Gov't to bailout CLICO, British American and CIB

[vaio]

:? News on the ground is that they are in some real trouble.............

[TheLight]

And Government will bail them out

[snowbird]

Just for those of us 'not in the loop' (but curious like hell)..... Who, or What is 'CL Financial'?

[vaio]

supposed to be a news conference in a short while

CL Financial = Clico, CIB, Duprey!

[King B]

They have been for quite some time. Losing millions on the methanol plant and One Woodbrook place. The slow economy brought everything to the fore.

[vaio]

http://www.i955fm.com/nowplaying.aspx

coming live

[Beetle]

This is bad news, I heard the rumors this morning, I am not totally surprised.

[sylvestter]

live on the radio now

[shield_2006]

Contagious inter-related transactions-sounds like HCU. There is a plethora of literature on the dangers of this.

[sylvestter]

apparently the government intervention will be with respect to clico, british american, and clico investment bank.

[shield_2006]

I could understand how this unfolded but I do not want to add to the noise in the circumstances. Nevertheless the impact and stress on our economy took a little loner than I expected and I suspect there is more to come. No one is going to escape what was triggered by the IDIOCY in the US.

Before snowbird arrives with the void argument-this crisis was triggered by the IDIOCY in the us WITH THE UNREGULATED BUNDLING OF SPURIOUS PRODUCTS.

[sylvestter]

here's the story in a nutshell from c news, as it is appearing on the ticker at the bottom of tv screens:
http://www.ctntworld.com/LocalArticles.aspx?id=8218


T&T Gov't to bail out CLICO, British American and CLICO Investment Bank
Friday 30th January, 2009

CL Chairman, Lawrence Duprey confirms that government will intervene in CLICO, British American and CLICO Investment Bank.

Mr Duprey says this is just pre-emptive action and he does not believe that it will be a crisis.

Central Bank governor says CLICO manages 38 billion in assets or a quarter of the country's gross domestic product.

The Central Bank will immediately take control of CIB. CIB’s banking license will be revoked after sale of assets.

Central bank governor assures CIB depositors that their funds are safe.

Government to provide funding for CLICO insurance portfolio in return for equity in CLICO.

CLICO to be returned to its core insurance business.

Central Bank governor says this is not the time to take advantage of CLICO’s situation. Not a time for competition.

Minister of finance, Karen Nunez-Tesheira says international firm to be hired to restructure CLICO, CLICO Investment Bank and British American.

First Citizens CEO, Larry Howai says CIB customers should refrain from visiting First Citizens branches.

First Citizens CEO says there are regulatory and legal issues to be worked out before monies can be paid out.

[vaio]

Central Bank is taking control CIB......all liabilities of CIB and CMMB wld be trans to FCB...this is supposed to be offset by the sale of high level assets of CIB....CIB's banking license wld be revoked

[vaio]

First Citizens CEO, Larry Howai says CIB customers should refrain from visiting First Citizens branches

i like that one! :lol: I am sure ppl gonna panic :?

[shield_2006]

First Citizens CEO, Larry Howai says CIB customers should refrain from visiting First Citizens branches

i like that one! :lol: I am sure ppl gonna panic :?

To what end-if u can wait and receive your money in an orderly fashion. I am waiting for Harry and the HCU depositors group to cry discrimination-it is inevitable and expected.

Just for information-the Credit Union movement is under the control of the Cooperative Division of the Ministry of Labour and the credit unions themselves preached that they were capable of regulating themselves and did not want the Central bank involved.

[shield_2006]

Central Bank is taking control CIB......all liabilities of CIB and CMMB wld be trans to FCB...this is supposed to be offset by the sale of high level assets of CIB....CIB's banking license wld be revokedCMMB as well????????


Interesting question :?: :?:

[vaio]

i thought i heard CMMB...cld be wrong though....

employees gonna lose their jobs from CIB for sure!

[shield_2006]

Inevitable job loss-the Company grew over the last five years on the basis of the volume and scope of the inter-related transactions. When selective assets and liabilities are hived off-there will be little left to support their employment.

[vaio]

cmmb too wld be transferred to fcb......interesting days ahead.

[sylvestter]

cmmb too wld be transferred to fcb......interesting days ahead.seriously? i didn't see that. i have to watch the news later.

[slick]

more job losses

[sylvestter]

cmmb too wld be transferred to fcb......interesting days ahead.vaio, i don't think they specifically addressed CMMB

[Randall]

Yep they mentioned ~100 layoffs

[shield_2006]

The thread on Trinidad being recession proof is back 4 sure! :) :)

[Maccogirl]

Talk is 30% of CL staff will be laid off, when no one seems to know

[King B]

This isnt exactly a bailout. Looks more like bankruptcy proceedings.

This isnt HCU by any means but certainly there has been mismanagement on the part of CL Financial in several sectors of their organisation. In the past few years it looked like their mantra was growth at all costs and they got caught in the global economic slow down.

[shield_2006]

This isnt exactly a bailout. Looks more like bankruptcy proceedings.

This isnt HCU by any means but certainly there has been mismanagement on the part of CL Financial in several sectors of their organisation. In the past few years it looked like their mantra was growth at all costs and they got caught in the global economic slow down.

The price of methanol fell from, I believe, $800 to $80-what would anybody have had them do.

This is the price of playing in the big leagues. CitiBank lost how much billion?

[skl]

so what does this mean vis a vis annuities/pensions people hold with CLICO ?

[Slider]

Does this mean that people who were saving for a rainy day with CLICO have lost everything?

[TheLight]

Bailout for CL none for HCU? :humm:

[Slider]

I was thinking the same thing. Now the HCU will counter with an argument like that.

[shield_2006]

First Citizens CEO, Larry Howai says CIB customers should refrain from visiting First Citizens branches

i like that one! :lol: I am sure ppl gonna panic :?

To what end-if u can wait and receive your money in an orderly fashion. I am waiting for Harry and the HCU depositors group to cry discrimination-it is inevitable and expected.

Just for information-the Credit Union movement is under the control of the Cooperative Division of the Ministry of Labour and the credit unions themselves preached that they were capable of regulating themselves and did not want the Central bank involved.

[shield_2006]

I get the impression that FCB will accept viable assets to support the liabilities from CIB to ensure the depositors are covered for their value. AT least that is the impression I get and I hope that is so.

On the matter of the Insurance Company-as long as CLICO maintained conformity with the requirements of the act as far as their statutory deposits are concerned then the recovery should be fairly quick-in that-the value of the assets are not reduced by the difficulties in other parts of the group. In those circumstances life policies, annuities etc will not be affected. That is why as Ewart Williams indicated the need for a proper due diligence.

[vaio]

no one wld have lost anything, since all the assets and liabilities of CIB, CMMB wld be taken over by First Citizens.

and wrt HCU, CL Financial falls under the CBTT, the HCU however does not so there was nothing that the CBTT cld have done or the Min of Finance.

[vaio]

shield_2006 wouldn't this news make ppl panic and wld create a further run on the liquidity of the company. How wld there be recovery then?

[Huma]

Shouldn't this thread refer to a buyout instead of a bailout?

[miktay]

Well yes...rainy days are indeed upon us...

[shield_2006]

shield_2006 wouldn't this news make ppl panic and wld create a further run on the liquidity of the company. How wld there be recovery then?

It should not but this is Trinidad eh?

We have been through this before with WINSURE and another which I can't remember off hand.

I hope Double Trouble doh accuse me of anything for not remembering something.

[King B]

People have already started flooding Republic Bank asking for their money back. I think the HCU debacle is informing their actions. Their money is actually safer than before because has far more financial resources than CL ever did.

Lets see how they handle this one. I guess i wont be touching my Republic shares for quite some time. :(

[King B]

[quote="King B":18w6rgz1]This isnt exactly a bailout. Looks more like bankruptcy proceedings.

This isnt HCU by any means but certainly there has been mismanagement on the part of CL Financial in several sectors of their organisation. In the past few years it looked like their mantra was growth at all costs and they got caught in the global economic slow down.

The price of methanol fell from, I believe, $800 to $80-what would anybody have had them do.

This is the price of playing in the big leagues. CitiBank lost how much billion?[/quote:18w6rgz1]

Not at all; CL has always had a rep for playing fast and loose. I will give them a pass for the Methanol plant, but they also inadvisably built One Woodbrook place when construction costs were extremely high and now cant sell the units at a rate people are willing to pay. That is poor planning. Many companies postponed construction projects in the past few years due to fear of just such an event.

[King B]

Shouldn't this thread refer to a buyout instead of a bailout?

Agreed, our media is just not financially literate enough to understand the difference. I would like to see what Anthony Wilson has to say about this.

[miktay]

Dont want to be a naysayer but this could be very dangerous to our financial system and our economy if it is not handled properly...

[Double Trouble]

The thread on Trinidad being recession proof is back 4 sure! :) :)

shield,

Manning is either a damn fool, a damn liar or most likely both!

[Double Trouble]

Double Post by Double Trouble.

[Double Trouble]

[quote=Huma]Shouldn't this thread refer to a buyout instead of a bailout?

Agreed, our media is just not financially literate enough to understand the difference. I would like to see what Anthony Wilson has to say about this.[/quote:4fyi4x1m]

BOOM,

Sounds like something you will buy at a parlah in front of a village house, in some remote area of Trinidad. I know PappyTricks bought ah whole dozen.

[Double Trouble]

shield_2006 wouldn't this news make ppl panic and wld create a further run on the liquidity of the company. How wld there be recovery then?

It should not but this is Trinidad eh?

We have been through this before with WINSURE and another which I can't remember off hand.

I hope Double Trouble doh accuse me of anything for not remembering something.

shield,

People will panic! This is not only a Trini thing!

[shield_2006]

People have already started flooding Republic Bank asking for their money back. I think the HCU debacle is informing their actions. Their money is actually safer than before because has far more financial resources than CL ever did.

Lets see how they handle this one. I guess i wont be touching my Republic shares for quite some time. :(

If that is so it would be most unfortunate-stupidity knows no bounds-talk about cutting off yuh nose to spite yuh face-WOW.

Put it under the mattress-I suppose and keep it safe while it looses value. TRINIS.

[shield_2006]

U see me-I goin by Jenny's and take a good stiff drink-oui-nah ah goin by the bar down the road-it cheaper. :salut: :salut: :salut:

[King B]

Actually they will probably reinvest in govt institutions like UTC and FCB. Which is backed by the same govt that now backs Republic bank. The irony overwhelms me.

[Slider]

Just got an email from a friend saying that money in Clico (Annuities, Life Insurance) are safe.

However when I am trying to log in to view my account balance https://www.clico.com/ecom/login.jsp I can't get into the system :-(

[greall]

Actually they will probably reinvest in govt institutions like UTC and FCB. Which is backed by the same govt that now backs Republic bank. The irony overwhelms me.

My FCB friends are lookign at my RBL friends and laughing their eyes out... :lol:

Right now,I'm just looking at the information being presented to me and will act accordingly.Having a run on RBL will solve nothing.

Greg

[vaio]

Look out for panic come Monday morning. I think ppl now hearing the news all over!

[shield_2006]

Actually they will probably reinvest in govt institutions like UTC and FCB. Which is backed by the same govt that now backs Republic bank. The irony overwhelms me.

How is the Government backing Republic Bank-I don't get it.

CLICO owns 55% or Republic Bank shares which is a healthy asset and the GOTT is taking those shares against cash through NIB to support CLICO- how u work this out. We have to be careful here with what we say because those who don not know could be easily misled.

What you are suggesting is just wrong wrong wrong.

[shield_2006]

There is an inherent danger in misinformation and lack of financial understanding-No one benefits from financial difficulties caused by irresponsibility or ignorance.

[JPersad]

Any rumours on Unit Trust ?

[shield_2006]

Any rumours on Unit Trust ?

What happen allyuh want to turn an isolated event into a catastrophe? Why?

RUMORS??? You want rumors? Why? R u trying to precipitate something.

RUMORS? Rumors destroy people and can do so for a host of things.

[Slider]

Lets just be level headed and not panic and listen to runours. Lets get the solid facts and analyze it. The government is here to to protect people and wouldn't do anything that's not for the good of the people.

[King B]

What i understand is that govt is taking control of those assets. It is not a bail out where they are giving CL money to get back on their feet through restructuring. The govt is buying them out.

I want to see exactly what assets govt is getting. CL had a large and varied portfolio and I am curious to find out exactly which assets are involved. I feel HCL will be the next chip to fall.

[Scorpio]

steups....

