FINANCE Minister Dr. Ashni Singh yesterday urged the parliamentary opposition and other stakeholders to allow the judicial process in train on the CLICO (Guyana) crisis to run its course. “Given the nature of the matter before us, it is imperative that all stakeholders allow this judicial process to take its course and to permit the Judicial Manager to discharge her responsibilities under the supervision of the court without the distraction of partisan statements and petty politicking”, he appealed in the National Assembly.
“In short, a strong unified bipartisan approach is required to ensure that this matter is successfully and smoothly resolved”, he said, adding that it was for this reason that the Government of Guyana wholeheartedly supported the motion tabled by Opposition Leader Robert Corbin to suspend the standing orders to facilitate the debate of a substantive motion on CLICO (Guyana).
Referring to legal efforts by CLICO (Guyana) to recover about G$6Bln invested with CLICO (Bahamas), the Finance Minister said CLICO (Bahamas) has been requested to verify the various policies held by CLICO (Guyana).
“The Judicial Manager has been advised that the process of filing claims against CLICO (Bahamas) will require submission through the court of that country, and consideration of this matter is expected to commence next week.”, he said.
Singh said that on the matter of investments in CLICO (Guyana) by the National Insurance Scheme (NIS), these investments peaked in 2004 with investments in excess of $9 billion at the end of that year representing over 40 percent of NIS’s total assets at that time.
“This amount was reduced substantially to $5.6 billion by the end of 2008 and is now estimated at approximately 20 percent of NIS’s assets. These investments were made at rates of return that were higher than those that the NIS was earning elsewhere at the time”, he said.
He reported that the process of determining, quantifying and valuing all of the assets and liabilities of CLICO (Guyana) is still ongoing.
However, it is worthwhile to emphasise the extent and impact of the level of related party balances that are accompanied by guarantees by CLF, the parent of the group, he said.
According to the minister, specifically, in the case of CLICO (Bahamas), that company’s loan to CLICO Enterprises Ltd. is reported to stand at US$73 million at the end of 2008.
“Based on the audited accounts of CLICO (Bahamas) and the annual report by its Chairman for 2007, this loan is guaranteed by CLF as indicated earlier. Similarly, the receivable owed to CLICO (Guyana) by CRL, amounting to $1.9 billion, is also guaranteed by CLF, the parent company. If these guarantees are honoured, the level of impairment of CLICO (Guyana)’s assets should be minimised. The enforcement of these guarantees will be pursued through all available means”, he stressed.
Singh reiterated that the difficulties gripping CLICO (Guyana) are the direct result of the prevailing global financial crisis, and the consequences of this crisis being faced by the CLICO Group throughout the Caribbean.
“This is indicated by the apparent inability by CLICO Enterprises Ltd. to realise immediately the value of its real estate investments in Florida, which in turn has impacted on CLICO (Bahamas)’s ability to recover its receivables from CLICO Enterprises Ltd. and in turn repay sums owed to CLICO (Guyana).
“…given the regional dimension of CLF’s operations and the existence of an extensive set of inter-company loans and guarantees within the Group across several jurisdictions, it is clear that a regional approach to resolving the current situation should be sought. Our Government is firmly committed to this”, he stated.
He also restated that CLICO (Guyana)’s assets amount to less than 3 percent of the assets of Guyana’s financial system.
“Notwithstanding the current situation facing CLICO (Guyana), our financial system remains fundamentally and demonstrably strong and secure”, he said.
