Clico wind up…
PRESIDENT Bharrat Jagdeo will meet policyholders of the wound up Clico Life and General Insurance (South America) Limited on Thursday to discuss Government’s arrangements for their reimbursement now that the Chief Justice has ruled on the matter.
And he indicated that Government may consider taking possession of some of the buildings that belonged to Clico, including the monolithic structure on Camp Street which since being constructed has not been occupied.
Speaking to reporters at the Office of the President yesterday, President Jagdeo said, “We have over 10,000 policyholders, so we will be meeting with them on Thursday at the Cultural Centre, sometime in the afternoon, and at that time we will discuss how we will move forward. Clearly we have already, based on the decision of the Chief Justice, initiated the process of liquidation of this company.”
According to the President, the liquidator will have to re-advertise a lot of Clico’s assets already put out for sale since no bids came in.
“We are hoping that the bid prices would approximate the book value. We are not sure because that is up to the market to decide, but we are hoping if they approximate to the book value of these assets, then there would be more resources available so that we can see a faster reimbursement of the policyholders,” he said.
Asked whether Government may take possession of the Clico buildings should the sales not come in, the President said that those are decisions that are made after the bids have come in.
“If the bids are too low, then we will have to find alternative arrangements to occupy these buildings and maybe even the State…we do have to build some additional buildings because of the demand for public service. So if we find that the bids are too low, we may very well pay that money in, pay a higher price and acquire these buildings for governmental purposes and therefore there will be more money available to reimburse policyholders,” President Jagdeo said.
On Thursday Chief Justice Ag., Mr. Ian Chang, S.C. ruled that Clico Life and General Insurance ( South America) Limited,(Clico), as an insurance carrying on long-term insurance business and general insurance business, is insolvent in terms of section 68 (1) of the Insurance Act 1998.
He declared, “…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 Court, in its ruling, found that the total assets of Clico do not exceed its total liabilities by any amount – let alone by 25 percent of the net amount of premiums received in respect of long-term insurance business for the proceeding financial year.
Concluding his decision, the Chief Justice said that 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 is allowed to continue operations not even under judicial management.
Minister of Finance Dr. Ashni Singh, in a statement on Saturday, said Government welcomes the High Court’s ruling on Clico and added that 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 Minister further noted: “The Court ruling comes after a number of attempts were made to frustrate Government’s application for the company to be wound up.”
Dr. Singh 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.”