This idiotic PNM government will tell you crime is a worldwide problem, but a worldwide recession is not a problem in Trinidad.

...and people does believe them.

[Scorpio]

This isnt exactly a bailout. Looks more like bankruptcy proceedings.

This isnt HCU by any means but certainly there has been mismanagement on the part of CL Financial in several sectors of their organisation. In the past few years it looked like their mantra was growth at all costs and they got caught in the global economic slow down.


You're right, but I would add that even without the global economic slow down, cl was still headed to financial problems.

[greall]

Hmmm...for GORTT to get into real estate management at this point in time is ill-advised unless they want to divide it for the party hacks as HCL has the largest land bank in the Anglophone Caribbean... :!:

Although I suspect that they may be eyeing the financial services group.

Greg

[sylvestter]

The government is here to to protect people and wouldn't do anything that's not for the good of the people.the trinidad government??? uh ok... if you say so.

kbb - i fail to see how the government is 'backing' RBL...

[mammadon]

:? News on the ground is that they are in some real trouble.............

OK. tell me something nah.

don't financial bailouts reward bad corporate behaviour?

Shouldn't Clico have done better research and anticipate a demand for dey product? :roll:

The doubles man on the street corner eh gonna sell if he thinks no one eh buy he food.

[mammadon]

Lets just be level headed and not panic and listen to runours. Lets get the solid facts and analyze it. The government is here to to protect people and wouldn't do anything that's not for the good of the people.

eh? :?

Didn't Tesheira say a few months back that the recession wouldn't affect trinidad? :lol:

Whoever is her and Manning's economic adviser probably bought their degrees and not read for them, by the sounds of it lol. Either that, or Tesheira and Manning actively choose not to listen to them.

[greall]

The government is here to to protect people and wouldn't do anything that's not for the good of the people.the trinidad government??? uh ok... if you say so.

kbb - i fail to see how the government is 'backing' RBL...

If CLICO owns 55% of RBL and GORTT is engaging on a CL Financial buyout then following the logic,GORTT has a say in CLICO's operations through this buyout which will include the CLICO board members on RBL's board.

Greg

[miktay]

The swift demise of CLICO is suspect and worrysome...if their balance sheet went to hell this quickly...in Rumsfeld terminology...there are unknown unknows...and this is the worry: GOTT may be writing checks that we the tax payers may be unable to fund....

And further the hon Ms. Texiera and Mr. Williams lack credibility. The fact that theyre bringing in "foreign" consultants does not alleviate the concern either...European and American "experts" coudnt save their own economies...how are they going to help us Trinis?

IMHO The one ray of optimismn is Mr. Howai & Ms Christopher of FCB who are well versed in reviving troubled financial companies. No doubt they will be spending many a late night pouring over CLICO balance sheets.

My other hope is that Mr. Duprey steered clear of issuing those dreaded three letter derivate instruments such as CDS and CDOs which have become synonymous with the global financial collapse...

If this is the case...though...crappo smoke we pipe...

[bceo]

Come Monday morning and onwards with situation this recession and bailout...We are going to see one chain reaction by this bail out, whether its with the banks or other insurance companies or both and make this entire situation even worse is if the gov't/central bank has to step in again to bail out other company's (44D of the Central Back Act)....oh, the employment rate etc. All lot of people in Trinidad and Tobago are too laid back when it comes to the recession globally and i hope they open eyes now and realise the "egg" has cracks in it. Looking at the current situation worldwide and the current IMF report and economics now are saying its going to be much worse that.....honestly, only "uninformed" people if will be more affected if they really and honestly listen to the government and other people like Gregory Aboud. If you watched the interview panel and when he was talking about the finance of the economy etc, if you honestly looked at his face you would have noticed the crap he is talking and even he himself knows its only cover talk. Looked at Mexico last year December they had the same talk like the trini gov't oh, everything is ok and now they are in recession and after all the big talk from the finance minister, the budget had to be cut. Again, look at Dubai now, it was said, they would not be affected and now, they are. This is and will affect everyone from the bottom (even worse) and top when shares are worth almost nothing. The world is a circle people secured by a chain...."weak links what"

The gov't is trying there best not to panic people but they will have no choice if they continue taking this approach. And the average person/s will suffer major.

But wait....Its PNM, UNC-A & COP...Are they gonna play the blame game and not inform there respective supports thus the people of Trinidad and Tobago.

Finally, its a sad day for Mr. Lawrence Duprey because, he build the company "Clico" to where it is today but look, a bail-out for his company (25% of TNT GDP)=less stress for him...he rich!

[Maccogirl]

Duprey is saying he wants to concentrate on his liquor business? If that is so why the frigg the PNM has to bail his arse out, then he said yesterday that CL Financial will buy back from the Government one of the group’s major assets, Pt Lisas-based Methanol Holdings Ltd, after agreeing to hand over ownership of the company to the Government under the terms of a memorandum of understanding (MOU) for a costly bailout of the CL Financial Group. :roll:

So exactly what is going on here with this man, he throw the entire country into turmoil now he want this and want that, all of a sudden the banking part of his business get too difficult to handle so he tossing it on the PNM, Manning better take a long hard look at what Duprey trying I feel he looking to cut his loses and let the govtt have the headaches with all this :roll:

[Huma]

The doubles man on the street corner eh gonna sell if he thinks no one eh buy he food.

Yeah, but if the doubles man on the street buss, it means is he to ketch and we to walk another block by the next doubles man.

If entities like CL buss, is their employees and managers to ketch, true, but where can customers walk to get their money?

[Huma]

Shouldn't this thread refer to a buyout instead of a bailout?

Agreed, our media is just not financially literate enough to understand the difference. I would like to see what Anthony Wilson has to say about this.

From the look of Guardian's front page, plenty.

In fact, only the Newsday went sensational.

[King B]

The Newsday is a tabloid. I dont even read it anymore.

When I say RBL is now backed by the govt I mean that GOTT is ensuring that all deposits are safe. You probably have the same low risk of losing your money in RBL that you would have if you had money in UTC or FCB because they are also guaranteed by the same govt.

[crorepati]

Speculation and rumor will continue because Williams and Duprey refuse to give vital info.Williams refused to divulge even a ballpark figure for the extent of the bailout --this is taxpayers money he dealing with!As for Duprey there should be full disclosure of all his questionable investment decisions including the jamaican rum company -Lascelles and fort lauderdale real estate---criminal prosecution of chairmen and board members have not been unheard of in these situations(Worldcom ,enron, Madoff)

[shield_2006]

:? News on the ground is that they are in some real trouble.............

OK. tell me something nah.

don't financial bailouts reward bad corporate behaviour?

Shouldn't Clico have done better research and anticipate a demand for dey product? :roll:

The doubles man on the street corner eh gonna sell if he thinks no one eh buy he food.

You sir, clearly, have never made a business investment IN YOU LIFE. What is worse is the notion that you can compare business at this level to selling doubles- I do not want to be uncomplimentary-but- why don't you just be quiet? Or go sell doubles.

[shield_2006]

The Newsday is a tabloid. I dont even read it anymore.

When I say RBL is now backed by the govt I mean that GOTT is ensuring that all deposits are safe. You probably have the same low risk of losing your money in RBL that you would have if you had money in UTC or FCB because they are also guaranteed by the same govt.

NO NO NO NO. You still do not get it. The only guarantee to any deposit is the Deposit insurance that is up to $75,000. The fact is that RBL is a well run,well capitalised well managed financial organisation. The shares have ntohing to do with anynbody deposit as you associate.

But there is another element to this-the notion that the GOTT or anybody or somebody is responsible for ensuring that you are shielded form the vagaries of an investment. Ask the investors on Wall STreet why the governemnt of the US did not come in and shore up share prices. That is your risk.

UTC and FCB are not guaranteed by anybody except DIC.

Like I said there is an apparent lack of understanding about how the financial system works- and it is confirmed by the ready willingness for the entire issue to descend into a Manning and whoever else bashing.

I learnt a long time ago that is better to stay quiet and let people wonder if you know than to open your mouth and convince everybody that you do not.

[King B]

I dont think that is true Sheild. if that is the case then why sell govt controlling interest? Also UTC and FCB are guaranteed by GOTT up to a certain level. FCB will only go out of business if GOTT becomes insolvent which is a highly unlikely prospect. Duprey is not selling the rum division or any of the foreign investments and hopes to repurchase the Methanol plant at some point. That clearly means he intends to retain his most profitable assets to continue some kind of positive cash flow.

All I am saying is that people will lose their deposits, up to a point, if RBL becomes insolvent but that is a far less likely prospect if the bank is owned by GOTT instead of by CL Financial. Much easier for GOTT to make a cash injection than CL because CL has been cash strapped for some time. Duprey said in today's Express that the move was prompted by a potential run on CL which I think was sparked by institutional investors starting to pull out their investments. A friend at UTC said to me that they have been receiving unusually high deposits and institutional investments in the past few weeks and they attribute that to people transferring money out of CL.

[greall]

I still maintain that people should look at the information before they make a decision.

Howai and Christopher have their work cut out for them and there's no mistake about that.Christopher's a workaholic so that's nothing for her.

My concern now is GORTT rationalizing their financial and/or semi-financial operations like where I work.Do I have to answer the phone differently in a few months?

Greg

[mammadon]

:? News on the ground is that they are in some real trouble.............

OK. tell me something nah.

don't financial bailouts reward bad corporate behaviour?

Shouldn't Clico have done better research and anticipate a demand for dey product? :roll:

The doubles man on the street corner eh gonna sell if he thinks no one eh buy he food.

You sir, clearly, have never made a business investment IN YOU LIFE. What is worse is the notion that you can compare business at this level to selling doubles- I do not want to be uncomplimentary-but- why don't you just be quiet? Or go sell doubles.

lol...

shield nah man, it's the same basic principle. In our economy, it's all based on supply and demand, no?

The whole notion of investment is to reap a return from it in the future. Think of any business activity in Trinidad and you'd see it catering for consumer demand. From Bhagwansingh's, to RBTT, to market traders, and even the doubles men, it's all because people are willing and able to buy dey tings. Even the drug men do it for profit, since they know some are willing and able to buy drugs.

I don't want to be uncomplimentary, but go to wilkipedia or something and read up the market economy article. or go sell doubles yourself. :P

[skl]

I dont think that is true Sheild. if that is the case then why sell govt controlling interest? .

isnt it a swap ? CLICO gets cash and in return Govt get the shares of the most solvent of CL's companies ?

[greall]

I dont think that is true Sheild. if that is the case then why sell govt controlling interest? .

isnt it a swap ? CLICO gets cash and in return Govt get the shares of the most solvent of CL's companies ?

Exactly.

Greg

[slayerdave]

CL financial [CIB] crashes whilst an inquiry is being conducted into one of the most corrupt cash cow ever, UDECOTT! What all you think? Theirs more in the mortar than the pistle.

[slayerdave]

[quote="King B":2cveqcem]This isnt exactly a bailout. Looks more like bankruptcy proceedings.

This isnt HCU by any means but certainly there has been mismanagement on the part of CL Financial in several sectors of their organisation. In the past few years it looked like their mantra was growth at all costs and they got caught in the global economic slow down.

The price of methanol fell from, I believe, $800 to $80-what would anybody have had them do.

This is the price of playing in the big leagues. CitiBank lost how much billion?[/quote:2cveqcem]

Methanol prices now stands at USD 233, yes it did fell from USD 884 at its peak.

[Beetle]

wow this thread get over 900 views in one day :shock:

....anyway I read somewhere that clico was not meetings its reserve requirements for years now, I can't find the article, but I am wondering why the government didn'e take action on this.

[greall]

The government normally lets the market resolve itself freely before enforcing regulations as they did in the States.

Greg

[shield_2006]

wow this thread get over 900 views in one day :shock:

....anyway I read somewhere that clico was not meetings its reserve requirements for years now, I can't find the article, but I am wondering why the government didn'e take action on this.

Let me give you a lil insight- The reserve as you refer-which is in fact the "statutory deposit"-is by sitpulation of the Insurance Act 1966 comprised of "approved Investments" and there has been a long debate-going back some years- if equities can be considered an approved investment in keeping with the requirements of the ACT. This is the debate that you refer to that has been going on for sometime.

The argument has been that because equities are producing dividends and capital growth they constitute significantly attractive paper to be included. Where the problem arose was when that equity was from an investment made by the Insurance Company in a business which they initiated-say-like Methanol shares or even Republic Bank shares. The Supervisor of Insurance had always argued that equities are too volatile for such a consideration.

