Connecting CLICO’s Dots

The Late Prime Minister David Thompson (L), Leroy Parris (R), former Chairman CLICO Holdings (B'dos) Ltd

The CLICO fiasco continues to hog the news. It is a story which has tainted the government of Barbados for almost the duration of its tenure. BU remains sympathetic to the ‘sufferation’ of thousands of Executive Flexible Premium Annuity (EFPA) CLICO investors and the others. Many were lured by the greed of high interest rates, some appeared to be ignorant to the benefit of diversifying personal investment portfolios. What makes the CLICO fiasco one with a difference is the extent regional governments and regulators are to be held accountable for CLICO’s ‘failure’. In the case of Barbados a very close relationship between the late Prime Minister David Thompson and former Chairman of CLICO Holdings Leroy Parris added to the intrigue.

In his wrapup to the this year’s budget Minister Chris Sinckler promised CLICO policyholders that there is light at the end of the tunnel. Despite the snippets here and there CLICO investors continue to stumble in the dark. The word on the street is that the judicial managers have recommended an injection of capital into CLICO to fund the shortfall in assets of 152 million dollars that will see CLICO morphing to a new company. BU believes if this is true it is laced with uncertainty.

The insurance business requires confidence from the market to be successful. Is there a precedent in the region where an insurance company was restructured successfully? Given the controversy which has enveloped CLICO most if not all of CLICO policyholders want their money. Given the harsh economic times the desire to withdraw the maturing EFPA’s will be strong. Such a sentiment does not bode well for a rebranded company funded with CLICO assets plus tax dollars. What are the alternatives? To liquidate the assets of CLICO will take years.

The claim by Neal Bisnath during the Commission of Enquiry into the collapse of CL Financial and the Hindu Credit Union (HCU) – an attorney from CLICO – that “LAWRENCE DUPREY was paid $1.1 billion from the deposits of CLICO policyholders in the five years prior to CL Financial seeking a billion dollar bailout from the Government” has caused many to sit up. The revelation, if true, is not only an indictment on Duprey but also on current and former CLICO executives, Central Bank of Trinidad, Government of Trinidad and CLICO Auditors. In the CLICO debate we have tended to personalized the arguments and in the process many who should already be fired or incarcerated are operating as if nothing has transpired.

BU’s position regarding CLICO is known. Both political parties have contributed to where we find ourselves. Our regulators have been weak and fell asleep on the job. To be expected the Barbados Labour Party has sought to make political mileage from the fiasco although it must be stated that under Owen Arthur the noise has become muffled.

Some may not appreciate the remark but somewhere in the great beyond the late Prime Minister David Thompson is wearing a smile. When he died he took many secrets with him about CLICO. Let us not forget he was Leroy Parris’ lawyer and also represented CLICO at times. Time will tell if his wife who succeeded him in Parliament will be forced to defend his legacy.

On the sideline Al Barrack owed 65 million plus interest is observing how the CLICO fiasco plays out.

0 thoughts on “Connecting CLICO’s Dots

  1. the comments on the blog clearly indicate to me that all and sundry mistrust political parties. surely, there must be another system of governance to move barbados and the other islands forward because i cannot help but repeat that political parties have outlived their usefulnees.

  2. Interesting article David, yet taxpayers are being asked to foot the bills, while these guys fly around on their private jets.

    Some politicians can be seen with them at the races drinking white wine and eating cheese while posing for the cameras.

    Barbadians need to rid themselves of the false pride they have, and stand-up against the criminal acts of these robbers in the society.

    Maybe the constituency councils can organized some marches. The unions are in need of dentures. Knighthoods tend to have this kind of affect.

    Will I get a knighthood for this? 🙂

  3. @What is This? | September 28, 2011 at 1:45 PM
    “Maybe the constituency councils can organized some marches.”
    They would adapt well to marching. That has basically been their main activity since they were set up. Marching all over neighbourhoods and creating photo opportunities for exposure on DLP TV.

