Apart from former Hindu Credit Union (HCU) president Harry Harnarine receiving a $55,000 monthly from the HCU Group, he and other top HCU directors were delinquent in repaying their loans. Loans were also given to individuals who were not members of the credit union, which goes against the Co-operative Societies Act. Some of the directors who were delinquent in servicing their loan payments received second and third loans, which was done without adherence to transparency practices. Karyl Adams, Commissioner for Co-operative Development, Ministry of Labour, gave this evidence yesterday as he testified before the HCU/Clico Commission of Enquiry at the Winsure Building, Richmond Street, Port-of-Spain. Gerald Ramdeen, junior counsel to the enquiry, in cross-examining Adams, referred to evidence Adams had given concerning the stipend and loans of Harnarine. Adams said at the time of the inspection of the office of the Commissioner of Co-operative Development in 2006-2007, Harnarine's loans were delinquent.
Adams said: "Harnarine received a stipend as president of the HCU, but also a stipend as director of other subsidiaries as well. When you add all those stipends, you get the full stipend of $55,000." Ramdeen said: "Mr Harnarine's loan balance was $1.6 million, his shares in the credit union at that time amounted to $19,380.29. He also had savings of $4,936.10. He had a Child Star account of $253, a US savings account of $374, a Multiplier Account of $413 and a fixed deposit of $5,466. So with a loan of $1.6 million, his money that was invested in the credit union as president of HCU Financial Group would have been to the tune of $40,000." Adams told Ramdeen he was correct when he pointed out Harnarine's loan's interest was one per cent, but it was later found it was actually calculated at 0.45 per cent. Ramdeen referred to these as "irregularities." Adams said former secretary to the HCU board, Gayndlal Ramnath, was delinquent in paying his loans.
Ramdeen said Ramnath's stipend was $3,500, his shares were $7,019, yet he took a loan for $175,000 and a mortgage for $225,000 in 2005. Ramdeen referred to the Co-operative Societies Act which states: No loans should be made to an officer of a credit union that exceeds the value of the person's shares and deposits and accumulated dividends, unless such loans are approved by two-thirds of the board and credit and supervisory committees.
The loan was in breach of HCU's by-laws. Former HCU chief executive officer Ravindra Bachan, who had shares in excess of $2,010, was delinquent in paying his three loans totalling $759,000. He was first granted a $300,000 loan to buy a vehicle. He got a second loan for $329,000, and a third for $130,000 at zero per cent interest. Adams said Bachan was delinquent for all three loans. In drawing conclusions, Adams summed up HCU's experience as "gross mismanagement." Adams said: "In my view, the HCU failure was because of gross mismanagement. The first area is the use of members' funds to fund subsidiaries. If Mr Harnarine wanted to form a private company, let him use his own funds, but do not use other persons' funds." He said there was a "lack of business acumen" by directors of the HCU.
