Minister of Finance, has been asked to answer several questions

budgetdebate2013georgepayneMinister of Finance, Chris Sinckler, has been asked to answer several questions regarding the millions of dollars invested in CLICO International Life Insurance Company, for which the thousands of policyholders and investors still await word on whether or not they will retrieve, including a call for a commission of enquiry.

Opposition MP George Payne put the questions to Sinckler this afternoon in the House of Assembly, while contributing to the discussion on the Financial Statement and Budgetary Proposals delivered on Tuesday by the minister.

“I would like to know, in his (minister’s) opinion, (if) the CLICO problem will ever be solved,” Payne asked, while noting that former Prime Minister David Thompson and current Prime Minister Freundel Stuart had assured Barbadians their money was safe.

“Are the EFPA holders likely to agree to a solution that ignores payment of, or compensation for $100 million in accrued pension up to March 31, 2012, on their principle balances,” the Opposition member questioned.

“Thirdly, some of the non-real estate assets going into the two property trusts will be divided by CLICO Holdings Barbados Limited, the Barbados parent company, since the Judicial Manager has no power over this company, is the CHB board of directors functioning so as to facilitate such a request to transfer assets to the trust?”

He also asked if the conversion of EFPA’s with a face value of $245 million to 10 year annuities, had resulted in a present value of $206 million, or an interest rate of 1.8 per cent per annum. This rate, the MP reasoned, was below the savings rate.

“Is this fair, Mr Minister of Finance, for those investors, especially when they have had to forfeit accrued interest of $58 million? Will the two property trusts, issue common or ordinary shares? And if yes, who will be the owners?” Payne queried.

“What will be the interest rate and repayment period on the two $460 million bonds? The judicial manager in his interim report on May 27, 2011, stated that at April 12, 2011, the assets on the company’s books, were valued at $802 million.

“These assets were worth $512 million and $448 million at July 28, 2011 and December 31, 2012 respectively. Don’t you agree that the longer this matter remains unresolved, the more likely the value of these assets would continue to deteriorate and add more cost to a solution?” the Opposition parliamentarian put to Sinckler.

“Related companies’ balances totalling $255 million are included in the $448 million. These are part of the assets to be transferred to the new company and the two property trusts. Are you satisfied that these are free from any incumberances?” the former Cabinet minister asked.

“Are you or the judicial manager at a stage yet to institute legal action to seek recovery from any company or individual whose actions may have contributed to the loss to CIL policyholders? Do you plan to have a commission of enquiry to probe the reason for the collapse of the CLICO group?

“And finally, do you have any doubt, about the viability of the property trust and the governance and management of the new company in the event that a sale to an existing insurance company is not possible?”

Payne said the policyholders were powerless and these were questions they were asking. He added he believe that if half of these questions could be answered by Sinckler, at least it would go a long way in consoling many of the investors who have been hard done by in this whole exercise. (EJ)

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