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Finance Minister: Clico workers to be severed

Published: 
Wednesday, July 23, 2014

Finance and the Economy Minister Larry Howai said workers at Clico are to be severed as the Government determines the future of the company. Responding to a question on the order paper from Opposition Senator Lester Henry in the Senate yesterday, Howai said he did not have “the exact details of what exactly is happening with the workers, but there has been agreement that there will be a gradual winding down of the labour force.”

 

 

He said: “Certain amounts of payments will be made, the details of which I don’t have at the moment and exactly how many persons are actually going to be severed. I don’t have those details with me at the moment.” He said: “The intention is that it be wound down, (but) some of the employees will be kept on as part of the process of continuing to manage the portfolio, pending the ultimate decision as to where we proceed from there.”

 

He said the decision to transfer selected assets and liabilities of Clico to a new company Atrius Ltd was subsequently changed because the Government’s fiscal position constrained it from committing the estimated $1.5 billion capital investment in it at this time. He said the Atrius board was being dissolved. Howai said the final decision on the disposition of the assets and liabilities of the company was dependent on the results of the actuarial valuation now being undertaken.

 

He said the decision to abort plans to establish the company was taken during discussions between the Finance Ministry and the Central Bank, which now has supervisory control of Clico under Section 44 of the Central Bank Act. 

 

 

Henry asked Howai to explain how did the Government determine that $1.5 billion was required to establish the company. Howai said while the actuarial valuation would not be available until the middle of September, it was based on a computation and an in-house “actuarial resources of what we thought the actual net asset value of the company would be.” Howai said the Government was also looking at the possibility of continuing with Clico under Section 44.

 

He said it was not something that one would want to do, but there is precedence for it. “So that is also one of the options that will be considered as we go along,” the minister said. Clico, which is a member of the CL Financial Group, collapsed in 2009 and has received billions of dollars from the Government to continue its operations. 

 

 

Employees, represented by the Banking, Insurance and General Workers’ Union (BIGWU), demonstrated outside Clico’s St Vincent Street office last month demanding answers about the future of the company.