View Full Version : Gov't bailout of CL Financial Ltd Group
http://www.central-bank.org.tt/news/releases/2009/mr090130-2.pdf
Media Release
THE GOVERNMENT OF TRINIDAD & TOBAGO
AND THE CENTRAL BANK OF TRINIDAD & TOBAGO MOVE TO PROTECT INVESTORS
In a move to protect the interests of depositors and policyholders, the Minister of Finance, Mrs. Karen Nunez-Tesheira and the Governor of the Central Bank of Trinidad and Tobago today announced that the Government has reached an agreement with the CL Financial Limited Group for the provision of a package of financial support for the group’s financial services companies.
The objectives of the agreement between the Government and CL Financial are as follows:
1. To stem the increasingly serious liquidity pressures being faced by the financial services companies within the Group – i.e. CLICO Insurance Company Limited (CLICO), CLICO Investment Bank (CIB), British American Insurance Company Limited (BAICO) and Caribbean Money market Brokers Limited (CMMB);
2. To maintain public confidence in these institutions which constitute a significant part of the country’s financial services industry, and
3. To ensure the continuing stability and integrity of the financial system.
The key elements of the agreement between the Government and CL Financial are as follows:
1. The Central Bank will assume control of CIB under the provisions of Section 44D of the Central Bank Act.
2. The third party liabilities and assets (to meet these liabilities) of CIB will be transferred to First Citizens Bank Limited.
3. CL Financial will sell, liquidate or collateralize its assets and allocate the proceeds to meeting in full all the requirements of the Statutory Fund for both CLICO and BAICO, thereby protecting in full all its insurance and pension fund clients.
4. The Government will provide funding support to fully back CLICO and BAICO to meet any Statutory Fund deficits that might emerge after the company has made all possible arrangements to place satisfactory levels of cash and other assets into the Statutory Fund in order to ensure the short as well as medium and long term liquidity and stability of CLICO.
5. Specifically, CL Financial will divest itself of all of its 55% holding of Republic Bank Limited and shares in Methanol Holdings Trinidad Limited (MHTL). The Government of Trinidad and Tobago through institutions such as the NIB and First Citizens Bank Limited will gain control of the Republic Bank shares, while the Government will gain control of the MHTL shares.
The Agreement calls for Government’s shareholding in Clico, its participation in the Board of Directors and in the Management of the company and a change in the current business model. Ultimately, once CLICO has returned to stability, it will be listed as a public company on the Trinidad and Tobago Stock Exchange.
The Government has taken these steps to assure the investing public in Trinidad and Tobago, including depositors and policy holders of the affected companies of the safety of their investments and the requirements for stability and order in the market place.
January 30, 2009
http://www.central-bank.org.tt/news/speeches/2009/sp090130.pdf
http://www.central-bank.org.tt/news/speeches/2009/sp090130-2.pdf
Those are 2 copies of the speeches at the Conference.
I don't want to discuss this to much because it will frustrate me as one of the funds with CIB is associated with my company. We were not informed beforehand of anything like this so i will see how my boss deals with this. dunno
I don't want to discuss this to much because it will frustrate me as one of the funds with CIB is associated with my company. We were not informed beforehand of anything like this so i will see how my boss deals with this. dunno
I think it came as a shock to many including CIB because just last week if i remember clearly, on the newspapers CIB was advertising a new "House on the Corner"....cant remember where exactly.....who woulda thought 2 days later they'd be screwed dunno
Well ali the thing is we had to hear from clients about it so this week we are seeking a meeting with CIB/CBTT/FCB to find out the status of the fund etc
most ppl in the financial sector knew abt this way before!
wow! but question, are the depositors of CL financial affected in any way?
well the gov't, via the Govenor of Central Bank is saying that no one shld loose their deposits....however, ppl are still worried.
Well the CBTT and FCB say not to worry so we will see.
I know a lot of people who invested a lot of money in CIB because they were getting excellent rates, more than the banks or Unit Trust. I too would be worried if my money was jumping up in CL financial.
CBTT and FCB will say that, but they cannot guarantee anything. They are the ones taking over, so I am sure they want the company to be lucrative.
Well i think CL financial stretched itself to thin. Now look at what happened.
Well i think CL financial stretched itself to thin. Now look at what happened.
This is what I believed also. The thing is, I wonder who else going to go down. How is Guardian Life holding up?
GHL posted a notice in the newspapers saying that they support the action of CBTT and that they are doing well. dunno
GHL knew that CL financial was gonna make this announcement, but they are in trouble as well!
The thing is, I am sure many people are not surprised at this buyout many people viewed CL as an unstable conglomerate.
Now if Unit Trust goes under, you know that the country is in trouble.
oh gosh dont say that, now i feeling to go and take out all my money and buy a safe and lock away all my money in it :bof:
for sure, gov't won't let UTC go under..just like they cant let clico go under
tonnerre
02-02-2009, 08:58 PM
Let's hope so vaio. As far as I know everybody and dey tantie have a lil ting put away in UTC.
