The Governor of the Central Bank in Trinidad, Ewart Williams, has made a decision to prop up or to use a common term now BAIL OUT CLICO, which is in trouble over the pond in Trinidad and has been downgraded since August 2008. Up to press time (and this is not a press release- they - the TnT government declared that assets were safe and the company would be restored to its former glory.
Gossip is not news so I checked the facts.
“Your funds are safe,” said Finance Minister, Karen Nunez-Tesheira at a press conference yesterday in the Central Bank’s 16th floor conference room. Williams yesterday announced that the Government is to take majority ownership of banking giant Republic Bank Ltd. It will take over Methanol Holdings Ltd and Clico Investment Bank (CIB), both subsidiaries of the CL Financial Group and provide funding for Clico, in a bailout of the CL Financial group by the Government and the Central Bank.
Nunez-Tesheira said, “This is a time when we must show our mettle,” adding that there was a “Government commitment to ensure that depositors’ assets will not be at risk. “We are going to weather this storm and the only way to do this is to take action swiftly and decisively.” Williams echoed her statements, emphasising the tremendous strength of the country’s financial system.
In a press release today it was announced that Government will bailout CL Financial, the parent company of Clico and Angostura.
Key points disclosed
• CL Financial is to divert its 55 per cent stake in Republic Bank and Methanol Holdings
• First Citizens will gain control of company's Republic Bank shares.
• Central Bank Governor assures depositors and policyholders that their money is safe.
• Mr Duprey says this is "not a crisis" it is the early addressing of the situation, a pre-emptive action.
Started out as a holding company for Colonial Life Insurance Company (Trinidad) Limited (Clico) in 1993, CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide.
According to the company's website, its Industry Sectors range from:
•Banking & Financial Services
•Energy & Petrochemicals
•Forestry & Agriculture
•General Insurance
•Life Insurance
•Manufacturing, Retail & Distribution
•Marine Services
•Medical Services
•Real Estate
•Banking & Financial Services
•Energy & Petrochemicals
•Forestry & Agriculture
•General Insurance
•Life Insurance
•Manufacturing, Retail & Distribution
•Marine Services
•Medical Services
•Real Estate
http://guardian.co.tt/news/general/2009/01/30/government-bailout-cl-financial
Imagine if this collapsed.
The implications for a disastrous lack of confidence in CLICO would result in a catastrophic situation, much like that being experienced in the US and started with AIG, Wall Street and the other sub prime mortgage lending greed Kings leading to a complete lack of confidence in the economy and the obvious result. But in a shocker, Leroy Parris, the Chairman of CLICO in Barbados, (in between some of the poorest English I have ever heard espoused from any executive) emphatically declared that there was "no connection whatsoever" between Trinidad and Barbados' CLICO. He said that the company was answerable to the Barbados Supervisor of Insurance, incorporated in Barbados and so on. That is obvious. In the same breath, the man said that CLICO Barbados was a SUBSIDIARY of The Trinidad organization, so obviously he is confused because when last I checked and one does not have to do company law, a subsidiary means there is a connection. Now throughout the election silly season Mr. Thompson denied any connection with CLICO whatsoever and decided to tell all that Mr. Parris is the godfather of his children and her personal friend. That is great. Nothing like a long standing friendship.
What befuddles me then is why we need the Prime Minister to call the Governor from her late afternoon tea, the supervisor of insurance and whomever else was at the press conference to tell Barbados that "there is no need to panic" and carry on to ensure that Barbadians are assured of the safety of their assets. I do believe that Leroy Parris attempted to do this already and there was no need for a statement from the PM. He also had Darcy Boyce, a former Deputy Governor of the Central Bank present for the 5 minute briefing.
Well, if this does not have the opposite effect and instill fear rather than qualm it, then something is wrong. I don't know why but I have a lot of questions - what is Thompson using the 2 billion in foreign reserves he inherited for; what is the nature of the stimulus package he claims Barbados needs; why have prices in Barbados sky rocketed when he said the cost of living would come down; where are the 500 houses in 500 days promised in the manifesto; How will Constituency Councils work and what oversight is planned to make sure they work properly and without even the appearance of corruption; why is the PM is taking a "dictatorial" stance in telling the private sector they have x amount of months to get their information ready for him , etc. I have numerous more question but I do not see the press asking them, I cannot get a letter to the press published in either paper. This whole thing just reminds me of 1991 (not the exact scenario when Sir LLoyd Erskine Sandiford had Bajans living off three weeks foreign reserves), but the shady appearance of the antics of certain individuals. I too would like this matter cleared up cos if people in Barbados panic, there will be a run on the banks and all hell will break lose - again! If there is nothing to worry about - there is no need for a press conference. In 2001 when there was a recession in the US, Barbadians did not even feel it, simply because the then leadership (with 4 economist at his disposal) was able to cushion any impact and no one lost a single job. I am sure that anything to everything that happens in Barbados will be blamed on the recession in the US.
Ask the DLP or whomever is in Government be it in Trinidad or Barbados to be accountable and not by (in the case of Barbados) slandering people at Thorpes in St James as they allegedly did last Sunday or by Donville Innis talking about who he fed in Haynesville but by actually telling Barbadians what is happening or will happen to the economy in light of global changes and on a parochial level.
There are none so blind as those who will not see.
Hmmmm.
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