claim on, CLICO’s assets, with an order directing the defendants to submit the necessary accounts also sought.
The filing of this case comes a month after the High Court barred Clico Investment Bank from accessing the US$20 Million in the escrow account. At the time, Nandlall had announced that the government of Guyana would be going to court to seek the money on behalf of the state.
That judgement was handed down by Justice Navindra Singh, who dismissed CIB’s judicial review against the Registrar of Deeds. CIB, which is registered in Trinidad and Tobago (T&T) had claimed that it was entitled to the US$20 Million, by virtue of an agreement between Bosai Minerals Guyana Services and Bosai Minerals Guyana Group Inc.
However, Attorney General and Minister of Legal Affairs Anil Nandlall, SC., who appeared on behalf of the Registrar of Deeds, argued in his submissions that Section 330 of the Companies Act prevents companies not registered in Guyana, from maintaining legal proceedings locally.
And since this is the fifth time CIB has instituted unsuccessful legal proceedings in Guyana’s courts, Nandlall also made an oral application, which was granted, that CIB be barred from instituting a sixth such proceeding. (G3)