Former finance minister, Karen Nunez-Tesheira, promised a $71 million bailout of the Hindu Credit Union (HCU) and to fully assist the institution but the plan fell through, the Clico/HCU commission of enquiry heard yesterday.
The bailout would have come in the form of the government's purchase of two of the HCU's Chaguanas properties. Making the disclosure was Vishnu Dhanpaul, alternate executive director of the World Bank and Permanent Secretary in the Ministry of Finance. Dhanpaul was also permanent secretary in the ministry of finance in 1987. Testifying in the enquiry at the Winsure Building on Richmond Street, Port-of-Spain, yesterday, Dhanpaul said HCU president, Harry Harnarine, requested the $71 million from the finance ministry when the credit union collapsed.\
On April 17, 2008, the minister held a meeting with Harnarine and other representatives of the HCU, Dhanpaul said. He was present at the meeting, he said. Dhanpaul said there was no agreement by the government to purchase the properties because every piece of HCU real estate was undebted. He said the findings were made after a legal team was appointed by the ministry to conduct searches of two of the HCU's properties at Chaguanas which were offered for sale to the Government. "The minister told me that Harry was being less than truthful," he said. Harnarine's attorney, Fareed Schoon, asked: "The minister promised to help and reneged on the promise?" Dhanpaul disagreed.
He said it was the HCU that came to the ministry asking that a line of credit be extended to the credit union. "The ministry does not extend lines of credit to private entities. It makes no sense," he said. Asked if the ministry had extended help to the HCU it would have halted its financial run and provided the impetus it needed to revive, Dhanpaul said he had no idea. He agreed, however, that the ministry had entered into negotiations with the HCU to find out how it could assist. The minister had certain conditions the HCU must fulfil in order to get help, Dhanpaul said. Conditions included carrying out an independent audit and sending all indebted properties to the ministry, he said. Dhanpaul agreed with Scoon it was the ministry of labour and not the ministry of finance that had oversight of the operations of credit unions. However, anything that had a contagion effect on the economy was of concern to the finance ministry, he reasoned. After the Ernst & Young audit, the ministry concluded that the HCU was insolvent and discussions with the credit union were terminated, Dhanpaul said.