Finance Minister Winston Dookeran says the sale of Clico, once it becomes viable again, is part of Government's exit strategy in its involvement in the beleaguered empire once held by Lawrence Duprey.
This, he said, was one of the recommendations of a new plan which is before the Cabinet. Dookeran observed that Clico's statutory reserves had been restored by the Government's transfer of a percentage of Methanol Holdings shares. Energy Minister Carolyn Seepersad-Bachan, in a presentation to Parliament in February, said the Government planned to admit 35.01 per cent of Clico's stake in MHTL to the insurance company's statutory fund. This would mean that Clico's entire 56.53 per cent stake in MHTL, which is conservatively valued at $8 billion, would be in its statutory fund, as Clico previously held 21.52 per cent of MHTL shares in the fund.
Dookeran observed that Clico had been able to retain customers in the life insurance business and was now looking to expand. To this end, he said, Clico has been able to meet some demand of matured policies or surrendered policies. The new plan, explained Dookeran, centres on how the Government plans to recover between $10-$13 billion from Clico and CL Financial. Dookeran acknowledged that some of the companies had caught the attention of certain investors but it was not being given serious consideration at this time.
With regard to payout of policyholders of under $75,000, Dookeran pointed out that 66 per cent of the policyholders had been paid at the sum of $225.2 million.
The breakdown is as follows:
• 5, 860 Clico policyholders have been paid $192.3 million.
• 1,382 British American policyholders have been paid $32.9 million.
• 93 cases for compassionate relief have been processed and $19 million paid.
"Those who haven't been paid as yet are those who can't be located," Dookeran said.
With regard to the compassionate relief cases, Dookeran observed, that there's been discontent about the paperwork and the time to get payments.
Dookeran aims to go to Parliament, before the term ends on June 17, to seek to establish a Special Legislative Authority which will be responsible for the issuance of bonds for EFPA policyholders with over $75,000.
He pointed out that the first $5 billion paid out by the former administration was done without the right legislative authority. Dookeran said he was not disturbed by the legal challenges being mounted by discontented policyholders, in one instance by Claude Denbow and another case by former Attorney General Ramesh Lawrence Maharaj. "If the legal challenges succeed, it will disrupt the entire programme. It is high-risk strategy on the part of the policyholders," he remarked, in apparent reference to the winding-up petition being brought by Denbow. In addressing the issue of the policyholders, Dookeran said he attempted to protect the investor's interest because Clico could have gone into liquidation.
Meanwhile, Dookeran confirmed that some 144,000 depositors of the HCU will be re-paid from mid-May.
With regard to the economy, he agreed with the Central Bank Governor, that the $7 billion Public Sector Investment Progamme (PSIP) did have the desired effect of stimulating growth in the economy. Only 25 per cent of the PSIP has been spent thus far. Only 25 per cent of the PSIP has been spent thus far. Dookeran acknowledged that Government's trouble has been accessing funding for its biggest project of 2011, the construction of a $7 billion highway to Point Fortin.