Well i've heard on the news that alot of ppl have gone to Republic Bank demanding their money. Ppl are withdrawing large sums of money and RBL had to raise it's $5000 withdrawal limit at the Atms to i think $30,000. Ppl are taking out their money and closing accounts with them.
Ocel(art)
03-02-2009, 11:50 AM
hey, i trying to fully understand what's going on. i am completely lost when it comes to the financial jargon.
also, it seems the opposition are against the 'take over' of clico....
explain please. i am trying to understand everything
Blocked
CLICO Bailout fiasco
Calder Hart and the UDeCOTT Commission of Enquiry returned to haunt the Government yesterday, effectively blocking its efforts to deal with the Clico bailout in the House of Representatives.
The spectre of Hart, who is chairman of NIB, which is due hold the shares of Republic Bank under the agreement, proved to be too much for Diego Martin West MP, Dr Keith Rowley, and members of the Opposition to accept. :shocked: (I agree with Rowley here.)
Pointing out that Hart was the same man who said he did not take instructions from Ministers of Government, Rowley said he could not support the bill which would put assets worth billions in the hands of Hart.
As Rowley threw down the gauntlet, the Government was deprived of the constitutional majority needed to pass the two bills-Central Bank Amendment Bill and the Insurance Amendment bill -and to facilitate the Clico rescue plan. With the bills heading for certain defeat, a worried Government decided to adjourn the Parliament to avoid putting the matter to a vote.
Rowley signalled that he is expecting the Minister of Finance, in her windup, to satisfy his fears about Hart being given additional responsibilities over public funds as a consequence of the bailout plan.
But Rowley's contribution was merely the culmination of the severe beating which Government took from the moment the sitting began. The pressure had started with Opposition revelations that Finance Minister Karen Nunez-Tesheira and members of her family had withdrawn their money from CIB in January.
Siparia MP Kamla Persad-Bissessar, quoting from the Prevention of Corruption Act, said the Opposition had information that Nunez-Tesheira and the Central Bank Governor Ewart Williams withdrew their money from Clico prior to last Friday, after getting prior knowledge and information.
"Instead of wasting taxpayers' money to send Bob Lindquist to Cleaver Heights, send him to investigate which ministers withdrew money ... after an official from Clico went to the Central Bank early in January," she said.
"You cannot pontificate to the public about integrity when you use insider knowledge to withdraw your money," Persad-Bissessar roared.
Persad-Bissessar twice sat down to give Nunez-Tesheira an opportunity to respond. Nunez-Tesheira rose to say that she did not use any "privileged information" to her advantage and that she would respond in her windup.
Persad-Bissessar said the sequence of events was that State-owned NGC made a run on CIB of US$250 million from October last year to January.
"And today, when we hear the Prime Minister, we understand why. He has never forgiven CLICO and its chairman from being friends of the Prime Minister of the UNC," she said.
Persad-Bissessar said the level of corruption taking place under PNM with Calder Hart and UDeCOTT was making Ish Galbaransingh and Steve Ferguson look like "little boys".
"If NIB is going to be involved in this, Calder Hart must go, he cannot be left there," she thundered. ( i agree, Calder Hart should've been fired a long time. :back:)
Later, Rowley stipulated that Hart must not be put in charge of Republic Bank and he called for a repudiation of the UDeCOTT statement that state enterprises were not accountable to ministers. He also suggested that since NIB was not a wholly government enterprise, that Government establish a holding company to vest the shares of Clico, so that the money, dividends and earnings would go directly to the Government via this holding company.
Speaker after speaker raised the issue of Hart's continued chairmanships, citing the disclosures made in the Commission of Enquiry as the basis of their position. Noting that Government would have the power to appoint directors to all the Clico companies it now held, Panday asked: "What kind of directors? Calder Hart and (Andre) Monteil? These are the same people who appointed Calder Hart to UDeCOTT, coming to tell me I must trust them to appoint directors to RBL and CIB... If you are serious about appointing fit and proper persons, you will fire the board of UDeCOTT."
Panday described the bailout as a "hostile takeover", which included control of the media.
The Government last night adjourned before the committee stage and final vote in order to give itself, the Opposition and Rowley the time to arrive at a middle ground. The bills are crucial not just to Clico, but to the health and well being of the economy of Trinidad and Tobago.
According to political observers, this administration is for the first time in a real bind.
Normally, it is in the Senate that Government has to take a conciliatory approach to special majority legislation. But Rowley, who was fired as a Cabinet minister over the issue of Cabinet oversight of UDeCOTT, now holds the trump card. :gna: :gna: :gna:
http://www.trinidadexpress.com/index.pl/article_news?id=161433730
Well i've heard on the news that alot of ppl have gone to Republic Bank demanding their money. Ppl are withdrawing large sums of money and RBL had to raise it's $5000 withdrawal limit at the Atms to i think $30,000. Ppl are taking out their money and closing accounts with them.