I moved away from the sector sometime ago so I can not say how it was resolved. But clearly in hindsight the Supervisor may well have been right.

What was interesting was the indication that CLICO would return to its moorings-this is a significant statement-CLICO is a sound and strong insurance operation on its own but served as a cash cow for the expansion of the group and-AS AN ASIDE- I feel that the entrepreneurship demonstrated by Lawrence Duprey should be applauded/ there are so many here who talk the talk but do not walk the walk and the dividends accrued to CLICO policyholders in the good times were significant and in addition I also feel that were it not for the global meltdown they would have gone from strength to strength. I had business dealings with Lawrence and while I did not always agree with him-I had to admire his acumen and what he was able to accomplish from this small base here in T&T.

I really hope that the whole organisation can be saved.

[jacques]

Isn't anyone wondering what "related party transactions" are about?

[Hance]

I believe that the individuals at the highest level must be held accountable for bad management. If this was a typical receivership situation the bank will normally go after the personal assets of their debtor if the liquidation of the fixed and other assets cannot cover the secured liabilities ( loans from the bank).

I find it unfair that the small business man who have taken a loan from the bank and is adversely affected by the global slowdown have no access to a "bailout" or "buyout" and is subject to literally losing the shirt of his back when the bank forclose or put his business into receivership . Yet these conglomerates , with millionaires and billionaires have such apparent easy access to funding and are able to make deals to "buy back " their assets in the future.

Make no mistake, in the wake of this recession there will be a cleansing of those companies who have not prepared for the hard times ahead....most businesses will be affected especially those that provide luxury goods and services, starting with the auto industry. The banks have already adopted a no tolerance approach to businesses who have defaulted on loan repayments.

[shield_2006]

Isn't anyone wondering what "related party transactions" are about?

There is an oblique reference to this in my post-but-if you look at the accounts of any conglomerate they have a category called inter company sales-and -while in this case the transactions are different it would give you an idea.

It is not some skulduggery.

[Beetle]

Isn't anyone wondering what "related party transactions" are about?

There is an oblique reference to this in my post-but-if you look at the accounts of any conglomerate they have a category called inter company sales-and -while in this case the transactions are different it would give you an idea.

It is not some skulduggery.

But in the evaluating the strength of an insurance company's balance sheet, shouldn't related party assets be excluded ? For instance, amounts due from subsidiaries (Methanol company, for instance).

The life insurance business is a long term business, and someone has to be making sure that insurance companies maintain a level of solvency recommended by independant actuaries.

[shield_2006]

Isn't anyone wondering what "related party transactions" are about?

There is an oblique reference to this in my post-but-if you look at the accounts of any conglomerate they have a category called inter company sales-and -while in this case the transactions are different it would give you an idea.

It is not some skulduggery.

But in the evaluating the strength of an insurance company's balance sheet, shouldn't related party assets be excluded ? For instance, amounts due from subsidiaries (Methanol company, for instance).

The life insurance business is a long term business, and someone has to be making sure that insurance companies maintain a level of solvency recommended by independant actuaries.

I agree with you but I was trying to explain the "related company transactions".

[JPersad]

Any rumours on Unit Trust ?

What happen allyuh want to turn an isolated event into a catastrophe? Why?

RUMORS??? You want rumors? Why? R u trying to precipitate something.

RUMORS? Rumors destroy people and can do so for a host of things.
The Unit Trust concerns me a whole lot .
You seem to have some serious issues though .In the meantime though , I suggest you CALM DOWN.Go by Jenny's have a couple of drinks .Put it on my tab, if you so wish .

[King B]

I dont think that is true Sheild. if that is the case then why sell govt controlling interest? .

isnt it a swap ? CLICO gets cash and in return Govt get the shares of the most solvent of CL's companies ?

Exactly.

Greg

After seeing more details that seems to be exactly what it is.

What's amazing is that it seems Duprey walks away with nothing. Govt will get Clico and all the other assets that are at issue. CL Financial had to be in a really bad way for them to agree to that.

[Slider]

Lets just be level headed and not panic and listen to runours. Lets get the solid facts and analyze it. The government is here to to protect people and wouldn't do anything that's not for the good of the people.

eh? :?

Didn't Tesheira say a few months back that the recession wouldn't affect trinidad? :lol:

Whoever is her and Manning's economic adviser probably bought their degrees and not read for them, by the sounds of it lol. Either that, or Tesheira and Manning actively choose not to listen to them.

Well the key words in the newspaper reports are "Good Governance" ... what allyuh sulky faces have to say now? You all have to be thankful for the PNM!!!

[mammadon]

IMO, good governance remains to be seen.

[miktay]

It appears that Mr. Duprey is going to concentrate his efforts on Angostura...which by all accounts suffers fm the same excess of ambition...which led to the ruination of CLICO...

But it is worth noting that in his bid to create a global brand, he would need to spend untold marketing and promotion $ to compete with the the giants Diageo (Johnnie Walker, Guinness, Smirnoff) and Seagrams (Chivas).

This seems incredulous.

[shield_2006]

Any rumours on Unit Trust ?

What happen allyuh want to turn an isolated event into a catastrophe? Why?

RUMORS??? You want rumors? Why? R u trying to precipitate something.

RUMORS? Rumors destroy people and can do so for a host of things.
The Unit Trust concerns me a whole lot .
You seem to have some serious issues though .In the meantime though , I suggest you CALM DOWN.Go by Jenny's have a couple of drinks .Put it on my tab, if you so wish .

Yeah Boss-I have serious issues-I have issues with people who-for whatever reason feel committed to spread negativity and destruction for narrow ends.

I try-within my limitatrions-to bring as much fact to the great desire to spread innuendo, mauvais langeue and uninformed opinion for which so many have a penchant.

I have a vested interest in Trinidad and Tobago-I live here-and will do all in my power-limited as it is-to ensure that thoise with so little to loose do not contribute to its destruction-as I said-for narrow ends.

I had beers on the corner-STAG

[mammadon]

I guess alcohol can be seen as a recession-proof industry, of a sorts. Since trinis like we rum, Duprey obviously knows there is a demand for this, so plenty money for him still, eh?

[shield_2006]

I guess alcohol can be seen as a recession-proof industry, of a sorts. Since trinis like we rum, Duprey obviously knows there is a demand for this, so plenty money for him still, eh?

Nice try-Fail

[Harry Williamn]

One wonders where in the hell these idiots come from...then one knows that they come from a place

called "Hell!"

[greall]

It appears that Mr. Duprey is going to concentrate his efforts on Angostura...which by all accounts suffers fm the same excess of ambition...which led to the ruination of CLICO...

But it is worth noting that in his bid to create a global brand, he would need to spend untold marketing and promotion $ to compete with the the giants Diageo (Johnnie Walker, Guinness, Smirnoff) and Seagrams (Chivas).

This seems incredulous.

Point noted but I'd think that he should focus his brands on niche markets.Hisis a little upstart compnay from the Caribbean competig with the really big boys who buy out each other when they feel like it.

The business plan/model really needed to be looked at...
Greg

[Redman]

The Govt is taking control of CIB,CMMB CLICO etc in order to make up the shortfall in the STATUTORY FUND that would then in turn back DEPOSITORS and ANNUITANTS and Policy Holders as per the Insurance Act.

The Depositors would be mostly EFPA ANNUITANTS.

So the bail out isnt of Duprey per se but of the people that hold these products.

Everybody should also know that ALL the banks (except RBL) hold these EFPAs and insurance contracts as collateral for loans etc so understand that bailout is benefiting them as well.

I think the Govt Central Bank and the rest of the players are doing a good job here- Keep in mind that nobody has lost any money (as of now) and I would suggest that the Group under normal circumstances would be spinning off HUGE cash flow- much more profitable for Duprey to Keep this thing afloat if possible so he will be hurting BIG TIME

I lost money in a investment because the fund manager had cash at a firm that went belly up because of a third party failure. CONTAGION is fast moving and overnite. Everything was good the week before.

I also dont think that they would be involved in the CDO etal market- their cost of funds would be higher than the return of most of those instruments.


My concern is that people start pulling money out of the system and converting and wiring out to other jurisdictions.
I would also be concerned if CL had any unsecured debt of significant size down here.

Later

[greall]

The Govt is taking control of CIB,CMMB CLICO etc in order to make up the shortfall in the STATUTORY FUND that would then in turn back DEPOSITORS and ANNUITANTS and Policy Holders as per the Insurance Act.

The Depositors would be mostly EFPA ANNUITANTS.

So the bail out isnt of Duprey per se but of the people that hold these products.

Everybody should also know that ALL the banks (except RBL) hold these EFPAs and insurance contracts as collateral for loans etc so understand that bailout is benefiting them as well.

I think the Govt Central Bank and the rest of the players are doing a good job here- Keep in mind that nobody has lost any money (as of now) and I would suggest that the Group under normal circumstances would be spinning off HUGE cash flow- much more profitable for Duprey to Keep this thing afloat if possible so he will be hurting BIG TIME

I lost money in a investment because the fund manager had cash at a firm that went belly up because of a third party failure. CONTAGION is fast moving and overnite. Everything was good the week before.

I also dont think that they would be involved in the CDO etal market- their cost of funds would be higher than the return of most of those instruments.


My concern is that people start pulling money out of the system and converting and wiring out to other jurisdictions.
I would also be concerned if CL had any unsecured debt of significant size down here.

Later

This is my main concern as is the concern with many of my friends and as my boss said this morning:"Trinis heard the first sentence and ran to POS with it."
I admit that I am concerned as some of my parents' retirement investments and some of my family's funds are in the hands of CIBTT and CLICO (at my urging) but the cursing stopped on Friday night when we were assured by people in the know that we shouldn't be worried.
I'm just letting all of this play out and am in constant contact with those in the know.

Greg

[citizen]

I am joining this thread a bit late in the game. However, this bailout was in fact a guarantee by the Central Bank negotiated a long time ago. I know this because of the following.

Over the past few years, I had been approached at various times by agents of CIB to invest with them. It turns out that they had their covert spies at many banks and CIB was privy to the deposits held at these various banks by investors, large and small.

In order to attract investment, CIB was willing to offer greater returns, much higher (at least 4%) than the going rates. When I asked whether the principal was guaranteed, I was sent a letter which was official or at least it appeared to be, stating that the Central Bank indeed guaranteed the principal. I never put any of my investments with CIB because of their underhanded techniques. However, I am confident that Duprey knew exactly what he was doing a long time ago. This was not a bailout, but rather a cleverly arranged guarantee which was put in place quite some time ago, to cover CIB in case of a collapse (for any reason).

I still don't understand why the Government signed such an agreement - the other arms of CLICO have assets to more than compensate the losses incurred by CIB.

Does anyone else have a copy of that letter? I think it was addressed to a high ranking official (not Duprey) who parted company with CLICO quite some time ago, and it came from the Central Bank possibly signed by one of the head honchos.

[miktay]

This is my main concern as is the concern with many of my friends and as my boss said this morning:"Trinis heard the first sentence and ran to POS with it."
I admit that I am concerned as some of my parents' retirement investments and some of my family's funds are in the hands of CIBTT and CLICO (at my urging) but the cursing stopped on Friday night when we were assured by people in the know that we shouldn't be worried.
I'm just letting all of this play out and am in constant contact with those in the know.

Many friends of mine have also been reassured by "them who should know". Its unclear as to whether this is just party-line-ole-talk-to-reassure-the-public or a real commitment fm the govt.

But the fact that the hon Ms. Tesheria apparently "got hers" before the official annoucement exacerbates the issue.

In any case were seeing a general erosion of confidence in local financial institutions which is worrysome.

[greall]

The bank run's started at certain RBL branches...

What pray tell are you going to do with the manager's cheque that they give you when withdraw all of your funds?Encash it?Deposit it in another account at another bank?

Are you aware that the other bank or UTC may take those funds and invest it somewhere else?Or that excessive amounts of money in the national monetary system is just as bad as too little bit?

Fear's a hell of a thing...

Greg

[vaio]

wda! i've had at least 3 calls from ppl this morning asking me if they shld withdraw their money from RBL...apparently quite a few ppl are closing their accounts at RBL :|

[greall]

People are in a panic...

Greg

[sylvestter]

wwrd: 'what will rowley do?'

[vaio]

well rowley is not in support of the bill...and according to reports, a lot of ministers/gov't withdrew their moneys from cib, clico in the last few weeks...and now that news reaching the public, ppl have reason to panic!

