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Colman report coming soon
The report by the Colman Commission on the Clico/HCU enquiry will be published shortly and recommendations in it will be used to strengthen upcoming new credit union regulations, says Finance Minister Larry Howai. He revealed that in Parliament yesterday while piloting a bill to provide for the purchase by Government of certain rights belonging to shareholders and depositors of the Hindu Credit Union (HCU) and to empower the minister to make payments and issue bonds for the purchase of those rights.
Howai said the report by the commission, which was headed Sir Anthony Colman, is anticipated shortly. He said the recommendations would be incorporated into legislation now being finalised to strengthen credit union law, which would be brought to Parliament in the near future after consultation with stakeholders. That legislation aims on giving greater supervision to the credit union sector.
Howai said: “There have been some howls of protest on the basis of the initial draft of the bill which went out and we made changes to reflect some of the representations being made by the various stakeholders.
“There can be no compromise of the measures we need to ensure proper and effective governance for the supervision and management of the credit union sector, to ensure appropriate limits and regulations are made and to ensure the system of governance is one that would create a regime that will prevent the mistakes of the past and lead to sounder more robust institutions in the sector.”
Howai said since the HCU was in liquidation and as liabilities exceeded assets there was little likelihood shareholders’ positions would be made good by the sale of the company. He said Government was therefore moving to acquire rights of the depositors, investors and shareholders. He said it was Government’s moral duty to treat HCU investors as equally as Clico shareholders.
Phase one of the plan to deal with HCU investors was completed with payments to those who had deposits of $75,000 via cash payment and they would now receive the remainder of the shares held in zero coupon bonds. About $60 million in payments have been made so far, he added. Over 200,000 depositors were affected by the HCU collapse, he said. The company had 86,000 investors at a total value of $602.8 million and 128,000 shareholders to the value of $76 million.
Howai said credit union assets in T&T involved one third of the working population, amounting to significant assets of $9.5 billion and there was a lesson to be learnt in the HCU issue regarding supervision and regulation of such companies. People’s Partnership MP Suruj Rambachan, who said he was an HCU investor, claimed the People’s National Movement (PNM) government knew of HCU’s impending woes for 27 months.
He read out a report by the Commissioner of Cooperatives in 2007 recommending an enquiry into HCU, noting members could have been in serious jeopardy of losing shares, which could have impacted on the system and embarrass the government. “They knew what was going on. Why didn’t they do something about it? PNM didn’t act. Why? If there was early intervention something might have been done,” he said. He said PNM finance minister Conrad Enill was made to withdraw a statement that the HCU was being probed.
Rambachan questioned if the PNM kept the issue quiet at the time for political reasons. On PNM accusations that the former FCB chairman was on multiple boards, Rambachan said under the PNM, Sam Martin was chairman of multiple boards. Rambachan said the HCU situation was a national lesson of “ambition unchecked, greed and selfishness.”
...Imbert wants changes to bill
Hindu Credit Union head Harry Harnarine and other directors or managers of the failed credit union might profit from Government’s legislation to purchase HCU shareholders’ and depositors’ rights, People’s National Movement MP Colm Imbert claimed yesterday He voiced the concern in Parliament, saying he would not support the legislation unless Government amended it to prevent that scenario.
He spoke after Finance Minister Larry Howai piloted the bill to bailout several categories of HCU depositors and shareholders, via buyout of certain rights. Throughout Imbert’s contentions Howai was heard trying to clarify the situation across the floor. Immediately as Imbert concluded and the Parliament took the lunch break, Howai and Imbert got into a brisk conversation to clarify the issue.
In his contribution, Imbert said the bill was a “corrupt piece of legislation.” He expressed concern that “connected parties to the HCU, such as Harnarine and other HCU shareholders who were directors or managers, might benefit from the bill. “You are opening the door for Harry and those other people to profit from this. No way can we support using taxpayers’ money to fund this HCU bailout and allow such crooks and thieves to benefit from this,” Imbert said.
The bill also needed to be changed, he said, since people who contributed to HCU’s collapse may file court action to say they were treated unfairly and may try to claim benefits. He said unless the law was changed, he may be inclined to believe the bill would be used to help out people who had helped out the United National Congress (UNC).
Imbert said Harnarine had said in the Colman commission on Clico/HCU that he was a UNC financier. PNM MP Terrence Deyalsingh, in debate, noted HCU’s business links with businessman Mohan Jaikaran. He said the PP would have known Jaikaran’s history, yet the Government still put him on Caribbean Airlines’ board and that board had to be fired after a $1 billion debt. He said the only PP ministers who were saving the Government were the Ministers of Finance and National Security.
Deyalsingh said Government had not learnt from the HCU experience and former FCB chairman Nyree Alphonso had sat on multiple boards like the HCU scenario. Condemning Harnarine repeatedly, he said Harnarine “played on the word Hindu to the detriment of poor people.
“We should have legislation to put people who do things like that where they belong, in Golden Grove. Those people belong in Golden Grove,” he added. He said it was a pity no criminal or civil action could be taken against Harnarine now. Deyalsingh said a “circuit breaker” system should be implemented at the Securities and Exchange Commission to alert traders to price fluctuations.