People panicking. Can't say I blame them. My accounts are also with Republic and FCB, but I am not really worried.
I wonder if I should continue depositing money in my pension fund I have with Clico, or should I just scap that and move on?
^ dunno what to tell you. But they are telling depositors that their accounts would be ok dunno
You know what is hilarious, I read somewhere that when the Ministers got wind of this weeks ago they ensure that they withdraw all their money from CIB. Now they telling people not to panic! Trini jokey oui!!!!
Thank goodness i have no money there.
Hawke
03-02-2009, 03:46 PM
What's it like over there? People wise.. Are people nervous? concerned? worried? It is predicted that the recession should be rock bottom early this year for most of europe and things will be picking up from there.. Ireland will take a longer time as we had a heavier fall than most european countries.
We've had many job losses, and the banks are making distubing announcements, is it the same across there?
Nothing so serious here (as yet). But since this thing with CL Financial alot of ppl have withdrawn money from Republic Bank. The bank said since friday that withdrawals totalled TT$6million.
So far the banks among some other businessmen are saying that they are in a good position.
dunno
But i know people are worried because i am.
in relation to this CL Financial thing, why doesn't the BOD tell the public the types and amounts of bonuses they got last christmas....hmmmmmmmmmmmm?
It really makes you wonder.
CL Financial is considering seeking legal advice on what has happened. Now everyone is calling this bailout a hostile takeover.
Doesn't suprise me. The stench of corruption is in the air.
So like, Keith Rowly along with the opposition voted against the bailout plan is that right?
So what happens if they dont pass the bill?
Rowley is making sense regarding this Calder Hart issue. Hart needs to go.
I'm not sure exactly what happens. But i think this bill could be an amendment to the old legislation. I am not really sure.
But remember the Governor of the Central Bank said that CL Financial did nothing illegal. So i think if CL Financial took this to the courts they have a pretty good chance. The gov't can give them a loan but there is no need for the Govt to take them over.
The thing is this is not a bail out but a buy out! If Clico do not get the funds, people going to lost their money. If the government steps in, there is a chance that peoples funds will be saved.
But, it does not take one hand to clap. Government is not doing anyone any favour, they want their stake in this to!
The thing is this is not a bail out but a buy out! If Clico do not get the funds, people going to lost their money. If the government steps in, there is a chance that peoples funds will be saved.
But, it does not take one hand to clap. Government is not doing anyone any favour, they want their stake in this to!
dont forget about NGC making large withdrawals from clico. i think it was somewhere in d millions or billions. maybe because of that clico didn't have the money to pay them.
Rowley gave his vote for the bail out bill afterall. :no:
trini real jokey yes! preach one thing and do another!
i think they had a compromise, i wonder what it was.
What I want to see is if the people who invested money will be able to access their funds. I am sure the government is aware that the people would pull out their money once they are able to.
I really want to see how this plays out!
Ocel(art)
12-02-2009, 04:41 PM
now a canadian company wants to buy republic bank
Which Canadian Company?
Any updates on this CL Financial buyout. People have access to their funds? What news?
Any update on the CL Financial group. People able to withdraw their money?
maybe someone can confirm but i think i heard that CIB depositors will be allowed to withdraw their money as of yesterday...
http://www.trinidadexpress.com/index.pl/article_news?id=161444326
100 show up - CIB payout at Oval
More than 100 citizens who had investments with the dissolved Clico Investment Bank made their way to the Queen's Park Oval in Port of Spain yesterday to cash in their investments with the failed bank.
CIB's assets have now been taken over by State-run commercial bank First Citizens.
First Citizens CEO Larry Howai told the Express that 100 (depositors) on the first day was a good turnout.
Overall, there are about 250 customers who have to be paid by First Citizens, as their CIB deposits have matured or will mature by Friday.
While several customers were sitting in the stands at the Oval patiently waiting to have their claims processed, a handful of disgruntled depositors, who arrived within the time frame stated for payment, told the Express they were not allowed in because too many people were already present. They said they would have to return either today or on Friday.
Despite the complaints, Howai said in a phone interview, "There was a steady flow of customers and the process was pretty well handled. Customers were satisfied and most rolled over their investments (with First Citizens)."
Like Howai, other First Citizens employees present at the Oval told the Express the fact that FCB had taken over CIB's assets and liabilities worked out well for the company, because many CIB customers have chosen to re-invest their money with FCB because of the convenience.
The employees also believe this shows that despite the fallout from the CL Financial debacle, many customers still had faith in the banking system and are willing to put their money into the local financial system.
Overall, depositors were tight-lipped to speak to the media about the other institutions in which they will be putting their money, as they believe the rising levels of criminal activity make it unwise to discuss their money matters .
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