IN an attempt to recoup US$34,069,057, the Attorney General of Guyana and CLICO Life and General Insurance Company (South America) Limited (the claimants), which is presently in liquidation, have launched a lawsuit naming CLICO Investment Bank (CIB) Limited, which is likewise subject to compulsory liquidation, as the defendant.

The financial turbulence that has beset the CLICO Group for years has garnered attention once again as a result of the matter being taken before the High Court in Georgetown.
The lawsuit said that the roots of the legal dispute go back to the financial collapse of the CLICO Group, a complex web of companies that operated throughout the Commonwealth Caribbean, ultimately controlled by CL Financial Limited and its principal, Lawrence Duprey.

It stated that the collapse, which started around 2007, caused large financial losses throughout the Commonwealth Caribbean, especially in Guyana, where CLICO Life and General Insurance Company suffered greatly.  The claimants are asking the court for a number of declarations and orders, including the enforcement of a 2019 decision against CL Financial Limited, that they are now attempting to apply to CIB. They are asking the court to substitute CIB as the defendant in place of CL Financial Limited and to permit the execution of a money judgment against CIB’s assets in Guyana. Among the most significant claims is the allegation that CIB, a subsidiary of CL Financial Ltd., was involved in transferring over US$34 million to CLICO Bahamas Ltd., a sum that was irrecoverable following the collapse of the group.

The claimants argued that this transfer was made with the knowledge that it would cause financial harm to CLICO Life and General Insurance Company and its policyholders in Guyana. The claimants further alleged that CIB and its parent company engaged in a series of fraudulent activities, including insider loan fraud, and participated in a pyramid scheme. They claimed that CIB borrowed extensively from other companies within the group, including CL Financial Limited, with no intention of repaying these debts, and granted loans on favourable terms that contributed to the financial collapse of the entire group.

According to the claimants, the financial crisis within the CLICO Group had far-reaching consequences for Guyana.  For instance, they said the Government of Guyana was compelled to intervene, paying approximately GY$5.6 billion to the National Insurance Scheme (NIS) to prevent its failure due to the losses incurred from the collapse of the CLICO Group.
The government is now seeking to recoup these funds from CIB.

The claimants also accused the CIB of breaching its fiduciary duties, acting dishonestly, and participating in the unlawful and improper transfer of funds. They asserted that CIB, along with its parent company and other subsidiaries, operated as a single, integrated economic unit, disregarding their separate corporate identities to the detriment of creditors and policyholders.

According to the statement of claim, the collapse of the CLICO Group was exacerbated by corporate mismanagement, financial impropriety, and the concealment of the true financial state of the group from regulators and governments. The claimants submitted that the corporate structure was a facade, designed to obscure the group’s financial realities and to evade legal obligations. The Attorney General of Guyana and CLICO Life and General Insurance Company are seeking various remedies, including an order that they are entitled to trace the sum of US$34,069,057 together with interest thereon into the monies being held by the Registrar of Deeds in Guyana and has an equitable title thereto, and that the said sums are being held in trust for them. According to the claimants, CIB was party to certain debentures with two companies incorporated in Guyana, namely, Bosai Mineral Group Guyana Inc. and Bosai Mineral Guyana Services Inc.  They said that monies due to the defendant under the said debentures amount to approximately US$20M and are currently being held by the Registrar of Deeds to the credit of them. According to the lawsuit, the defendant and other members of the CLICO Group are stopped from recovering the sum held by the Registrar of Deeds. The request by CIB to start the process of accessing US$20 million that was placed in escrow was denied by Justice Navindra Singh of the Demerara High Court last month.  In addition, the judge prohibited the company from bringing similar cases in the Guyana High Court without the court’s permission.

The claimants are further seeking several declarations and orders, including for equitable contribution, damages for fraud and conspiracy, restitution, and any further orders the court deems just. They are also requesting that the court declare CIB liable to account for all assets acquired or derived from them and to indemnify them for the losses suffered.