– Finance Minister
…says it paves way for liquidation of company to pay persons owed
MINISTER of Finance Dr. Ashni Singh yesterday publicly welcomed the long-awaited  ruling by the High Court on Clico being insolvent, saying this now paves the way for the Government to “proceed immediately to liquidate the company and start discharging the company’s liabilities”.
Dr. Singh’s declaration, in a statement issued through the Government Information Agency (GINA), came  in the wake of last Friday’s ruling by the Chief Justice (ag.) Mr. Ian Chang that Clico Life and General Insurance (Guyana) Limited, which has been carrying on long-term  and general insurance business in Guyana for a number of years, is ‘Insolvent’ in terms of Section 68 (1) of the Insurance Act of 1998.

The Finance Minister said Government welcomes the ruling by the Chief Justice “that Clico Life and General Insurance (South America) Limited, popularly known as Clico (Guyana), be wound up and that the Bank of Guyana be appointed liquidator for the purpose of executing the order for the company’s winding up.”

Dr. Singh noted that the Court ruling comes after a number of attempts were made to frustrate Government’s application for the company to be wound up.

The Finance Minister described these attempts by persons connected to, or with vested interests in, the company’s affairs as “a deplorable series of frivolous actions in the Court, with no merit, and with no obvious aim or design but to cause delay and to frustrate the public interest in this matter”.

President Bharrat Jagdeo, on several occasions in the past, had cause to criticize the court for its sloth in liquidating the local insurance company.  “I am very, very upset and I hope that people who have money in Clico will join the government in urging the judiciary to move on this matter,” President Jagdeo said during a news conference in March this year. “We have close to $4 billion sitting to give back people their money… at least a large number of people. I don’t want this to become another Globe Trust issue. Where one or two persons, crazy people can stymie so many people in getting their money…”, the Guyanese Head of State had lamented.

Minister Singh yesterday emphasised that Government’s intentions have always been to ensure an orderly resolution of the difficulties encountered by the company and to protect the public interest, and that Friday’s Court ruling paves the way for this to be achieved.

“Now that the approval of the Court has been obtained, Government intends to proceed immediately to liquidate the company and start discharging the company’s liabilities,” the Finance Minister declared.

Chief Justice Chang, in delivering his decision last Friday  in the matter of the Petition by the Commissioner of Insurance, said the Court orders that Clico “be wound up” and that “the Bank of Guyana be appointed liquidator to execute this order for its winding-up”.
Mr. Ashton Chase, S.C., represented the Petitioner, while Mr. Roysdale Forde appeared for the Respondent.
Continuing his judgment, the Chief Justice said, “In other words, the court finds that the total assets of Clico do not exceed its total liabilities by any amount –  let alone by 25% of the net amount of premiums received in respect of long-term insurance business for the proceeding financial year.
“This  court wishes to point out that it does not lie in the mouth of Clico to contend, in these proceedings for winding up, that any part of its business does not qualify  as insurance business within the classes of insurance business specified  in the schedule  to the Insurance  Act 1998.
“It therefore does not lie within the mouth of Clico to claim that any part of its business falls outside of, and is not caught  by section  46  of the Insurance Act, which mandates the establishment and maintenance of a statutory fund  in respect of each class of insurance business comprising of assets which do not fall, in terms of value, below its liabilities in respect of that class of insurance business.
“Simply put, Clico is stopped  in these proceedings for winding up, from claiming that it has been carrying on non-insurance business outside of the limits  of the legal authority conferred on it by the Commissioner of Insurance.
“Thus, it is not open to Clico to contend in these proceedings that it has been acting  illegally, in contravention of the Financial Institutions  Act, in an effort to  reduce the level of liabilities so that such liability would not match,  overtop or surpass the level of assets of the statutory fund relating to long-term insurance business”, the Chief Justice declared.
Concluding his decision, the Chief Justice said: “On a consideration  of the petition as a whole, the available material points unerringly in the direction of insolvency of Clico in circumstances which render it against the interest of policyholders that it be allowed to continue operations not even under judicial management.
“The court therefore orders that Clico Life and General Insurance (South America) Limited be wound up. It is ordered that the Bank of Guyana be appointed Liquidator to execute this order for its winding-up,” the Acting Chief Justice declared.
At this stage, Mr. Roysdale Forde for the Respondent applied for a stay of execution should there be the need to appeal.
But the application was refused.