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NIB seeks bailout from Govt over debt by Clico
The National Insurance Board (NIB) is hoping for a government bailout of $625 million owed to it by Clico Investment Bank (CIB) from a lawsuit last year. “We are in discussions with the Government on the matter,” Karen Gopaul, acting NIB executive director, told the Public Accounts Committee (PAC) in Parliament on Tuesday.
NIB board members and senior officials appeared before the PAC to answer questions on its financial statement for the year ended 2010. Gopaul, employed at the NIB for the last 23 years, made the disclosure after PAC chairman Colm Imbert suggested to her the NIB was hoping if it could not recover the money from Clico, it could receive the money from the Central Bank through the Ministry of Finance.
Gopaul said that was one of the options the NIB was looking at. And why did the NIB put $625 million into CIB, in 15 multi-million-dollar deposits between September 2008 and January 2009, at a time when the bank was on the brink of collapse? This question was posed by PAC member Sport Minister Anil Roberts.
Former Urban Development Corporation (Udecott) chairman, Calder Hart, who has been enshrouded by allegations of corruption, was appointed chairman of the NIB around this time by the then PNM administration, it was said. New NIB chairman Adrian Bharath, who was appointed in December last year, said an immediate requirement was to increase the state organisation’s risk-management framework.
NIB director Ruben Mc Sween, who has been in the post for the last six or seven years, defended the organisation. He said there were risks associated with investments and that sort of thing happened with all banks. Correcting Roberts, he added Hart was not executive chairman of the NIB at the time. “He was merely chairman. The other members (of the board) are with power to vote or not to vote.”
McSween said it was difficult for him to sit there and accept that members of the board would have known Clico was on the brink of collapse and invested in it. Another $500 million involving the NIB also came into question. Attorney General Anand Ramlogan said the NIB’s portfolio yield was projected to be a little over nine per cent but a little over six per cent was actually realised. This meant a shortfall of about $500 million, he said.
“It means that the NIB earned less than it was projected to earn,” he added. McSween admitted it might have been an ambitious project but blamed the shortfall on the declining global economy. Imbert, intervening, asked if, when the projected target was set in February 2009, the NIB board was not aware there was a global financial crisis.
McSween replied it was not that the board was not aware, but that while other world economies were declining, T&T was still doing pretty well.
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