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Magic faces winding-up
Just three months after they were suspended from operating business, cash-strapped insurance firm Motor and General Insurance Company Ltd (MAGIC) now find themselves opposing a winding up petition. The petition was brought by the Inspector of Financial Institutions, the finance supervisory unit within Central Bank. The court action, which was filed pursuant to Section 44 of the Central Bank Act, was filed in September. The Central Bank and Inspector of Financial Institutions Carl Hiralal are seeking to wind up the troubled company and satisfy its creditors. The Central Bank’s board of directors, on June 15, this year, ordered the suspension of MAGIC’s business for a period of sixty days, pursuant to its powers under Section 68 of the Insurance Act Chapter 84:01 (as amended).
The suspension was ordered for the purpose of protecting the interests of policyholders. The winding-up petition was subsequently filed at the Port-of-Spain High Court. Yesterday, the application was heard by Justice Carol Gobin in an “in-chamber” hearing. Guardian understands that the petition was adjourned to December 10. Hiralal, who has been appointed as interim manager of defunct Clico Investment Bank (CIB), also filed a similar petition for winding up proceedings against CIB. Justice Ronnie Boodoosingh is hearing that application. “They have problems with the filing of their statutory returns with the Central Bank. The 2007 to 2008 returns were filed late and were filed incorrectly, and we have had to reject those returns. That makes it difficult for the regulator to assess the financial position of the company.
“We were advised that the company would be able to file their 2009 returns, which is due June 30. Even the current returns would not be coming in time. The company has also had problems funding the statutory fund. “The company has not complied fully with our request and this puts policyholders in jeopardy.” The company had 11 offices in Trinidad and one in Tobago with one branch in the Cayman Islands.
Hiralal said his office brought in help from the professional services firm, PricewaterhouseCoopers, for the investigation. “In order to help us with the supervisory action that was taken, we have engaged Brian Hackett, director of PricewaterhouseCoopers Ltd, to assist the Central Bank with the performance of our function during our period of suspension.” The Inspector of Financial Institutions has the right, under the Act, to assume the management of the company, suspend the board, take charge of the books, records and other documents of the company and to preserve the assets of the company.
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