[snowbird]

Before snowbird arrives with the void argument-this crisis was triggered by the IDIOCY in the us WITH THE UNREGULATED BUNDLING OF SPURIOUS PRODUCTS.


Hey, just noticed your comment 'Mr. Man' :D ...... just for the record, no argument from me on your premise.

I agree that we have gone through a period where all those with access to funds (governments and business people)..... anybody's funds, played 'fass and loose' with them..... now we are paying the price for this 'unregulated capitalism'. Greed got the better of all of us, and none of us stopped to think...."where or what is this value really based on"; we all played a giant game of 'monopoly', and as in that game, some will get the 'go to jail card', but not as many as should, for encouraging some of the weaker less informed ones to join them in the game.

Oh by the way, big story in Canada today.... two CEO's of Canadian Banks returned their 'bonus' cheques (one was eight million the other was four). Big F****** Deal.
....... how the hell does that help the rest of us who invested in their banks and lost a bundle. That is supposed to make us say?......"ah, they so good, they really earn the other millions they got to keep over and above those bonuses"? stuuuuups. I say...."fire all ah dem arse".

[Angie]

wwrd: 'what will rowley do?'


http://www.trinidadexpress.com/index.pl ... =161433730 (http://www.trinidadexpress.com/index.pl/article_news?id=161433730)

Calder Hart and the UDeCOTT Commission of Enquiry returned to haunt the Government yesterday, effectively blocking its efforts to deal with the Clico bailout in the House of Representatives.

The spectre of Hart, who is chairman of NIB, which is due hold the shares of Republic Bank under the agreement, proved to be too much for Diego Martin West MP, Dr Keith Rowley, and members of the Opposition to accept.

Pointing out that Hart was the same man who said he did not take instructions from Ministers of Government, Rowley said he could not support the bill which would put assets worth billions in the hands of Hart.

As Rowley threw down the gauntlet, the Government was deprived of the constitutional majority needed to pass the two bills-Central Bank Amendment Bill and the Insurance Amendment bill -and to facilitate the Clico rescue plan. With the bills heading for certain defeat, a worried Government decided to adjourn the Parliament to avoid putting the matter to a vote. (See Pages 4 & 5).

Rowley signalled that he is expecting the Minister of Finance, in her windup, to satisfy his fears about Hart being given additional responsibilities over public funds as a consequence of the bailout plan.

But Rowley's contribution was merely the culmination of the severe beating which Government took from the moment the sitting began. The pressure had started with Opposition revelations that Finance Minister Karen Nunez-Tesheira and members of her family had withdrawn their money from CIB in January.

Siparia MP Kamla Persad-Bissessar, quoting from the Prevention of Corruption Act, said the Opposition had information that Nunez-Tesheira and the Central Bank Governor Ewart Williams withdrew their money from Clico prior to last Friday, after getting prior knowledge and information.

"Instead of wasting taxpayers' money to send Bob Lindquist to Cleaver Heights, send him to investigate which ministers withdrew money ... after an official from Clico went to the Central Bank early in January," she said.

"You cannot pontificate to the public about integrity when you use insider knowledge to withdraw your money," Persad-Bissessar roared.

Persad-Bissessar twice sat down to give Nunez-Tesheira an opportunity to respond. Nunez-Tesheira rose to say that she did not use any "privileged information" to her advantage and that she would respond in her windup.

Persad-Bissessar said the sequence of events was that State-owned NGC made a run on CIB of US$250 million from October last year to January.

"And today, when we hear the Prime Minister, we understand why. He has never forgiven CLICO and its chairman from being friends of the Prime Minister of the UNC," she said.

Persad-Bissessar said the level of corruption taking place under PNM with Calder Hart and UDeCOTT was making Ish Galbaransingh and Steve Ferguson look like "little boys".

"If NIB is going to be involved in this, Calder Hart must go, he cannot be left there," she thundered.

Later, Rowley stipulated that Hart must not be put in charge of Republic Bank and he called for a repudiation of the UDeCOTT statement that state enterprises were not accountable to ministers. He also suggested that since NIB was not a wholly government enterprise, that Government establish a holding company to vest the shares of Clico, so that the money, dividends and earnings would go directly to the Government via this holding company.

Speaker after speaker raised the issue of Hart's continued chairmanships, citing the disclosures made in the Commission of Enquiry as the basis of their position. Noting that Government would have the power to appoint directors to all the Clico companies it now held, Panday asked: "What kind of directors? Calder Hart and (Andre) Monteil? These are the same people who appointed Calder Hart to UDeCOTT, coming to tell me I must trust them to appoint directors to RBL and CIB... If you are serious about appointing fit and proper persons, you will fire the board of UDeCOTT."

Panday described the bailout as a "hostile takeover", which included control of the media.

The Government last night adjourned before the committee stage and final vote in order to give itself, the Opposition and Rowley the time to arrive at a middle ground. The bills are crucial not just to Clico, but to the health and well being of the economy of Trinidad and Tobago.

According to political observers, this administration is for the first time in a real bind.

Normally, it is in the Senate that Government has to take a conciliatory approach to special majority legislation. But Rowley, who was fired as a Cabinet minister over the issue of Cabinet oversight of UDeCOTT, now holds the trump card

[shield_2006]

I suppose-these are the dangers of living in a small country-any issue deteriorates into personalities-who do what to who-and-who do what when-and-what was done by who?

In addition-the complete lack of financial sophistication of such a large group of -people is a recipe for disaster as appears to be unfolding. It really is so sad.

This business of taking money out of Republic Bank is such amazing stupidity-as I said-put it in your mattress and watch it losse value-or stay home all day to guard it.

Trinidadians need to grow up real fast in so many ways. If you take money out of RBL and put it in Scotia-for example-and RBL is short of its reserve requirement-guess where they borrowing it from? YES-YOU-YOURS-THE SAME MONEY!!!!!!!

[miktay]

Rumours of a bank run are very very bad...

At the very least Ms. Tesheria and Mr. Williams need to resign...sooner rather than later...

Otherwise the public's fear will feed on itself and lead to further mistrust and panic...and not even the reassurances fm FCB will allay this conflagration of fear & uncertaincy...

[Redman]

Im advising people to pull their money from CLICO AND to move it out of the system.

Whether we like it or not there is an extremely high level of systemic risk.
I will take my 3% from BONY and see how this plays out.

Later

[shield_2006]

Rumours of a bank run are very very bad...

At the very least Ms. Tesheria and Mr. Williams need to resign...sooner rather than later...

Otherwise the public's fear will feed on itself and lead to further mistrust and panic...and not even the reassurances fm FCB will allay this conflagration of fear & uncertaincy...


Please-and guess what will happen-the rumor mill will turn out to be-they know more than we so they jumping ship. More Madness.

[shield_2006]

And the joke is-the firm that should had have the run is benefiting from the confusion and out of the news. Amazing.

[shield_2006]

Im advising people to pull their money from CLICO AND to move it out of the system.

Whether we like it or not there is an extremely high level of systemic risk.
I will take my 3% from BONY and see how this plays out.

Later

So your advising Trinidadians to run the value of the US Dollar down to their own benefit. I see. And where will the foreign exchange come from when the Banks are depleted.The Central Bank? think they will support capital flight or just stop selling to the Banks and what impact that will have on the exchange rate and the cost of living. Great Advice if I have ever seen it.

[miktay]

So your advising Trinidadians to run the value of the US Dollar down to their own benefit. I see. And where will the foreign exchange come from when the Banks are depleted.The Central Bank?

The problem is there are few, if any, of the old guard left with enough credibility, reputation and integrity to calm the public fears.

Many have either been sidelined or have moved on to greener pastures.

And in our current govt the majority of ministers are sadly lacking in this criteria, and the current management of the central bank is not up to the task.

Our potitical parties have bred a sinking ship full of seagoing rats.

[shield_2006]

So your advising Trinidadians to run the value of the US Dollar down to their own benefit. I see. And where will the foreign exchange come from when the Banks are depleted.The Central Bank?

The problem is there are few, if any, of the old guard left with enough credibility, reputation and integrity to calm the public fears.

Many have either been sidelined or have moved on to greener pastures.

And in our current govt the majority of ministers are sadly lacking in this criteria, and the current management of the central bank is not up to the task.

Our potitical parties have bred a sinking ship full of seagoing rats.

And when we behave in a similar fashion-R we also going to turn around and ascribe blame as you do?

We still on personalities-It is past that.

Crabs in a barrel-DAMM

[Zinty]

We seem to have a history for this kind of thing. It was the same in the early 80s, what was the name of that finance house? International Trust? They offered high attractive rates, people rushed to invest their money, not giving a thought about the reliabilty of the company, in the end, it was the pensioners who suffered the most. What about Winsure? One cannot forget these guys. There are still lawsuits pending. I won't even bother to talk about HCU.

Today we have Clico, or to be politically correct CIB keeping in mind the name Clico has always been 'unstable' but what we do, we invest money because they offering nice rates, more than the banks, more than Unit Trust. Ask any top executives attached to Clico how much money they have invested. They will tell you they do not invest their money there. Pehaps they know something we do not.

We will never learn.

[shield_2006]

We seem to have a history for this kind of thing. It was the same in the early 80s, what was the name of that finance house? International Trust? They offered high attractive rates, people rushed to invest their money, not giving a thought about the reliabilty of the company, in the end, it was the pensioners who suffered the most. What about Winsure? One cannot forget these guys. There are still lawsuits pending. I won't even bother to talk about HCU.

Today we have Clico, or to be politically correct CIB keeping in mind the name Clico has always been 'unstable' but what we do, we invest money because they offering nice rates, more than the banks, more than Unit Trust. Ask any top executives attached to Clico how much money they have invested. They will tell you they do not invest their money there. Pehaps they know something we do not.

We will never learn.

I agree with everything you say except this- Clico has always been 'unstable'. CLICO was the first local insurance company to be established in Trinidad and Tobago and did yeoman service in the interest oif Trinidad and Tobago Citizens. When many people-certain people-could not get a mortgage CLICO helped them. I know a little about the transition of the Company. It started when Cyril Duprey died and there was a gap to be filled in charting the way forward. That is when Lawrence stepped in and got the approval of the family members to move the Company froward. The thing that many people do not know-is-that CLICO is a private company-in which the shareholding is among very few people. I will say no more-but-to add-that Clico has been and still is a good profit capable enterprise.

[Zinty]

I am not disputing that they did help many people with mortgages. But over the years they have grown into a huge conglomerate not only dealing in insurance and mortgages, but dabbling with every kind of investment, from Methanol to shares in RBL. They have become a jack of all trades but master of none in my opinion.

Now what they have started with in the beginning may go down the drain and for what!

[dancerboy]

I suppose-these are the dangers of living in a small country-any issue deteriorates into personalities-who do what to who-and-who do what when-and-what was done by who?

In addition-the complete lack of financial sophistication of such a large group of -people is a recipe for disaster as appears to be unfolding. It really is so sad.

This business of taking money out of Republic Bank is such amazing stupidity-as I said-put it in your mattress and watch it losse value-or stay home all day to guard it.

Trinidadians need to grow up real fast in so many ways. If you take money out of RBL and put it in Scotia-for example-and RBL is short of its reserve requirement-guess where they borrowing it from? YES-YOU-YOURS-THE SAME MONEY!!!!!!!

I am glad you said it, and not an ex-pat,because all we do is bad tork de country. And if dey keep it under dey matress, the bandits will get some good returns.

DANCERBOY

[Redman]

Im advising people to pull their money from CLICO AND to move it out of the system.

Whether we like it or not there is an extremely high level of systemic risk.
I will take my 3% from BONY and see how this plays out.

Later

So your advising Trinidadians to run the value of the US Dollar down to their own benefit. I see. And where will the foreign exchange come from when the Banks are depleted.The Central Bank? think they will support capital flight or just stop selling to the Banks and what impact that will have on the exchange rate and the cost of living. Great Advice if I have ever seen it.


Shield,
Good to know that you kn ow good advice when you see it. ;)

With all due respect you to can sit and pontificate(fashionable word) about the big picture, especially on a chat board that dosent cost you anything fro being wrong.As to where the rubber is meeting the road, I get paid to offer advice on what I see to be the risks TO THE CLIENT.Not be patriotic. So the priority would be the client not anyone's sensibilities.

Diversification is something that works. Capital Preservation is the issue.

