The BLP administration is showing how corrupt they really are.

They are about power at any cost.

Even if it is at bajan’s expense.

Sad very sad.

The extract below from:http://www.capital-chronicle.com/2009/04/credit-crisis-in-caribbean-cl-financial.html makes interesting reading. In particular “So it would make sense for the government to hedge by encouraging multiple bids rather than halting the brokering effort at a single potential buyer as they have done.”

“Given this realpolitik one CL financial subsidiary, the Barbados-based US$100m (by assets) life insurer Clico International Life, may not see material benefit from the fund. In breach of regulatory reserve requirements, the firm requires capital having been caught out by an aggressive underwriting strategy, too much leverage, falling asset markets and illiquid holdings. Salt in the wounds, it also bought bond-based but derivative-powered “guaranteed return” structured investment products from Deutsche Bank which carry redemption penalties if cashed early. This further hurt its liquidity position.

Which is why, as much of the rest of the CL Financial insurance operations in the eastern Caribbean fall apart, it is in talks brokered by the Government of Barbados to sell up to a competitor. That single suitor is a Bermudan firm of identical gross asset value – Bermuda Fire & Marine (BF&M) – whose capacity to finance an acquisition that will double its size whilst maintaining a prudently structured balance sheet is surely questionable.

Understandably in a small island with rising unemployment and where nearly half of all households have policies with the firm the survival of Clico has become a hot political issue. If BF&M choose to cherry pick – and who would blame them in the current economic context – there will be a rump of operations left over for the local social safety net and taxpayers to deal with. Worse, BF&M could simply walk away.

So it would make sense for the government to hedge by encouraging multiple bids rather than halting the brokering effort at a single potential buyer as they have done. And there is a cheap and elegant method of so acting which might even have a place in the current US context: a sovereign guarantee underwriting against further falls in value the bulk of the riskiest and most illiquid company assets.”

The question to be asked is why no similar concern expressed at the recent downgrade in A.M Best Rating of Sagicor

Why are you bringing Sagicor into this? so far Sagicor is not in the same predicament as Clico. The problem with Clico and you and everyone else knows is the relationship between the PM and Leroy Parris. There is an old bajan saying that goes friendship and business dont mix and that is the crux of the matter.

The job of the Opposition is to oppose and that is what Ms Mottley is doing and frankly I dont give a damn about either party B or D cause they are the same bunch of power hungry liars just using a different letter. Ignore whatever Ms Mottlay has to say and try to get the Leroy Parris to act like a man and not the arrogant bastard that he is portraying, at least everyone knows where MS Mottley stands since this Clico affair broke please tell me where Leroy Parris stands, what reassurances has he given the staff and policyholders? As far as I am aware NONE and that is the problem right there, nothing from Parris and a bunch of double talk from the PM.

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“The problem with Clico and you and everyone else knows is the relationship between the PM and Leroy Parris. There is an old bajan saying that goes friendship and business dont mix and that is the crux of the matter.”
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This is a petty and unsustainable argument, and especially so in a small society. How does one manage the Barbados economy, Government business and social development without doing business with some persons who are one’s friends?

Obviously the real test of such an arrangement is an objective analysis of the actions, deals and results.

Did not the BLP deal with their friends? or was those well known names that kept recurring just independent mediators?
What we need to do is to compare the RESULTS of the CLICO decisions by Thompson with similar arrangements made by the previous administration.

…and by the way , that Bajan saying does NOT mean that one should not deal with friends, but rather that such deals should be BUSINESSLIKE – not informal, casual or biased as friends tend to do….

The opposition should not oppose for opposing sake. Nor should they appear to be hoping for a failure of the local economy to make a political point.

Worse still, the opposition should be careful not to appear to be actually creating conditions that will encourage hardships for Bajans.
It does not aid their cause….

@Nostradamus

First Sagicor is a publicly traded company and must sign on to best practice governance structures. In the case of CLICO we have a private company which through entrepreneurial enterprise has become a large company. The fact that our region despite all talk about CSME and CARICOM has not implemented a regional harmonized regulatory framework for pan-Caribbean companies should not be 100% blamed on CL management.

David, I am referring to the Barbados Company, Clico International Life Insurance Limited. Although it is a private company they still have certain legal requirements regarding the publication of their financial information.

Where is that information? The fact that the information is not available to the public has absolutely nothing to do with the establishment of a regional harmonized regulatory framework.

Readers should note the following provision of section 39(2) of the insurance act of Barbados

“Every company shall publish
(a) the balance sheets referred to in paragraphs (a) and (b); and
(b) the profit and loss account referred to in paragraph (c),of subsection (1) annually in the Official Gazette and in a daily newspaper
within 4 months of the end of the financial year.”

