Clico Liquidator lodges first liquidation statement – Part 2


Here is a cheque drawn on the account of Clico – in Liquidation.

The court-appointed liquidator of Clico is Mr Lawrence Williams whose substantive office is Governor of the Bank of Guyana. If you were familiar with Mr Williams’ signature you will notice that he is not a signatory on this cheque. The reason is that Mr Williams has single-handedly converted a personal appointment as liquidator with strict fiduciary responsibilities and obligations into what I referred to last week as a triumvirate operating it seems in the most outside-of-the-law process.

On that occasion I named as one of the triumvirate Ms Geeta Singh-Knight who played a lead and illegal role in the collapse of Clico. But you will note that Ms Singh-Knight is not a signatory either. She has carefully stayed out of the limelight while the other two members of the triumvirate, Ms Tracy Gibson who had taken over from Ms Maria Van Beek as Commissioner of Insurance, and Mr Maurice Solomon, Chartered Accountant and a favourite of the government, are in the forefront. They are the ones who signed the cheque, the identity of the payee being redacted.

A diversion into legislative confusion
Let me divert a bit and look at the law establishing the Commissioner of Insurance. After Ms Van Beek migrated, the Insurance Act was amended to transfer to the Bank of Guyana the responsibility for the general administration of the Insurance Act subject to directions by the Minister of Finance. Unfortunately the amendment did not indicate what functions, if any, the Commissioner of Insurance now exercises. Surely the insurance industry is too important to be left in such a messy state of uncertainty.

Jagdeo’s legacy
Now I return to Clico. Clico was racked by illegalities before it went into liquidation. Just prior to its avoidable demise, former President Bharrat Jagdeo showed that he, and not the court, the Commissioner of Insurance or the Liquidator was really in charge. The stamp of Mr Jagdeo has been worse than the albatross around the neck of the Ancient Mariner for those with any interest in the law, in corporate governance or who believe that crime should not pay. Unfortunately none of the professionals who followed the politician seems to have made any effort to repair the damage or restore any respect for legality, sense of competence or interest in professional discipline.

From day one into the liquidation, I questioned the decision by Mr Jagdeo to ignore the principle of pari passu under which returns to creditors and contributories in a liquidation are made proportionately. And when disposal of assets began, I had cause to question the sale of properties and the granting of (fraudulent) preference to one of the creditors of the company.

The triumvirate
Nothing has changed, as evidence of the roles being played by Ms Singh-Knight, Ms Gibson and Mr Solomon challenge all the norms of decency or professional ethics imaginable. Ms Singh-Knight breached the Insurance Act and ignored the request of the then Commissioner of Insurance to comply with the law. Incredibly, after being appointed Judicial Manager under the very Insurance Act, the then Commissioner of Insurance turned around and rewarded her with an appointment as Assistant Manager of Clico, with even less oversight!

And what about Ms Gibson and Mr Solomon? It may be argued that the former is now acting not in her regulatory capacity but as an agent of the liquidator. She signs as Assistant Director, Insurance Supervision Department, Bank of Guyana. Her substantive responsibilities must surely be to oversee compliance with the Insurance Act in which capacity she should be overseeing the Insurance Act and overseeing the liquidation of the insurance company. By accepting an executive function in the liquidation, she has effectively abdicated her regulatory responsibilities.

Mr Maurice Solomon is a director of the National Insurance Scheme, by far Clico’s largest creditor. As a director of the NIS, Mr Solomon has a first obligation to the Scheme and should owe no loyalty to any other entity which would place him in a conflict of interest position. The liquidation process has brought all of those into question.

Fees, fees and more fees
As will be seen in the concluding instalment next week, the Liquidator’s Receipt and Payments Statement reveals payments for professional services amounting to $76 million between October 2010 and June 2012. By a process of elimination, this huge sum could only have been paid mainly to any or all of Mr Williams, Ms Gibson and Mr Solomon and Mr Ashton Chase, SC. Except for a block figure, the statement is amateurishly unhelpful. This is the first Liquidator’s Receipt and Payments Statement I have seen where such vital information is not disclosed.

The public and policy-holders have a legitimate interest in knowing whether all professionals engaged in this liquidation were paid, and if so, how much.

The statement has been lodged with the Registrar of Companies who as this column noted last week must cause an audit to be carried out. She has had the statement more than a fortnight and should have taken steps to comply with the law.

Misleading description
Let us return to the Receipts and Payments Statement of the Liquidator at June 30, 2012 (sic) which appeared last week. That statement discloses what is described as Realisation and Disbursements. The statement would have us believe that some $3,650.9 million of the $4,595.9 million was in fact Realisation. It is not. In fact, that sum is made up of approximately $3,000 million which came from the Caricom Petroleum Fund in exchange for the $7,000 million which the T&T owned Clico cost this country. Under the unexplained, lop-sided deal negotiated with Trinidad and Tobago by President Jagdeo our country effectively lost any right to bring legal action against Clico or the Central Bank of Trinidad and Tobago which took over the assets of Clico’s T&T parent company, the parent company of the Bahamas Clico. That is the company in which Geeta Singh-Knight and Lawrence Duprey had “invested” over $7.1 billion of Guyana policyholders’ funds. The other major receipt was $650 million hijacked from the Guyana Forestry Commission which the Commission received from the Indian Coffee maker Vaitarna. This sum should have been paid into the GFC from which, subject to the Act, surpluses could be paid into the Consolidated Fund.

Lucky bridge company
The next highest receipt is some $464.1 million being repayment of a loan made by Gita Singh-Knight’s Clico to Geeta Singh-Knight’s Berbice Bridge Company Inc (BBCI). Interest received from the Berbice Bridge Company amounted to $22.4 million, bringing the total received from that company to $486.5 million. The indebtedness of the Berbice Bridge Company to Clico at the last report date was $605.9 million, and how the difference of close to $125 million will be accounted for is a matter for speculation, since neither the de jure liquidator nor the de facto triumvirate (Geeta Singh-Knight, Maurice Solomon or Tracy Gibson) have shown themselves duty bound to offer any explanation. I am sure we did not even notice and by now have forgotten that NICIL unlawfully waived almost half a billion dollars to the Berbice Bridge Company Limited; now it seems that a company in liquidation – Clico – may be unlawfully waiving close to $125 million.

The only other receipt over $50 million was the sum of $390.3 million being proceeds from sale of assets. This is how this sum was made up:

Next week I will turn to the payments.

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