So the question I would ask is if we can afford to be wrong. If not be ultra risk adverse.At this time

Zinty,
I think all growing economies experience similar shocks-The US seems to have one (at least) every decade,
The internet bubble, the Black Friday, Asian Contagion, Russian meltdown,the oil shock,the depression etc are all part of the deal in the free market(freedom to create some of these problems is part of the freedom).

Later

[Redman]

And the joke is-the firm that should had have the run is benefiting from the confusion and out of the news. Amazing.



HAHAHAHAHA

True. :shock:

Later

[trinimad]

DOES THIS LETTER HAVE ANY VALIDITY IN THE CURRENT SCHEME OF THINGS......IF NO BAIL OUT DOES THIS LETTER STAND UP REGARDING ANNUITIES DEPOSITED WITH CLICO??? OR IS THIS JUST A GARBAGE LETTER



Memorandum

To: All External Agencies
From: Karen Gardier- Director/ Chief Financial Officer
Cc:
Date: September 16th 2008
Subject: CLICO’s assets are secure & investments safe


We would like to assure you that the recent collapse of several financial institutions in the US is in no way linked to our investments. Our US investment holdings comprise direct investments in real estate and special projects which we own and manage ourselves

Further, our Policyholders are protected by CLICO’s Statutory Fund which is held by the Central Bank of Trinidad and Tobago. More importantly, CLICO has 72 years of experience and has prospered despite a number of economic downturns since its inception in 1936. With an asset base of over US$ 3.50 billion to date, we are confident in our ability to achieve continued success.

CLICO is the leading insurance company in the Caribbean and is backed by the global strength and experience of CL Financial Limited, which has an asset base of over US$11 billion. CLICO’s strategies for success, combined with the Group’s global and diverse investments in energy, manufacturing, real estate and financial services, have positioned the Group to withstand the current volatile economic climate.

Please do not hesitate to contact us if you require additional information.

Karen Ann Gardier
Director/ Chief Financial Officer

[shield_2006]

At this stage that letter is basically that-GARBAGE. That may well have been the situation on 16th September 2008 but the underlying parameters have changed since-quite remarkably.

[shield_2006]

Im advising people to pull their money from CLICO AND to move it out of the system.

Whether we like it or not there is an extremely high level of systemic risk.
I will take my 3% from BONY and see how this plays out.

Later

So your advising Trinidadians to run the value of the US Dollar down to their own benefit. I see. And where will the foreign exchange come from when the Banks are depleted.The Central Bank? think they will support capital flight or just stop selling to the Banks and what impact that will have on the exchange rate and the cost of living. Great Advice if I have ever seen it.


Shield,
Good to know that you kn ow good advice when you see it. ;)

With all due respect you to can sit and pontificate(fashionable word) about the big picture, especially on a chat board that dosent cost you anything fro being wrong.As to where the rubber is meeting the road, I get paid to offer advice on what I see to be the risks TO THE CLIENT.Not be patriotic. So the priority would be the client not anyone's sensibilities.

Diversification is something that works. Capital Preservation is the issue.

So the question I would ask is if we can afford to be wrong. If not be ultra risk adverse.At this time

Zinty,
I think all growing economies experience similar shocks-The US seems to have one (at least) every decade,
The internet bubble, the Black Friday, Asian Contagion, Russian meltdown,the oil shock,the depression etc are all part of the deal in the free market(freedom to create some of these problems is part of the freedom).

Later


I just not so sure that coming on here and saying what you said is in the interest of your clients.

[Redman]

Shield
The way I see it we on this sight to have a frank discussion- So I am.
Frankly it isnt anywhere unique or deeply insightful advice.
How do you think that this isn't in the interest of clients?

The Jan 19 issue of Fortune has a excellent article on AIG and it really shows how things miss left turn at Albuquerque.
I think we just starting.

Later

[lak]

Finance Minister Karen Nunez-Tesheira says she acted on "concerns" that were already in the public domain, including those by her sister who is a banker, about CLICO Investment Bank (CIB) or the Caribbean Money Market Brokers (CMMB) when she made withdrawals from both financial institutions last year. Trinidad Express 04th February 2009.

Sure, sink your sister.

[Harry Williamn]

Like ah have to eat meh words boy ...I really did not believe this CLICO bailout ting!

I check up some ah meh inside fellas and it is true so I apolgize for that one!

My gosh it is sickening to see that TNT get hit with this "****" too !

[Redman]

I have a question

Should GORTT/CBTT be winding up CL or finding ways to enable it to survive??

Would it not be preferable for the Govt to provide a guarantee to fund any liability SHOULD one exist?

Let us say that instead of the effective winding up of the CL group CBTT says we will meet any shortfall via a Govt guarantee for the shortfall in stat reserves that may come up. So

1)Give an absolute guarantee (as per the contracts) for full Principal and interest once held to maturity.NO guarantee for early withdrawal.This might help staunch the run that is currently building a head AND stabilize the monetary system as time goes by.

2)The govt takes a board presence-lets say 40 % of the various boards- as a STRONG oversight presence. Thereby for a fixed period has a element of stewardship in order to protect the peoples interest in the success of these operations, with the vision of slowly allowing the corporate entity to regain control as the need for govt backing reduces.

3)Assist CL to obtain the necessary financing for any shortfalls on through long term financing.The provision of this type of support would enable the stop gap measures to provide stability to get through this period when most asset prices are depressed.

4)Allows the various companies to run as normal and retain the ownership of (IMHO) strategic assets -Why are we going to force a liquidation during a time when globally we are getting fire sale prices.Under the current MOA the GORTT is to fund a shortfall that probably would be at its greatest given the global environment. Any body really believe that oil/energy prices will stay here for ever?

5)Mandate that the individual companies be made public within say 5 years and a minimum % be in the hands of the public. THe people would then benefit from the present situation

6) The board sign iron clad contracts for 5 years with BASIC salaries and performance bonuses to be vested/paid on the IPOs They cant benefit until the govt(people) of TnT get back the cost of this program plus what ever.

7) Tax their tail in order for the individuals and co to benefit form the assistance

CMMB, CIB both filled a void that existed in the financial markets- FCB will change the culture and therefore recreate the void that obviously needed to be filled. Is this really to our benifit.

I am part of a company that used CIB to finance the purchase of a business. It was an LBO in the normal definition of things. CIB also took a equity position thru the VCIP and has been really excellent in their support in the last year in what was an oppressive environment.
This financing would not have been possible through the banking net work especially at FCB(with whom I also have an excellent working relationship)
FCB has a different culture and correctly would not be able to do some of the things that CIB etc can do. Different market etc.

Any body have an opinion as to whether we as a people have more to benefit by enabling the business of the CL group to continue generating tax revenues,employment and indirect benefits to the population, vs breaking it up and forcing the consumer to face a less competitive financial services landscape??

Later

[Lystra Kochin]

The Depositors would be mostly EFPA ANNUITANTS.

So the bail out isnt of Duprey per se but of the people that hold these products.

Everybody should also know that ALL the banks (except RBL) hold these EFPAs and insurance contracts as collateral for loans etc so understand that bailout is benefiting them as well.


Later

I know I read this somewhere....

So in the sense that the Govn't is NOT bailing out the EFPA holders.

If you had one... what is the current collateral position ?

[greall]

I know I read this somewhere....

So in the sense that the Govn't is NOT bailing out the EFPA holders.

If you had one... what is the current collateral position ?

In that case then you now reside at #1 Sh!t Street...

Greg

[greall]

Ah iz callin u out,Reds:

http://www.trinidadexpress.com/news/CENTRAL_BANK_SUES_DUPREY-123434059.html

Greg

[letric]

Ah iz callin u out,Reds:

http://www.trinidadexpress.com/news/CENTRAL_BANK_SUES_DUPREY-123434059.html

Greg

Interesting....

[vaio]

Ah iz callin u out,Reds:

http://www.trinidadexpress.com/news/CENTRAL_BANK_SUES_DUPREY-123434059.html

Greg


"The forensic work is continuing and may result in the expansion of this claim and further action," the Bank said.

nice!

[miktay]

So CB suing Duprey et al...ah like it but hava couple questions:


On what basis does mismanagement break the laws of T&t?

Based on the answer to the above...when will the lawsuits begin against the CBTT, Carl Hiralal, and the former Minister of Finance et al for their lapses of fiduciary dury?

Am just arksing...let the games begin...

[letric]

So CB suing Duprey et al...ah like it but hava couple questions:


On what basis does mismanagement break the laws of T&t?

Based on the answer to the above...when will the lawsuits begin against the CBTT, Carl Hiralal, and the former Minister of Finance et al for their lapses of fiduciary dury?

Am just arksing...let the games begin...

Time is not of the essence ...

[Redman]

So CB suing Duprey et al...ah like it but hava couple questions:


On what basis does mismanagement break the laws of T&t?

Based on the answer to the above...when will the lawsuits begin against the CBTT, Carl Hiralal, and the former Minister of Finance et al for their lapses of fiduciary dury?

Am just arksing...let the games begin...


Directors have liability if its proven that their actions were in appropriate.

im not too clear.

But where wrong was done-buss their throat.
Policy holders should be protected.
Shareholders supposed to take the hit,Directors investigated and jailed if necessary-after restitution is made,
Dumb and Dumber supposed to have resigned long time ago.

That being said-It would be a sad end to a fantastic Caribbean Company.


Later

[miktay]

Directors have liability if its proven that their actions were in appropriate.

im not too clear.

But where wrong was done-buss their throat.
Policy holders should be protected.
Shareholders supposed to take the hit,Directors investigated and jailed if necessary-after restitution is made,
Dumb and Dumber supposed to have resigned long time ago.

That being said-It would be a sad end to a fantastic Caribbean Company.


Later

directors have liability...but large companies purchase D&O insurance to mitigate their risk...

But again...where is the crime?

[Redman]

Well I guess the courts will find out if there was any breaches.

But this is a failure of the CBTT and SOI,-yes Greall its their watch.
And now I cant make reference to the US SEC cuz mitay will hit me a developing shot.
An meh ego a little fragile this AM

Later

[miktay]

Well I guess the courts will find out if there was any breaches.

But this is a failure of the CBTT and SOI,-yes Greall its their watch.
And now I cant make reference to the US SEC cuz mitay will hit me a developing shot.
An meh ego a little fragile this AM

Later

Ok...Redz...I'll get off my developing soapbox...but just for today... Lol lol

As u pointed out we already have gubmint oversight of insurance...

But checks and balances that were sposed 2 prevent CLICO insolvency din wuk...

So how will a TT SEC ( re: another gubmint agency) prevent these failures?

[edyle]

Ok...Redz...I'll get off my developing soapbox...but just for today... Lol lol

As u pointed out we already have gubmint oversight of insurance...

But checks and balances that were sposed 2 prevent CBTT din wuk...

So how will a TT SEC ( re: another gubmint agency) prevent these failures?

I think some JAIL TIME and FINES might do a better job.

[Redman]

Ok...Redz...I'll get off my developing soapbox...but just for today... Lol lol

As u pointed out we already have gubmint oversight of insurance...

But checks and balances that were sposed 2 prevent CBTT din wuk...

So how will a TT SEC ( re: another gubmint agency) prevent these failures?


Well my point was that when there are glaring failures-the head takes the fall-they fire the chief regulator-
The process is examined and updated to close the gaps.

We have had the biggest financial conglomerate fail.
In a structure that was overseen by the CENTRAL BANK, but no changes in the oversite or regulations has been mandated.
Ewart and Carl still pulling salary and perqs like normal.

And the banking lobby has pushed and promoted this witch hunt -the EFPA was stiff competition to bank deposits.
Yetming is a BANKER for over 30 years at RBC/RBTT

Bank spreads are 8%+ and there is no competition pushing higher deposit rates.


SO the CBTT HAS TO ACT AS IF THEY PURSUING THE GUILTY PARTIES-somebody has to take the fall and be the devil that caused this.


So they cant afford for the focus to be on any thing but the devils at CL.

Because if god forbid this was catalyzed by a lack of oversight-it could happen again

What has changed?
-do you believe that CL was a repository of evil businessmen?
-or just the one that got caught?

Later

[letric]

Well my point was that when there are glaring failures-the head takes the fall-they fire the chief regulator-
The process is examined and updated to close the gaps.

We have had the biggest financial conglomerate fail.
In a structure that was overseen by the CENTRAL BANK, but no changes in the oversite or regulations has been mandated.
Ewart and Carl still pulling salary and perqs like normal.

And the banking lobby has pushed and promoted this witch hunt -the EFPA was stiff competition to bank deposits.
Yetming is a BANKER for over 30 years at RBC/RBTT

Bank spreads are 8%+ and there is no competition pushing higher deposit rates.


