Gail Alexan­der

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.