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Caricom needs more time to consider CLICO bids
Caricom finance ministers have told the judicial managers overseeing the failed insurance giant Clico’s operations in Barbados and the Eastern Caribbean they need more time to consider a roadmap for the company’s future they received on Saturday, the Sunday Sun reported. The paper quoted several un-named officials as saying ministers were poring over bids to put Clico International Life back on its feet under new owners and guarantee the investments and savings of depositors. It said they warned there would be no easy solution to the debacle which required a joint regional approach. “It is not a straightforward thing, it requires a regional approach, and you must remember that Barbados started late in this whole [judicial] process,” the Sun quoted an official involved in the talks as saying.
The paper said judicial managers Oliver Jordan and Patrick Toppin of Deloitte Consulting presented a plan for the company’s future to CARICOM’s ministerial council for finance and economic planning in St Lucia on Saturday.
It said that officials told the paper on condition of anonymity that regional governments needed more time to study the roadmap. Clico and its sister company, British American Insurance Company (BAICO), collapsed in 2009. Judicial managers have been appointed by the courts for Clicos operations in Barbados, St Kitts and Nevis, Grenada, St Vincent, Dominica, Antigua and Anguilla. Montserrat remains the only country not under judicial management. CLICO and British American between them hold an estimated two billion EC dollars (US$800 million) in liabilities in the Eastern Caribbean Currency Union (ECCU) – the six nations that use the East Caribbean dollar. In 2009, the Trinidad and Tobago government signed a shareholders’ agreement with then CL chairman Lawrence Duprey to give Port of Spain control of 49 per cent of CL Financial’s shares.
The then Patrick Manning administration injected $5 billion into Clico to keep the insurance firm running and protect policyholders. Last September, through the passage of legislation in parliament, the Government committed more funds to pay back the policyholders through a mixture of cash and bond. In January, CLICO posted a deficit of $9.4 billion in its audited accounts for the year ending December 31, 2009. Last week, during his budget presentation in parliament, Barbados Finance Minister Chris Sinckler urged lawmakers to consider that unlike that the case with Clico in Trinidad where there was a separate insurance company doing business exclusively in that country, a Clico subsidiary, Clico International Life, operates in Barbados and eight other Eastern Caribbean jurisdictions. “This distinction creates a variety of legal and other challenges to developing an effective restructuring plan for this company,” he told the House of Assembly. (CMC)
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