SO the CBTT HAS TO ACT AS IF THEY PURSUING THE GUILTY PARTIES-somebody has to take the fall and be the devil that caused this.


So they cant afford for the focus to be on any thing but the devils at CL.

Because if god forbid this was catalyzed by a lack of oversight-it could happen again

What has changed?
-do you believe that CL was a repository of evil businessmen?
-or just the one that got caught?

Later

One that got caught.

[edyle]

Well my point was that when there are glaring failures-the head takes the fall-they fire the chief regulator-
The process is examined and updated to close the gaps.

We have had the biggest financial conglomerate fail.
In a structure that was overseen by the CENTRAL BANK, but no changes in the oversite or regulations has been mandated.
Ewart and Carl still pulling salary and perqs like normal.

And the banking lobby has pushed and promoted this witch hunt -the EFPA was stiff competition to bank deposits.
Yetming is a BANKER for over 30 years at RBC/RBTT

Bank spreads are 8%+ and there is no competition pushing higher deposit rates.


SO the CBTT HAS TO ACT AS IF THEY PURSUING THE GUILTY PARTIES-somebody has to take the fall and be the devil that caused this.


So they cant afford for the focus to be on any thing but the devils at CL.

Because if god forbid this was catalyzed by a lack of oversight-it could happen again

What has changed?
-do you believe that CL was a repository of evil businessmen?
-or just the one that got caught?

Later

I agree; there is something that stinks big and the stink continues. The big boys seem to be protecting each other; as far as I'm concerned, there is no such thing as 'too big to fail' which is just a propaganda trick. It's more a matter of Corporatism, also called Fascism.

[shield_2006]

If in hindsight you tell me that what appears to be a sound business decision on the day is viewed as something else years later and you carrying me to court to pursue civil action for decisions taken--I say that is all public relations--and why some and not all the directors---stinks to high heaven.

[miktay]

Reds: Duprey may have been (is?) a visionary...but there were signs that his judgement was waning when he started expanding out of the Caribbean...specifically the hotel in Ft Lauderdale and the intention to list Angostura on the London Stock Exchange...

It's not that a brown man fm the 'developing' world can't own prime US real estate or list on forin exchanges...but cuz he din have the the very best advisors that would protect his interests from the well heeled developers/listed spirits companies...that actively discourage competition...read (trump, the related group et al...diageo,Pernod ricard, Bacardi, Fortune Brands et al)

More 2 the point...me thinks tt gubmint iz trying to cover their ass...rather than focusing on the cause of the failure...

[edyle]

Reds: Duprey may have been (is?) a visionary...but there were signs that his judgement was waning when he started expanding out of the Caribbean...specifically the hotel in Ft Lauderdale and the intention to list Angostura on the London Stock Exchange...

It's not that a brown man fm the 'developing' world can't own prime US real estate or list on forin exchanges...but cuz he din have the the very best advisors that would protect his interests from the well heeled developers/listed spirits companies...that actively discourage competition...read (trump, the related group et al...diageo,Pernod ricard, Bacardi, Fortune Brands et al)

More 2 the point...me thinks tt gubmint iz trying to cover their ass...rather than focusing on the cause of the failure...

Methinks there are many govt people whose own personal money is tied up in the issue that they are unable to exercise unbiased judgement in handling the matter. There is no such thing as too big to fail. It is more a matter of too may big boys involved too allow it to fail, imho.

[miktay]

Methinks there are many govt people whose own personal money is tied up in the issue that they are unable to exercise unbiased judgement in handling the matter. There is no such thing as too big to fail. It is more a matter of too may big boys involved too allow it to fail, imho.

Agreed. If gubmints are and will be failing...individual firms s/n be propped up by gubmint...in theory...

But when politics are involved...thiz iz not the case...

Gubmints will not allow certain firms to fail...4a number of reason...1 of which iz cuz it makes them loose face with their peers...

[Redman]

I disagree-we are a small economy-ALL the major financial institutions are too big to fail.
Too few players in the market-Mutually Assured Destruction works when there are a small number of players.


Later

[edyle]

I disagree-we are a small economy-ALL the major financial institutions are too big to fail.
Too few players in the market-Mutually Assured Destruction works when there are a small number of players.


Later

So what would you mean by 'too big too fail'.


Do you mean that all major financial institutions need to be government owned?
Do you mean that all the major financial institutions have been allowed to get too big?
Do you mean that the top managers of major financial institutions needn't worry about staying solvent ?

[letric]

I disagree-we are a small economy-ALL the major financial institutions are too big to fail.
Too few players in the market-Mutually Assured Destruction works when there are a small number of players.


Later

Disagree.

[Redman]

So what would you mean by 'too big too fail'.


- you mean that all major financial institutions need to be government owned?
-Do you mean that all the major financial institutions have been allowed to get too big?
-Do you mean that the top managers of major financial institutions needn't worry about staying solvent ?

In your order

-NO. -IN no uncertain terms-govt should be out of all business where they compete with the private sector.Im all for small govt.

-Allowed ? maybe-succeeding govts have long been reluctant to allow competition to enter-by the licensing process.So Edyle IMHO allowed would be correct.
We are a small market,miktay might even say developing, with 5 major(FCB RBLRBC,SBTT and ICB) and 1minor(Baroda) banks,
Say Baroda has 5% of the market then the remainder of the business is divided up between the 5 majors with ICB having the smallest share.If one of these institutions were to fail,it would equate to 15-19% of the market disappearing -our economy is too small to absorb that.
Look at the stasis that exists as a result of this govts handling of CL.-If we have an issue-In the CL issue I believe that govt should have stepped in,clean house-as Ive itemized earlier and then IPO out a healthy co in 3-5 years to the market-certainly not kill the co and pick the corpse apart with the few competitors-further concentrating the business into fewer hands.

-NO.How can any rational person hold that view??


We are defined (but not NECESSARILY limited)by our geographic size,and our population-in the amount of economic activity that we can generate and therefore the shocks that our system can absorb.
This brings opportunities and liabilities that are real.

I think the role of the govt should be as a final backstop and as a mechanism to manage the fall out-not necessarily to insulate.

Later

[edyle]

Ok so your meaning was best summarised by this one:

-Do you mean that all the major financial institutions have been allowed to get too big?

So, you also saying that perhaps there is something wrong with the government regulations perhaps which is allowing this 'too big to fail' scenario to develop.

For example you said:
Allowed ? maybe-succeeding govts have long been reluctant to allow competition to enter-by the licensing process

So you seem to be suggesting that the regulations might be too restrictive, somehow, discouraging competion, and thereby causing a small number to 'too big' private companies to develop.

[Redman]

Ok so your meaning was best summarised by this one:

-Do you mean that all the major financial institutions have been allowed to get too big?

So, you also saying that perhaps there is something wrong with the government regulations perhaps which is allowing this 'too big to fail' scenario to develop.

For example you said:
Allowed ? maybe-succeeding govts have long been reluctant to allow competition to enter-by the licensing process

So you seem to be suggesting that the regulations might be too restrictive, somehow, discouraging competion, and thereby causing a small number to 'too big' private companies to develop.


Im not suggesting anything.I was clear and definitive in what I posted.

I gave a loose overview of the state of play as it exist today.

Im saying that with so few players in the market-allowing 1 to fail outright has big ramifications.

Later

[Wayne]

If in hindsight you tell me that what appears to be a sound business decision on the day is viewed as something else years later and you carrying me to court to pursue civil action for decisions taken--I say that is all public relations--and why some and not all the directors---stinks to high heaven.

Yes man........................BOBOL of the highest degree.

[edyle]

Im not suggesting anything.I was clear and definitive in what I posted.

I gave a loose overview of the state of play as it exist today.

Im saying that with so few players in the market-allowing 1 to fail outright has big ramifications.

Later

I'm sure everybody would agree that 1 major financial institution failing in T&T would have big ramifications.

What I am addressing is TOO BIG TO FAIL

Obviously that does not mean, despite literal interpretations, that a company is so big that it simply is too resilient and strong to possibly fail. The underlying (and I would describe it really as propaganda) message is that a company is so big that it's failure would have such a big impact, that maybe everybody else must sacrifice themselves to save it.

I'm saying the idea of a private company being so important that everybody else must try to hold it up if faulty; predictably it is also the propaganda that those who would be directly affected adversely by the company's failure would benefit from pushing.

This 'too big to fail' concept also leads to MORAL HAZZARD where company's would deliberately take risks secure in the belief that the prevailing understanding is that they are too important to be allowed to fail.

[miktay]

Too big to fail is too big...

[Redman]

I'm sure everybody would agree that 1 major financial institution failing in T&T would have big ramifications.

What I am addressing is TOO BIG TO FAIL

Obviously that does not mean, despite literal interpretations, that a company is so big that it simply is too resilient and strong to possibly fail. The underlying (and I would describe it really as propaganda) message is that a company is so big that it's failure would have such a big impact, that maybe everybody else must sacrifice themselves to save it.

I'm saying the idea of a private company being so important that everybody else must try to hold it up if faulty; predictably it is also the propaganda that those who would be directly affected adversely by the company's failure would benefit from pushing.

This 'too big to fail' concept also leads to MORAL HAZZARD where company's would deliberately take risks secure in the belief that the prevailing understanding is that they are too important to be allowed to fail.

All agreed.

Let me state us CL as an example.
If I were in charge:

CL fails
Govt led by PM Reddo steps in

Fire Ewart and Carl.

-floats bond to stabilize the co, prevent a run on institution. Weve had too much liquidity in the system for years-30 year bond and historically low rates.

Replace management with a team mandated to
- clean up the books,
-prosecute where law was broken and where necessary.
-Determine What led to the failure-Corporate malfeasance?Regulatory failure?or just unique market conditions(AS EXISTED GLOBALLY AT TIME OF FAILURE)-


The shareholders have no residual value, and unsecured (CIB) creditors get their collateral-nothing,POLICY holders are kept whole as per the Insurance Act-
Insurance co and various holdings segregated and business continues.
On going profits are diverted to redemption of POLICY holders money and where this is done, re invested or held in escrow for retirement of debt on a lottery basis.

Replace boards of Methanol and RBL etc with oversite members to steer cos and maintain transparency.

Complete and publish accounts and get co and subsidiaries ready to be IPO d as 1 entity or as individual companies-could be 5 or 6 even.

IPO company using proceeds to retire bond issue at a premium and market return over the period of time.

This approach would have

Laid the risk at the feet of the risk takers, protected the policy(conservative investors) holders,gotten rid of those so deserved and kept the company,tax revenue, and employment roster intact.It would also deepen the investment options available and devolve ownership into individual investor hands.

Im saying that the title too big to fail is irrelevant if the actual failure of a company is too big for the economy to handle.


The same Company can be run with different individuals

Ive never advocated allowing corruption and breaching fiduciary responsibilities to go unpunished.
And never will.
But we ARE a small economy-free market implies that one is free to get as big as 1 can get.
If we limit the size of a company-we limit its growth,and ability to pass on economies of scale to the consumer.Lower lending rates,insurance premiums etc.
Larger financial cos tend to be more stable.


But we had an opportunity to keep one of the biggest and best companies to remain as a contributor to the economy.



Later

[edyle]

All agreed.

Let me state us CL as an example.
If I were in charge:

CL fails
Govt led by PM Reddo steps in

Fire Ewart and Carl.

-floats bond to stabilize the co, prevent a run on institution. Weve had too much liquidity in the system for years-30 year bond and historically low rates.

Replace management with a team mandated to
- clean up the books,
-prosecute where law was broken and where necessary.
-Determine What led to the failure-Corporate malfeasance?Regulatory failure?or just unique market conditions(AS EXISTED GLOBALLY AT TIME OF FAILURE)-


The shareholders have no residual value, and unsecured (CIB) creditors get their collateral-nothing,POLICY holders are kept whole as per the Insurance Act-
Insurance co and various holdings segregated and business continues.
On going profits are diverted to redemption of POLICY holders money and where this is done, re invested or held in escrow for retirement of debt on a lottery basis.

Replace boards of Methanol and RBL etc with oversite members to steer cos and maintain transparency.

Complete and publish accounts and get co and subsidiaries ready to be IPO d as 1 entity or as individual companies-could be 5 or 6 even.

IPO company using proceeds to retire bond issue at a premium and market return over the period of time.

