T&T gov't appoints one-man commission of inquiry for CLICO

The Trinidad and Tobago government has named retired British High Court judge, Sir Gavin Lightman, as the only member of a commission of inquiry probing the financial crisis at the Port-of-Spain-based Colonial Life Insurance Company Trinidad Limited (CLICO).

Attorney general Anand Ramlogan said that Sir Garvin, who will also inquire into the problems faced by the Hindu Credit Union (HCU), said the inquiry would be geared towards an analysis of the situation and would also determine whether there are any grounds for civil or criminal liability.

Counsel to the commission is another British QC, Peter Carter, "who has unparalleled experience in financial crime and fraud", Ramlogan said.

"The purpose of this commission is to prevent the recurrence of the financial crisis that has an 'octopus' effect, where tentacles seem to stretch in every nook and cranny of the financial system," he said, adding that he hopes the report would be submitted within six months.

"We consider this to be an urgent and pressing matter," he added.

Let the chips fall

Ramlogan said that he hopes all persons with nothing to hide would cooperate fully "so that we can get to the bottom of this.

"They may be vindicated. They have been calling for an opportunity to vindicate their names and reputation. So this is their chance. Or equally, they may be found culpable and let the chips fall where they must," he said.

The terms of reference of the commission, include examining that "circumstances, factors, causes, and reasons the led up to the January 2009 intervention into CLICO and subsidiaries, the legal and fiscal basis for the 2009 decision.

"How the injection of capital structured, and what policies and procedures were used in distribution, as well as the causes, reasons, and circumstances leading to the deterioration of the companies' financial condition."

The commission will also examine "whether any third party acted in a manner that would have misled any depositors or stakeholders by negligently or fraudulently misrepresenting the true financial status of the companies".

Bailout plan

Earlier this month, Prime Minister Kamla Persad Bissessar announced that the commission would examine the circumstances that led to the financial problems at CLICO while accusing the last government of spending billions of dollars for a minority shareholding in a 'bankrupt' company.

She told legislators that the commission would also inquire into the HCU which has also received a bailout plan by her administration similar to what had been worked out for CLICO.

Under the new bailout plan, government will make an initial partial payment of a maximum of TT$75,000 (US$12,500) to depositors in the short-term investment and mutual funds, and those whose principal balances exceed US$75,000 will be paid through a government IOU amortised over 20 years at zero interest.

Finance Minister Winston Dookeran said the government's IOU would be structured in such a way that it could be traded on the secondary markets, thereby creating a measure of immediate liquidity for the depositors.

-CMC