Finance Minister Colm Imbert issued special directions to the Central Bank on July 13, which led to the institution directing Clico to make the final settlement of statutory fund liabilities to the Government, according to a document leaked to the Guardian by the Clico Policyholders Group.
The document appears to be a photograph of a letter relating to the minister's power under section 44F(5) of the Central Bank Act to give general or special instructions to the Bank.
According to the letter, Clico was directed to prepare the share transfer documents to effect the transfer of Clico's shares in Angostura and CL World Brands to the Government.
Those shares, which were independently valuaed are being transferred "in consideration for extinguishing of $1.908 billion of statutory fund liabilities owed to the Government."
Clico was also directed to pay the remaining balance of about $2.6 billion to the Government in cash from other Clico assets "instead of awaiting the valuation and transfer of Clico's Home Construction Ltd shares with the sum of $1.3 billion being paid within seven days of the Bank's direction to Clico and the remaining balance of $1.3 billion being paid within four week of the Bank's direction to Clico."
In the Senate on July 7, Imbert said Clico owed the Government $2.1 billion for assenting, non-residential and mutual non-residential and the insurer owed non-assenting STIP holders and mutual fund investors $400 million.
But he added that "Clico does not currently have suffficient cash to repay the whole of this amount ($2.5 billion) and the Government has thus agreed that Clico can repay the $400 million due to third party policyholders in advance of making payment to the Government on their $2.1 billion."
In his July 13 instructions, Imbert called on the Central Bank to direct Clico to make the final payment of statutory fund liabilities to third party STIP holders, mutual fund holders and the Government.
In doing this, Clico was instructed by the Central Bank to "subordinate the Government's claim of approximately $2.1 billion as assignee of the rights of non-residential STIP holders and of mutual fund holders to enable full payment to non-Government STIP holders and mutual fund investors of all outstanding liabilities due to them at the same time as Clico makes final payment to statutory fund STIP holders.
In an advertisement appearing in today's Guardian, Clico gave notice of payments to resident and non-resident STIP holders.
In a statement issued yesterday, Clico Policyholders Group chairman, Peter Permell said the group had concerns over what now appears to be the 'indecent haste' with which the Finance Minister seems to be moving to try to get the both "assenting" and "non-assenting" EFPA policyholders out of the way, as evidenced by his unfortunate July 7 statement in the Senate that assenting policyholders "do not form part of the (Government's) Clico Resolution Plan."
Permell said the Finance Minister was attempting to fasttrack a "flawed" Clico plan while subordinating the government's claim on behalf of taxpayers pursuant his powers under section 44F(5).