This approach would have

Laid the risk at the feet of the risk takers, protected the policy(conservative investors) holders,gotten rid of those so deserved and kept the company,tax revenue, and employment roster intact.It would also deepen the investment options available and devolve ownership into individual investor hands.

Im saying that the title too big to fail is irrelevant if the actual failure of a company is too big for the economy to handle.


The same Company can be run with different individuals

Ive never advocated allowing corruption and breaching fiduciary responsibilities to go unpunished.
And never will.
But we ARE a small economy-free market implies that one is free to get as big as 1 can get.
If we limit the size of a company-we limit its growth,and ability to pass on economies of scale to the consumer.Lower lending rates,insurance premiums etc.
Larger financial cos tend to be more stable.


But we had an opportunity to keep one of the biggest and best companies to remain as a contributor to the economy.



Later

"The shareholders have no residual value"
If I understand this correctly, you mean that they get nothing because there's nothing left to get anyway, right? Is that just an assumption?

"Insurance co and various holdings segregated and business continues."
This sounds like separating the problem into the 3 companies CLICO, CL Financial, and CIB and dealing with them separately, which is what I would think is the sensible thing to do.

(Who is Carl, by the way?)

"-floats bond to stabilize the co, prevent a run on institution."
This sounds like almost the Government propping up a private company; You didn't mention anything about the Government effectively buying out the company in whole or in part, so am assuming some sort of Government ownship (interim) is what you must also intend? Surely the Government can't just go float bonds to raise capital to GIVE to a private company.

One thing that bothers me about the way thing played out - well 2 things -
- what might NORMALLY be expected to happen when a company fails
- I felt there should have been an opportunity for the private sector to buy out parts of the CL group and effectively resolve the whole issue with Government being just another potential buyer.

[miktay]

-floats bond to stabilize the co, prevent a run on institution. Weve had too much liquidity in the system for years-30 year bond and historically low rates.

Reds...i admire ur systematic approach but i have a question....

who go buy bonds of an insolvent company?

[letric]

Reds...i admire ur systematic approach but i have a question....

who go buy bonds of an insolvent company?

A government is an institution that holds the exclusive right to enforce certain rules in a given area, be it financial, social or otherwise.

[miktay]

A government is an institution that holds the exclusive right to enforce certain rules in a given area, be it financial, social or otherwise.

Ok...i'll bite. How does t&t gubmint 'force' pension funds, insurance cos, banks & mutual funds 2 buy bonds?

[letric]

Ok...i'll bite. How does t&t gubmint 'force' pension funds, insurance cos, banks & mutual funds 2 buy bonds?

Since the protection of individual rights is the only proper purpose of a government, it is the only proper subject of legislation: all laws must be based on individual rights and aimed ast their protection.

[Redman]

Reds...i admire ur systematic approach but i have a question....

who go buy bonds of an insolvent company?


They would be bonds that are issued by the govt controlled company-therefore carrying the implicit govt guarantee-
like Federal Home Loan Mortgage Bonds (used too?)
or they could be revenue backed bonds-with additional backing from the asset base-so repayment is the first claim on revenue or asset sales.So Callable at a premium.

Or Plain vanilla govt bonds. And backed as such.

Later

[Redman]

Ok...i'll bite. How does t&t gubmint 'force' pension funds, insurance cos, banks & mutual funds 2 buy bonds?

They wouldnt have to force them to buy-There is too much liquidity in the system. They sitting on cash and paying for it.
Unless they deploy thei have problems.

Also was there any doubt as to the long term value of ALL of CL assets being the lowest in history, at the time of the collapse?
In what were probably unique market conditions??

So the bond issue would have been oversubscribed-

Later

[Redman]

Edyle-I apoligize for the late response



"The shareholders have no residual value"
If I understand this correctly, you mean that they get nothing because there's nothing left to get anyway, right? Is that just an assumption?

Correct- The CL group was a closely held private company.The shareholders Should be the first to lose and last to gain,the govt would buy them for $1.00,and take full ownership-a temporary corporation sole.


(Who is Carl, by the way?)
Carl Heeralal -Supervisor of Insurance-THE MAN with the responsibility for oversite of insurance companies,in conjunction with CBTT their main task in this context is to prevent this type of situation.



"-floats bond to stabilize the co, prevent a run on institution."
This sounds like almost the Government propping up a private company; You didn't mention anything about the Government effectively buying out the company in whole or in part, so am assuming some sort of Government ownship (interim) is what you must also intend? Surely the Government can't just go float bonds to raise capital to GIVE to a private company.
Not give-but capitilize as a first step to correct wrongs,create a valuable stabilize firm and exit after recovering the full value of the investment plus costs.


One thing that bothers me about the way thing played out - well 2 things -
- what might NORMALLY be expected to happen when a company fails
- I felt there should have been an opportunity for the private sector to buy out parts of the CL group and effectively resolve the whole issue with Government being just another potential buyer.

in your order
-Well this is un precedented so normal doesnt apply.
And keep in mind that a financial services firm especially one that is established isnt stand alone-there is always cross germination,cross borrowings,contra party risk.-ie contagion.So with FINANCIAL SERVICES its not just the failure of 1 co-its the ripples that are deadly.

-In this case-that will just further concentrate the over all business into fewer hands.-Increasing the likelihood of a similar event happening soon.Look at the Euro and Greece-bail outs without change just lengthens the fuse.
Also at the time -the assets would have been sold cheap due to the world market conditions.
And the govt should be now able to get multiples of what they would have gotten-just due to market prices-and now that the co is cleaned up-you will get a better price.


Later

[Poser]

.

ten ants waz walkin down the road .... one get lost where did the rest went....................
to the Minister of Finance


ah lie rofl

[letric]

.

ten ants waz walkin down the road .... one get lost where did the rest went....................
to the Minister of Finance


ah lie rofl

You should know ...

[miktay]

Afra Raymond on CLICO, directors, gubmint influence, Carl & Ewart...

Long...but well worth reading (emphasis mine)

One of the inferences...IMHO iz that gubmint influence distorts free markets...

http://afraraymond.wordpress.com/2011/06/16/cl-financial-bailout-–-the-big-question/


The current talking-point is the major lawsuit launched by the Central Bank against CL Financial sowatees, Lawrence Duprey and Andre Monteil.

From what has been in the press, the lawsuit seems to be aimed at recovering huge sums of money alleged to have been improperly taken from the CL Financial group.

There has been a mass of press comment and the reactions have ranged from relief at the launch of the lawsuit to great skepticism as to its duration, cost and effectiveness.

In the Business Guardian View of June 9, entitled ‘The path of good intentions‘, the Editor-in-Chief of that newspaper set out cogent grounds for his skepticism on the new Central Bank lawsuit.* The old saying comes to mind – The road to hell is paved with the very best intentions.

For my part, I am doubtful of the choice of targets in the apparent attempt to deal with this financial fiasco.

The early questions emerging from this action by the Central Bank are for me ‘Why this lawsuit?’ and ‘Why now?’.

In the case of the CL Financial fiasco, the basic ‘fit and proper’ requirements have been ignored by the Central Bank, exposing us all to continued levels of risk.

The fit and proper requirements set a standard for those people who are responsible for the safe custody and investment of our monies.* If they are upheld as an important part of the financial system’s architecture, they contribute to stability and confidence.

If they are not upheld, for whatever reason, we are all left to wonder, what is the point of having yet another set of rules which are not being enforced?

Here is an outline of the bare facts -

The ultimate Trinity – Lawrence Duprey was the majority shareholder, CEO and Chairman of the Board of the CL Financial group.* In those multiple senses, he was the Chief of chiefs and the main figure of authority.
The Duprey letter – That elusive bailout request of 13*January 2009, signed by Lawrence Duprey, on CL Financial letterhead is the most solid piece of the puzzle. The plain meaning of that letter is that the CL Financial group had run out of money and was in imminent danger of insolvency.* The reading of that letter into the Hansard on 4 February 2009, appeared to have been motivated by the desire of the then Minister of Finance, Karen Nunez-Tesheira, to protect her reputation from allegations of insider-dealing.* That the signature on that letter was Lawrence Duprey’s is important.* Having made three fruitless applications under the Freedom of Information Act, it seems clear that there is no will to disclose the Duprey letter.
The bailout negotiations which were consequent on the request are additional proof of the ‘failed or failing‘ companies.
The 30*January 2009 MoU was irrefutable proof that 5 companies had failed – CL Financial, Clico Investment Bank (CIB), British American Insurance, CLICO and Caribbean Money Market Brokers (CMMB).
Given the background, a finding by the Central Bank that the Directors and Officers of those 5 failed companies are no longer fit and proper would have been incontestable.
That action would have sent a strong and unmistakable signal that this type of costly failure cannot occur without some sanction.* Of course we know of the deep links between the PNM party, then in government, and the CL Financial group.* I have also written about the fact that these CL Financial chiefs are embedded into all our political parties and that is one of the externalities of this entire fiasco.
The Central Bank never took that line of action against the CL Financial group. Throughout all this time, the Central Bank has never disclosed its reasons for not implementing these elementary safeguards, which led to the position of four of the former Executive Directors of CMMB being able to obtain a licence to open yet another investment house in late 2010, KSBM.
The CL Financial group has failed on a colossal scale, so what are the penalties to be levied against their Directors and Officers?

The sidebar shows a Central Bank letter of May 2011, which is clear and strong in calling for the rigorous application of the fit and proper standards to all Directors and Officers of insurance companies.* That letter was signed by the Inspector of Financial Institutions, Carl Hiralal, so the call for upholding of the correct standards came from the very top regulator.* No right-thinking person could object to its contents.* I think it is a strong and necessary letter.

The emerging issue for me here, given these events, is the extent to which our Central Bank could be under political control.** What is the desirable level of political control to which the Central Bank should be subject?

Those questions on the degree of independence of the Central Bank would inevitably lead to consideration of the charged issue of campaign finance/political party funding.* There is considerable evidence that CL Financial made large political donations and that is a key part of the story here.

So, to summarise on the new lawsuit, the Central Bank did not take the effective, incontestable actions available to it in the CL Financial matter.* It chose instead, having steadfastly maintained its silence on its inaction, a complex, risky and expensive course of action.* Why?

What are the results of this new lawsuit?

The Central Bank at last appears to be taking decisive action
The forensic reports are now placed outside the consideration of the Colman Commission, which can limit damage to the CL Financial chiefs and the regulators, auditors etc. That is because the Colman Commission is televised with its daily proceedings posted onto its website, while the High Court is proceeding under antiquated rules which prohibit any private recording devices, cameras or even the use of pen and paper!
The potent issue of ‘double jeopardy’ will no doubt rear its head, sooner rather than later, with the probable effect of derailing the Colman Commission.
The big question for me, given their positions, is whether the Governor of the Central Bank and the Inspector of Financial Institutions are themselves fit and proper to continue in their ruling on this matter.* If any decision has to be made on this CL Financial matter, it will only be human for them to give some consideration to how that decision might possibly affect their individual interest, as the responsible people for such a significant period in the build-up to this fiasco.

[mammadon]

Ok so your meaning was best summarised by this one:

-Do you mean that all the major financial institutions have been allowed to get too big?

So, you also saying that perhaps there is something wrong with the government regulations perhaps which is allowing this 'too big to fail' scenario to develop.

For example you said:
Allowed ? maybe-succeeding govts have long been reluctant to allow competition to enter-by the licensing process

So you seem to be suggesting that the regulations might be too restrictive, somehow, discouraging competion, and thereby causing a small number to 'too big' private companies to develop.

Some industries are more prone to less competitive structures. Banking and financial services is such, which is why in most countries financial services are oligopolies. Clico got big by becoming a conglomerate and owning many industries in a wide number of industries. Over time, they grew to own many key firms such as Republic Bank, HCL, etc. If there are regulations, it did not stop Clico from owning many companies.

I believe too in smaller government, but Trinidad has never had a tradition of small government. Most employment is in some sense generated by the state, and the government is the major driver of economic activity.

[miktay]

The bigger the gubmint...the less dynamic the
Economy...

In Good times thiz iz not an Issue...

In bad times it can make all the difference b/t growth and stagnation...

[mammadon]

True. but this then means that the private sector must pick up the slack, as well as social attitudes changing. too many trinis think the government will do them a ting if something happens,

[miktay]

[QUOTE=mammadon;319543]True. but this then means that the private sector must pick up the slack, as well as social attitudes changing. too many trinis think the government will do them a ting if something

When man cya getta food 2 eat...social
aitudes will easily change...

