AG says file on CLICO passed on to director of public prosecutions

PORT OF SPAIN, Trinidad (CMC):

Attorney General Anand Ramlogan said Tuesday that Director of Public Prosecutions (DPP) Roger Gaspard has been provided with a file that contains the findings of two investigations into the financially troubled Colonial Life Insurance Company (CLICO).

Ramlogan has also defended the People's Partnership government from criticism that it has flouted the law when it announced new strategies to pay policyholders affected by the CLICO debacle.

The attorney general told reporters that investigations carried out by his ministry and the Central Bank of Trinidad and Tobago into CLICO had been closed, and all evidence were now with the DPP who will now decide on the next step.

"There were many aspects to those investigations ... it was a multifaceted approach to what is recognised to be a multi-dimensional problem. Those investigations have now drawn to a close. Those reports and files have been passed on to the DPP of the country and he will be better positioned to answer any questions with respect to what action would be taken with respect to the investigations," said Ramlogan, who like other senior government ministers have warned that those responsible for the CLICO situation would face the full brunt of the law.

Combined total liabilities

Earlier this month, Finance Minister Winston Dookeran told Parliament that as of June this year, CLICO and British American combined total liabilities were approximately $23.8 billion (US$3.9 billion) with total assets of $16.6 billion (US$2.7 billion).

In addition, Dookeran said that the number of traditional, long- term policyholders affected by the crisis, covering pensions, life and health insurance, is around 225,000 persons and accounts for TT$6 billion (US$1 billion) in liabilities.

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 $75,000 will be paid through a Government IOU, amortised over 20 years at zero interest.

He said the Government 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.

But over the weekend, former attorney general Ramesh Lawrence Maharaj told more than 3,000 CLICO policyholders at a meeting in Chaguanas in central Trinidad that he had written to the central bank challenging the government's new measure to pay depositors.

Maharaj claims that the decision is illegal, contravening the Central Bank Act that was amended earlier this year and which grants the Central Bank sole authority over CLICO.

In his letter, dated September 23, and addressed to Central Bank Governor, Ewart Williams, Maharaj said he had given the bank seven days to respond, adding, "your refusal to respond will be taken to amount to a failure to confirm as requested, and surrender by the Central Bank to the government and/or the minister of finance of its functions and powers under the Act."

But Ramlogan said that the Kamla Persad-Bissessar administration had acted within the law when it announced the new strategies.

"We have been very careful and deliberate in what we have done with respect to the CLICO bailout package. It is well within the law as the minister of finance said, and Mr Maharaj is entitled to as any lawyer would, to seek clients and represent them to the best of his ability.

"But we are very comfortable in what we have done," he added.

But Maharaj told local media that Ramlogan had not responded to the specific point outlined in his letter.

"I invite Mr Ramlogan to respond to give a response to the law which I have quoted. Let him show to the country what section of the law gives the government a control of the policy for the CLICO shareholders.

"Let him show the country whether the Central Bank Act does not give the powers to the Central Bank, and I challenge him that he will not be able to produce any legal authority for that. It is easy for an attorney general to talk about a ridiculous statement, a this or that statement, but an attorney general must respond to the law," he said.