This is now may 10 and has the public seen anything!!

David, you ask “Should CLICO be blamed if the Supervisor sat on his ass? Should CLICO be blamed if the previous government ignored the Statutory Fund shortfall?”

The answer is yes, yes , yes! The chairman and directors have a responsibility and they are obligated to ensusre that they carry out their responsibilities. Heads should roll.

As for HR1 and CBC their directors should also be held to account. Taxpayers money being squanders and and no one gives a damm.

When speaking on the Clico matter, we should differentiate between the Insurance company and Clico Holdings.
CLICO HOLDINGS IS NOT IN ANY FINANCIAL TROULBLE.

I hope you guys can sort this out. It’s a sham CLICO couldn’t last.

Any big company or big companies that has or have been as seriously grossly mismanaged as CL Financial Co Ltd and some of its subsidiaries have been including CLICO Holdings Ltd in Barbados must on reasonable grounds be taken control over by the governments of the countries within which they are operating, given the still significant policy holder/investor/employee interests that would be at stake if they were allowed by these said governments to continue to be as seriously grossly mismanaged at some times before.

The facts are that where CLICO HOLDINGS in Barbados is concerned this entity blatantly allowed one of its subsidiaries to be in breach of the statutory reserve fund requirements, and had NOT for the collapse of its parent body in Trinidad and Tobago it is reasonable to think that scores of Barbadians – almost all policy holders, investors and employees too, would NOT have known about the fact of this breach – which is the huge deficit in the statutory amount required.

The fact too is that CLICO Holdings failed in its legal duty to inform policyholders, investors, employees and the general public about this breach of the statutory reserve fund requirements and other shortcomings, and failed to give them any understandings as to how these requirements and shortcomings were to be overcome. Are there any other statutory funds too that are NOT in breach by the CLICO Holdings corporate? Is CLICO Holdings therefore a good corporate citizen? No. Not in such cases!!

What CLICO Holdings has also been doing is putting at serious risk the money value of those policy holders investors and creditors that have had connections with this entity by its seeking to own and control too many assets in Barbados – many of which did NOT have any immediate prospects for guaranteeing returns on the purchases made, e.g. The now increasingly derelict Sam Lords Castle Hotel, Villa Nova. It is totally wrong and reprehensible for CLICO Holdings to have been seen to be doing these things whilst putting itself in more debt by building new office facilities for itself!

Were a PDC Government in office today, it would have been our duty to ensure the taking over of any of CLICO Holdings subsidiaries found here to be putting at severe risk the policy holders, investors, creditors and employee interests in Barbados, with a view to making sure that CLICO Holdings is divested of many of its assets, and with a view of making sure that it incorporates best company practices into its remaining organizations, so that it would be in a better position to manage its own affairs, to be able to give full respect the rights of its policy holders, shareholder and relevant others, and so that its would be very certain of meeting ALL of its statutory requirements.

Finally, what this continuing CLICO Holdings saga brutally shows up is the inherent weaknesses of this present political corporate financial architecture that is so pervasive throughout Barbados that the DLP and BLP must be wholly blamed for the dastard roles that they have played in allowing it to come to this sordid point. So, Down with the DLP and BLP!!

PDC

On April 3, 2009, a day after his return from the Clico, British American financial rescue mission in Antigua, Dominican PM Roosevelt Skerritt disclosed that “the Barbadian government gave a commitment that it will honour the obligations of Clico (Barbados) Holdings in the Eastern Caribbean.”

The April 24 issue of the Nation newspaper quoted PM David Thompson as saying, “A memorandum of understanding is currently being drafted for the sale of the Life Insurance arm of Clico Holdings (Barbados) Limited.”

Thompson further disclosed that Barbadian economist, Frank Alleyne, is to be appointed to the board of Clico Life and that the company will be subjected to a full audit.

Does the foregoing reflect a healthy company in control of its destiny?

There is another reason why the bosses at Clico (Barbados) fear exposure. Clico (Barbados) owned Clico (Bahamas) and its reckless investment policies there may have caused operations in the Bahamas to go belly up.

Both Clico (Guyana) and Clico (Suriname) have made claims of US$34 Million and US$15.5 million against the Clico (Barbados) owned Bahamian unit. Clico holdings in Belize, Turks and Caicos, US Virgin Islands and Cayman (which were administered by Clico (Bahamas) have been similarly stricken.

In Cayman, the monetary authority imposed additional restrictions on Clico Cayman, prohibiting it from writing new business or transferring assets without approval.