Az 4 gubmint largess...nothing iz free...sumbody might getta easy 10 days...but a cost will be 'extracted'4 this...Whether they kno it or not...

[Redman]

This AM on 95.5 I heard an advertisment for fund holders in the CL fund family to call CBTT for settlement.
Why in heavens name are they paying off MUTUAL FUND INVESTORS when they are yet to make a commitment on the EFPA holders..


This makes no sense

Later

[edyle]

This AM on 95.5 I heard an advertisment for fund holders in the CL fund family to call CBTT for settlement.
Why in heavens name are they paying off MUTUAL FUND INVESTORS when they are yet to make a commitment on the EFPA holders..


This makes no sense

Later

Maybe the white collar criminals on this side of the Caribbean Sea have picked up a few tricks from the Bailout Criminals up north?

[Redman]

Maybe the white collar criminals on this side of the Caribbean Sea have picked up a few tricks from the Bailout Criminals up north?

This is what happens when you send a set of bankers-(Yetming,and Holder) to handle the issue-of wrapping up CL when for most of their career their banks lost deposits to the EFPA-forcing the banks to pay higher rates to keep deposits.

Like a 7-10% spread isnt enough.

Thats like asking the wife to take care of the outside woman after an accident.

But Dookeran is proving himself to be a failure or a madman daily so I guess its par for the course.

SOMEBODY SHOULD FIND OUT HOW MUCH INTEREST WINSTON HAS IN THE SHARES OF LOCAL BANKS.
I was made to understand that he ranking.

Later

[greall]

Well...it is time to stick it to the EFPA holders including some of those credit unions scrambling to put their balance sheets in order.

Greg

[gajie]

http://www.trinidadexpress.com/news/Judge_orders_CLICO_to_pay_policyholders__59m-126048193.html

[BW]

http://www.trinidadexpress.com/news/Judge_orders_CLICO_to_pay_policyholders__59m-126048193.html

Judge orders CLICO to pay policyholders $59m
By Denyse Renne Story Created: Jul 22, 2011 at 11:43 PM ECT
Story Updated: Jul 22, 2011 at 11:43 PM ECT

It was victory yesterday for six CLICO Executive Flexible Premium Annuity (EFPA) policyholders as High Court Judge Maureen Rajnauth-Lee yesterday ordered the local insurance giant to repay approximately $58.7 million to them.

In a 51-page ruling delivered yesterday afternoon, Rajnauth-Lee also ordered that legal costs of more than $1 million also be paid.

[BW]

http://newsday.co.tt/business/0,145058.html

CLICO pays out millions to two regional banks
By JADA LOUTOO Friday, August 5 2011

INSURANCE giant, Colonial Life Insurance Company (Trinidad) Limited (CLICO) has paid out hefty sums — amounting to millions — to two regional banks, after a default judgment was entered against the company in the local courts.

CLICO had been taken to court by the Bank of Nevis (BN) and Bank of Nevis International (BNI) Limited for the full repayment of all outstanding principal, and interest payments.

Both banks held Executive Flexible Premium Annuity policies.

[Aurea]

Ah see and read this first thing this morning - Duprey boi, yuh not easy!

http://www.trinidadexpress.com/news/_90_million_A_YEAR-130326203.html

Aurea

[vaio]

there is a lot more to come out!

[kemist]

at the end of the day, are they still goin to have to pay policyholders using taxpayers' money?

[greall]

Mais oui...

Greg

[Redman]

The policy holders are not to blame.

These were approved policies by the CBTT and SOI
How is it that the regulatory bodies allowed this type of management to continue for so long.

If it is accepted that Govt took the role of regulation for the protection of its citizens,and by action and inaction allowed an insurance product to be sold for years with an implicit GOTT and explicit Corporate guarantee of principal return-HOW IS IT THAT THE POLICY HOLDERS ARE BEING VICTIMISED WHILE SHAREHOLDERS,CIB DEPOSITORS AND THE MUTUAL FUND OWNERS HAVE BEEN MADE WHOLE????????????????????????????


Later

[miktay]

There iz enuf blame 2 go around here...

Not only Duprey and his advisors but also The Min of Finance, the auditors, the soi and gov of the central bank...all stood by while thiz unfolded...

Unless they find clear evidence of wrongdoing...they will not be able to pin this on any one person or organization...

This wuz a systemic breakdown...

[miktay]

2009... Finally...

Now how about 2010?

http://www.trinidadexpress.com/business/CLICO_declares__24b_in_liabilities-138017678.html


In its first published financial statements in several years, collapsed insurance giant Colonial Life (CLICO) has presented a balance sheet for 2009 ravaged by massive liabilities of $24.5 billion and a 34 per cent decline in income.
In the company's consolidated financial statements for December 31, 2009, current CLICO chairman Gerald Yetming has said the company was finally in a position to present financial statements after "several challenging years".
CLICO's 2009 operating results "present a grim picture indeed as the board and management team grappled with the nonperformance of related party investments and the withdrawal demands of clients holding short-term investment and mutual fund products."
Former CL Financial chairman Lawrence Duprey was forced to approach the then-PNM government in January 2009 after corporate and private sector clients demanded hundreds of millions of dollars back in short-term investments with CLICO.

[Redman]

Dey will have to buss again.

Because,2009 would be the bottom for commodity prices.Soon after the collapse.
Income would decline because oil hit all time highs in 2008.

I wonder if 2010 +2011 books would support this govts position so easily.

Later

[Redman]

http://www.guardian.co.tt/business-guardian/2012-01-26/clico-audit-legal




This is interesting because the EFPAs were deemed to be insurance contract liabilities by the Supervisor of Insurance and its successor regulator, the Central Bank of Trinidad and Tobago, for at least 15 years. It is also noteworthy that the former administration went to Parliament in February 2009 to amend the insurance legislation to ensure that the EFPAs were properly defined as being insurance contracts. It is, therefore, of dubious legality for the current management and directors of Clico, by some magical fiat, to redefine the EFPAs as investment contract liabilities when 15 years of practice and an amendment to the insurance legislation would indicate otherwise. This would seem to be an example of extreme bad faith by the Government in its treatment of the holders of EFPAs and would seem to add to the ammunition in the various lawsuits that have been brought against the Government for its handling of this matter;



This is a convenient rape of the policy holders -who would represent the savings class of TnT

Tell me how the next financial instrument will be dealt with???
-Govt has reneged on Insurance and Pension guarantees.

precedent to step aside from financial commitments has been set.


Later

[miktay]

Wither our Eastern Caribbean brethren....


By Clive Bacchus
*
St. Kitts and Nevis (WINN):* Recent comments by leaders of the OECS have placed the controversial issue of compensation for the multi- million CLICO, British American (BAICO) financial crash, back in the headlines.
*
St. Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves, Antigua and Barbuda’s Prime Minister Baldwin Spencer and St. Lucia’s Prime Minister Dr. Kenny Anthony have all called for a regional approach to dealing with the loss of close to EC$2 billion in the Eastern Caribbean Currency Union.
*
Speaking to the issue Wednesday, St. Kitts and Nevis Prime Minister Dr. Denzil Douglas said it was always the contention of the OECS that the CLICO BAICO problem was a regional issue.* Dr. Douglas insisted that CARICOM leaders must seek to resolve the issue and not just leave the OECS to 'carry the bag.'
*
Meanwhile the Prime Minister did not give an exact figure for the losses suffered in St Kitts and Nevis but said customers were more affected by BAICO than CLICO.*
*
Asked whether OECS governments were contemplating action against fraudulent or improper financial transactions that were multi-territorial in nature the Prime Minister said wrongdoers would have to account for their actions.
*
Meanwhile the Chairman of the OECS Dr Kenny Anthony reiterated Wednesday that the issue of CLICO could not be resolved without bringing all governments into the picture.
*
"This means that the government of Barbados needs to bring the governments of the OECS into its trust. They need to say to the OECS that we are thinking of going in this direction to deal with this issue,” Dr. Anthony said.
*
He added that equally Trinidad and Tobago could not ignore its responsibilities to the OECS, noting that CLICO is a Trinidad creation that conducted business in the OECS.
*
The Antigua Observer newspaper reports that Dr. Gonsalves and Mr. Spencer warned of implications for the regional integration movement as a result of the financial problems associated with the collapse of CLICO and its sister company, the British American Insurance Company (BAICO).
*
Dr. Gonsalves said the situation could “wreck” CARICOM, while Spencer has described it as the worst thing to hit his country since the Allen Stanford debacle unfolded in 2009.
*
He said put another way, the total exposure amounted to 16 per cent GDP for ECCU countries and that it also translated into, “serious damage to a lot of people’s lives” and “a new species of poverty” known as “gentile poverty” that has enveloped the region as a consequence of the insurance debacle.
*
Gonsalves said, “If countries, for instance Trinidad, in the case of CLICO Trinidad and British American and Barbados, in the case of CLICO Barbados, don’t come up to the plate and address this matter efficaciously, where are we going in CARICOM?”* (March 2, 2012)

http://www.winnfm.com/news2.asp?NewsID=8282

[Redman]

They dam well withering all right.


Later

[miktay]

Yep. Withering up 2 T&T and her 'deep' pockets under the guise of integration.

[miktay]

Bdos ent outta the woods...


(Barbados Nation) How the CLICO issue will impact on Barbados’ treasury has Standard & Poor’s (S&P) worried.

The Wall Street credit rating giant says that as the CLICO drama unfolds and the Government and Opposition focus attention on a possible solution to the crisis, they are keeping a keen eye not only on Barbados and Trinidad and Tobago, but the rest of the Eastern Caribbean as well.

Richard Francis, director of S&P’s Sovereign Ratings Group, told the WEEKEND NATION in New York that whether it was the Barbados Government’s plans for the policyholders, or the Opposition Barbados Labour Party’s recent proposal about the use of the tax system to aid individual investors, the issue the Wall Street credit rating giant is very concerned about is the “contingent liability” a resolution would impose on Barbados’ Treasury.

“When the revelation about CLICO first came out, obviously we contacted the governments in the region, including Trinidad and Tobago,” Francis said. We actually had a credit watch on Trinidad and Tobago because of the possible contingent liability. Once that was quantified and given the solid standing of the government of Trinidad we actually moved back to stable for Trinidad”.
http://www.stabroeknews.com/2012/news/breaking-news/03/16/clico-has-sp-worried-over-barbados/

[miktay]

Dup

[miktay]

PIIGS arent the only countries looking 4a lil bailout money...

Spreken sie deutshe?


St Lucia Prime Minister Dr Ralph Gonsalves on Monday said insurance laws in Trinidad and Tobago contravene the Caribbean Community (CARICOM) treaty and allow the oil rich twin island republic to treat its nationals favourably following the collapse of Colonial life Insurance Company (CLICO) and subsidiary, British American Insurance Co. Ltd (BAICO).

Gonsalves told Parliament that his administration believes all policyholders affected by the collapse of the two companies should have been treated "in precisely the same manner in respect of CLICO-Trinidad".
"This is not an issue of a negotiation. This is an issue of a juridical responsibility as we see it," he said in response to a question from Opposition Leader Arnhim Eustace.
"If I might just say this first of all, widely, a number of institutions have had investment policies, annuities with CLICO-Trinidad. The position of the law in Trinidad and Tobago is that only monies which are in the statutory fund can be paid out to policyholders ordinarily resident in Trinidad & Tobago," Gonsalves said.
"We have taken the position that under the Revised Treaty of Chaguaramas that law is contrary to the equal treatment provision of the Revised Treaty of Chaguaramas and therefore has no validity."
Gonsalves said that if Trinidad & Tobago "is treating its own citizens in a particular manner, they must treat everybody in the Community in like manner".
Gonsalves said that even though there is "a deficiency of funds in the statutory fund in relation to the liabilities under the policies of CLICO-Trinidad & Tobago, there are other assets, either of CLICO-Trinidad but through its parent entity, CL Financial, in which resources from St Vincent and the other places went to purchase and we don't have those assets.
"So our position is that we have to be treated in precisely the same manner in respect of CLICO-Trinidad," he told legislators.
Gonsalves said that in the case of BAICO, "there is a slight difference because British American was a Bahamian company but all its back offices arrangements and trade were done in Trinidad and under the suzerainty, obviously, of CL Financing, a company in Trinidad & Tobago, where its body, mind and soul was resident.
"So that there is a case for the contribution from British American but not to the same extent as there is in respect of CLICO Trinidad," he added.
- CMC
http://jamaica-gleaner.com/gleaner/20120327/business/business3.html

*