    So CC’s, how about a march against corrupt insurance companies that take $34 MILLION DOLLARS of policy holders’ money (Wickham said so, not me)and pass it to a political party?

  4. $34million of policy holders’ money passed by an insurance company to a political party???? Somebody call the Director of Public Prosecutions. I can see two charges.. (1)stealing and (2) receiving stolen goods. Mek some room at Dodds for the perpetrator and the perpetratee.

  5. @ BAFBFP:
    I suspect the Auditors’ role in this CLICO fiasco will be covered up. No local audit firm will be willing to expose another member of the cartel.
    If it can be established that the Auditors singed off on the balance sheets of CLICO life (Barbados) or CLICO Holdings (Barbados) (giving them a clean bill of financial health within the last 5 years) then the policyholders should bring a class action suit against them as being contributory negligent and as an accessory to fraudulent activity.

    • Maybe PWC signed off the financials but with a comment, it which case the SOI would have had reason to act.

      We need information to flow into the public place.

  6. With no FOI it going take awhile for that to happen. Is the clico final report at the fsc as yet so people can actually read it ?

  7. millertheanunnaki and David

    There is a reason why certain types of operations are NOT allowed to incorporate as a limited liability. Your points on culpability and coverup along with those of Franklyn’s (introducing laws that protect Government agencies) represent the core of this whole thing. Yep … going after a Ltd. may just be a complete waste of time.

    PwC’s involvement should be exposed so that in future potential investors would stay clear of any opportunities that are audited by them, unless they are prepared to be held personally responsible. They are a firm after all …

  8. BU’s position is that CLCIO should be liquidated even if it means the investors will have to take a very low haircut.

    To transfer assets to a new company will take years and some of the investors should ask if it is worth it.

    The other point is that there is no justification to bailout CLICO investors and keep Barrack out in the cold.

  9. Today’s sunday Nation has a number of CLICO related articles. Practically all seem to suggest that there is a considerable groundswell towards liquidation of CLICO, even from most OECS countries.

  10. The oecs countries not really looking to put capital into new company. Meaning barbados would have to foot the majorty of the bill for the new company. Liquidation right now is the best bet for shareholder getting any money in the short term. So they should start the liquidation. Forensic audit might turn up addition fund and those too should be liquidated when found. Right now the asset to liabilities ration is somewhere between 50-60% it is a good place to start. As for persons running clico they should be locked up for the mess and their assets friezed.

  11. @ Anthony:

    Do you really expect a forensic audit will reveal the nature of certain transactions that took place between, say, 2005 and December 2008? You got to be “making sport”!

    Policyholders’ money got diverted from commercial investments to financing the political ambitions of individuals on both side of the divide. You already know that the perpetrators of this massive scam have friends who can determine the focus and rigged outcome of any so-called audit. If the external auditors turned a blind eye to obvious decisions and infelicities that seriously compromised policyholders’ interest, what makes you think that the players in this continuing saga would alter the script in the interest of justice and retribution?

    LP =friend of (DT+FS+CS+OJ) + (financier of (OSA).

    Justice will not see the light of day. Expect more fees. The policyholders are fair game in this web of deceit. JM fees + For Audit = > $20 million.

    How come so many millions of dollars cannot be accounted for and the CFO for local operations plus the President, hand picked by LP, are still in place?

  12. @millertheanunnaki

    honestly I don’t think anything will be reveal . I do have hope some will but as you said chances of that happen are very small.

  13. I note in today’s Nation (web edition) that a case is going to be brought against CLICO’s Parris and Thornhill for disobeying the SOI’s instructions re. sale of EFPA’s. Also, that in 2009 cheques of over 3 million dollars (signed by Parris) were paid to DT’s law firm (Was this against the orders of the Oversight committee, anyone?) and the suggestion was made in the article that the money was really intended to be onpaid to Parris.

    Oh what a tangled web that now appears to be quickly unravelling.

    I have long maintained that DT was by far the worse PM that Barbados has ever had.

    Think on these things.

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