On April 2, Bahamian PM Hubert Ingraham, in a detailed and transparent account, told his country’s parliament that, “The parent company of Clico (Bahamas) is Clico Holdings (Barbados) Limited, a company incorporated in Barbados. Clico Holdings (Barbados) Limited is itself owned by CL Financial Limited, the parent company of Clico…” Clico says that their finances are strong and their investments are safe, but provided no proof. It is like the guy who tells the girl ‘trust me.’

Nine months later he cannot be found. Will Clico be around? Can it survive without the massive injection of tax payers’ money?

Readers might want to know where all of the money went. Well, look north to Florida and a company called Wellington Preserve Corporation.

Follow closely the bouncing ball.

Wellington, whose primary business is property development, is owned by Clico Enterprise Limited, which is owned by Clico (Bahamas), which is owned by Clico (Barbados), which is ultimately owned by CL Financial.

To follow the money trail, here’s another excerpt from PM Ingraham parliamentary address: “Since 2004 Clico (Bahamas) began making excessive cash advances called ‘loans to subsidiary’ to Clico Enterprises Limited.

In 2003 there was zero ‘loan to subsidiary’. However, loans to the subsidiary increased as follows: 2004 ($37,092,149), 2005 ($53,760,786), 2006 ($68,301,770), 2007 ($57, 010,248). Loans were granted at a rate of interest of 12% per annum with no fixed maturity rate.

“In 2007, ‘loans to subsidiary’ represented 58.56% of total assets and 68% of invested assets.

These advances to Clico Enterprises Limited were made to Wellington Preserve Corporation’s Florida project. This US investment is in respect of a 600-acre real estate development with a reputed value of $80 million.

A write-down of $25 million occurred in 2007, mainly as a result of the decline of sales in the Florida real estate market and the non-completion of the project.

As of December 31, 2008, loans to subsidiaries of Clico (Bahamas) were $73.6 million.

http://www.thevincentian.com/dcmain.aspx?p=0&i=2173&skin=62&tID=198

Dark Knight wrote ” a fixed annual bonus of US$2 million ”

I thought that bonus was from the French word bon, meaning good.

How than can anyone get a fixed bonus?

A bonus should only be paid if the worker did bon, that is good.

@Donald Duck

Agree with you. PM Thompson jetting around on CLICO’s plane was an error in judgment committed by a green PM. Can we compare it to when former PM Arthur appointed Wilkinson to head HRL knowing he was the Godfather of his children?

And besides Owen cannot be godfather to any Anglican children.

Owen is not now and never has been a member of the Anglican Communion or a member of any church that is in full communion with the Anglican Church. So whatever he is to Wilkinson’s children he certainly is NOT their godfather.

He might be the father’s friend, but it is IMPOSSIBLE for him to be the children’s godfather.

David you and Owen might be unfamiliar with the teachings of my church; but I am not.

No need to do a google when I am in the pew almost every Sunday.

Yes, Yes and YES we can and dont go saying that is an error in judgment by a green PM he has been in politics long enough to know better.

Same bunch of crooks and liars only thing different is the letter!

BU wrote, “Is CLICO Being Used As Target Practice”?

BU you should really be asking the other question. Was Clico and the funds of its policyholders and investors used as a slush fund by Parris and Thompson?

It was not Ms. Mottley who brought about the financial crisis in Clico. She only raised concerns about it.

And where was Her Majesty’s Loyal Opposition? This is the answer.

Dark Knight, why didn’t the BLP deal with the statutory deficit when in office?

We don’t like the tone of the conversation by CLICO management based on media reports regarding the ICBL/CLICO deal.

Why has CLICO been so late in responding to ICBL?

Why did CLICO not sign the non disclosure agreement to permit deeper discussions to continue?

What information is being hidden from the public regarding the propose due diligence by ICBL over CLICO assets?

Welcome to the blogs Barnabas :-).
.

Secondly, it must be stated that the opposition’s call for judicial management of Clico is not to dismantle it but rather to protect the policyholders and investors. Trinidad has gone that route. Has there been a dismantling of Clico Trinidad? What utter nonsense am I reading? If you follow what has happened in Trinidad you cannot come to the conclusion that judicial management means dismantling.

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Rubbish, Anonymous! You are obviuosly reading your own nonsense.

There is no Judicial Manager in T&T. The Central Bank entered into a Memorandum of Understanding with the company. And the Barbados government obviously has a similar understanding!

Duprey is still Chairman but according to the Trinidad Express (http://www.trinidadexpress.com/index.pl/article_news?id=161477002)

“The Manning Government, through its lead negotiator on the State bailout, Finance Minister Nunez-Tesheira, has made clear that Duprey must go as executive chairman of the group’s holding company, CL Financial.

Government last week presented Duprey with a list of demands for management control of the privately-owned conglomerate which went knocking on Central Bank’s door for financial rescue in January.”