There is one characteristic about which Barbadians have boasted through the years, our stable financial environment. Even in the midst of the prevailing economic turbulence Barbados’ financial space has been recognized for its resilience and good management. CLICO’s catastrophic fall as a premier pan-Caribbean company now threatens to besmirch that reputation.
BU has blogged voluminously about the CLICO Affair; the summary of which: CLICO’s problem was facilitated by deficient oversight, porakey regulation, greedy politicians and the collapse of Wall Street in the last quarter of 2007. It does not mean that Duprey and cohorts did not make bad decisions as managers of the company but the last couple years has exposed that the regulatory approved EFPA was the financial product which pushed the company over the edge. There is no doubt in the BU household that regional regulators fell into a deep coma at the wheel. Why this occurred is now the subject of speculation and investigation. BU would hazard a guess regulators and politicians alike were wooed by the smooth talking deep pocket Duprey. It is note worthy that in almost all the countries in the region where CLICO operated there is a similar story to be told.
Both BLP and DLP can share blame in the CLICO mess. The controversial EFPA was approved to be sold under a BLP government and the failure to efficiently manage the collapse was obfuscated by a DLP government whose loyalty to its biggest corporate contributor created an obvious conflict. The matter was compounded by the Thompson led government whose friendship and close family ties was widely known. The revelation that the late Prime Minister Thompson signed of on Parris’ terms and conditions of employment document in his capacity as legal advisor, along with the revelation that the wives of Parris and the late Prime Minister partnered in a deal to buy property in St. John does not paint a comfortable picture.
Affected CLICO policyholder placed in limbo as a result of the company being placed under judicial management would have been heartened by the statement delivered by Minister of Finance Chris Sinckler during his wrap-up to budget 2011. He indicated there is a meeting scheduled with the judicial managers this Friday (26 August 2011) to discuss a workable deal for policyholders. Given some of the horror stories circulating about some policyholders going crazy at the thought of losing their life’s savings, BU is pleased that a solution seems to be around the corner even if it means policyholders accessing principal investments only. Forfeiting interest is a price some would say deserves to be paid for being greedy.
BU suspects that the late Prime Minister died and took with him sensitive information related to CLICO which may never now become public knowledge. If for no other reason it might explain why this DLP government is committed to fixing the CLICO problem and promised from the start of the CLICO mess the government would protect the investments of policyholders. The legacy of the dearly departed David Thompson and a positive outcome to CLICO remain inextricably linked in the government delivering on that promise.