Opposition Leader Dr Bharrat Jagdeo asserted on Monday that before the Colonial Life Insurance Company (CLICO) is allowed to transact business in Guyana again, they should be required to pay off all outstanding balances and the loss of income that came with the collapse of CLICO years ago.
His comments comes after Lawrence Duprey, the man at the center of CLICO’s collapse in 2008, has now expressed interest in investing in Guyana again, while apologizing for the transgressions made by CLICO the first time around.
Duprey was quoted in sections of the media saying that a resolution could be reached on how Guyana can recoup the more than $5B that his company still owes.
The company that went bankrupt in 2008, wreaked havoc for Guyana and other Caribbean countries. In Guyana’s case the situation was devastating, since under the previous administration, the National Insurance Scheme (NIS) had invested approximately US$40M in CLICO not knowing that the company would go bust.
The People’s Progressive Party/Civic (PPP/C) in Government at that time sold off a number of CLICO buildings in Guyana and used tax dollars to pay off thousands of policy holders.
Duprey who recently meet with Finance Minister Winston Jordan over the same idea of wanting to re-invest was quoted as saying that CLICO’s parent company CL Financial will try to make amends for the approximately US$40M debt owed mainly to the National Insurance Scheme (NIS).
Jagdeo is contending however that “they can’t only settle the outstanding principal sum but also the loss of income that people would have suffered …If all of those things are done properly in a framework, we will support it wholeheartedly.”
A statement form the Ministry of Finance had said that ““Duprey, the majority shareholder of CL Financial also informed Minister Jordan that his company is interested in investing in several areas here, including providing solar energy at competitive prices, affordable housing, clay brick and solar for housing as well as introduce a financial model that will generate savings and alleviate poverty.”
The Opposition Leader posited that while foreign investors are welcomed in the country, the Government of Guyana should not deal with the CLICO matter anecdotally or on the surface, while noting more in-depth analysis from government is needed.
The Former President recalled that back in 2009, under the People’s Progressive Party, CLICO’s parent company “failed across the region with devastating consequences for most countries and a lot of those countries lost money, the people who deposited in their [CLICO’s] local financial institutions.”
However, Jagdeo noted that unlike several countries including Trinidad and Tobago who did not return the depositors’ money at face value, but rather at a discount, Guyana made a commitment to refund every depositor at face value.
“In Guyana’s case we made a commitment that we would return every depositors money at face value. That was the difference between us- so people would not lose their deposits and so what we did, we looked at all the assets in the initial period and we sold off some of the assets and we cleared off most of the deposits, excepting the large ones, easy, we had many small deposits, thousands of them and so we got back their money,” Jagdeo explained.
He further stated that “we then looked at the balance… NIS was huge there but we then looked at our CLICO assets in related companies in Guyana and so a related company had made a loan, I think the loan was about US$13M…We got a court order to escort that money… and the money is still sitting in there, US dollars.”
In addition, Jagdeo stated that Caribbean Resources Limited (CRL) was an affiliated company to CLICO, the financial body in Guyana and “so they owned the land just by McDoom there, we went out to public tender and that was sold for about US$20M…That was a few years back and that money is also available so we have about 30 something million US dollars that’s sitting there which is close to maybe $7B (GYD), sitting there to take care of some of the liabilities.”
Furthermore, Jagdeo accused the Government of creating the impression that the PPP had lost money due mismanagement.
last year, the Government announced a $5.6B long-term financing for NIS to help the entity recover its investments in the now bankrupt CLICO.
“What the Government did, the Government gave this instrument to NIS, so they created the impression that this money, we had lost it totally and they had to come now and give this [financial document] to NIS and this was because of PPP mismanagement, but simultaneously we have sitting in some accounts over US$30M that can be used to offset” Jagdeo declared.