Bank of Guyana disposed of Clico assets on Friday

I learnt to my consternation that at the Clico Head Office last Friday, the Bank of Guyana (BoG) purported to dispose of assets of the beleaguered insurance company. Consternation because by that time the BoG and its attorneys should have been notified or ought to have known that it was unlawful for it to act as liquidator, and that under section 449 (b) of the Companies Act 1991, it was guilty of an offence.

Consternation too because among the high officials participating in the activities last Friday were Ms Marcia Nadir-Sharma, attorney-at-law and Deputy CEO of NICIL, which should have no hand in matters relating to the liquidation of Clico assets, or any other Clico matters, period. Instead Ms Nadir-Sharma acted as the co-ordinator of the proceedings. Commissioner of Insurance (ag), Ms Tracey Gibson, also an attorney-at-law, and Mr Maurice Solomon, Chartered Accountant, were also among those present.

My understanding is that the government might be interested in the huge building in Camp Street to house government ministries, and NICIL which has earned quite an unfavourable reputation over the past few years, would be in a conflict of interest. This building has a market value of $1,503M. I understand, however, that the highest bid was $450M.

Ms Gibson has been unavailable to perform her statutory duty under section 150 of the Insurance Act to allow members of the public to inspect documents filed under that act, but presents herself at a liquidation process in which her office has no legal, statutory or moral role. In fact, had her office acted as the law required it to in relation to Clico, we would not now be in this eleven billion dollar mess. It must be said, however, that Ms Gibson was not Commissioner while policyholders’ money was being shipped unlawfully out of Guyana and took no active part in Friday’s proceedings. If she was there at all, then it ought to have been to see that no hanky-panky took place. Now, let us see what she is going to do about the improprieties she witnessed.
For his part, Mr Maurice Solomon is a long-standing director of the board of NIS which is responsible for the ill-advised and poorly supervised multi-billion dollar investment in Clico, the timing, probabilities and consequences of full recovery of which are in considerable doubt. My information is that at the proceedings, Mr Solomon was variously described as the “BoG representative” and as “the Liquidator.” Interestingly, Mr Solomon’s firm is also the auditor of the New Building Society to which Clico sold its shares and which is now to be brought under the FIA!

At the apex of this, is the Bank of Guyana and its Governor Mr Lawrence Williams, prepared to ignore section 449, other provisions of the law and an order of the court.

Today, days after the issue of the amended order by the Chief Justice (ag) revoking the appointment of the Bank of Guyana as liquidator, the Deputy Governor of the Bank is quoted as making official pronouncements regarding Clico’s liquidation, not only compounding the section 449 offence but acting in contempt of the order by the court. But this is Guyana – where the law is routinely, casually and flagrantly breached, where professionals abandon the rule of law in favour of silence and profits, where the press is missing at crucial times, and where all of this is sanctioned or permitted by those responsible for upholding and enforcing the law. It is time to say that Guyana ‘really gone,’ that there is no hope for our bleeding country.

Liquidating CLICO: Avoiding the pitfalls – part 2

Introduction
As I write this column from Trinidad, I notice that the news in the print media and the discussion and talk shows are about the financial implications to the country arising from the collapse of Clico. The TT$12 billion owed to some quarter million Clico Trinidad depositors represents about a quarter of the TT$49 billion national budget, indicating the significant ‘adverse multiplier’ effect on the economy. It is interesting, however, to observe the contrasting sentiments in the two countries, one close to the top of the economic wealth league in the Caribbean, the other close to the bottom. In Trinidad, the first response by the state was to go to the National Assembly and to make appropriate legislation. In Guyana, it was a resolution, of dubious legal force.

More than one year later, the Senate in Trinidad and Tobago is still grappling with the implications of the failure, and the Finance Minister and government senators remind the population that every time money is paid to Clico investors, it is coming from their taxes. In Guyana all the ruling politicians seem to care about is how soon the cheques will be ready. Of course at this stage, the Government of Guyana has not put a single cent into Clico and by a perverse coincidence, it can actually gain millions from capital gains taxes and withholding taxes on the interest paid on some of the so-called insurance policies.

I believe the contrasting responses are due in part to the fact that there exists in Trinidad some level of a political culture while in Guyana, there is none. And that the public is far more informed, savvy and courageous than its Guyana counterpart. Or it is because in Guyana elections are coming up while in Trinidad they have already had theirs. In Guyana, taking from the Treasury to which the whole country contributes to fund repayment of high-risk investments made by a relatively small number of persons is regarded as a sign of leadership to be admired and applauded. In Trinidad, they worry about the impact of the bailout on the economy, and while there is sympathy for the persons with life insurance policies and for those credit unions that had invested in Clico’s high-interest EFPA, the general feeling is that those who invested millions in those annuities did so out of pure greed and ought to have known the risk associated with a 7-8 % rate of interest when the market rate was 3-4%. The feeling is that the loss is a consequence of such risk-taking and should not be underwritten by the taxpayer.

Huge NIS loss
That sentiment should have equal validity in Guyana. In any country, persons deciding to invest tens of millions – and in the case of the NIS, billions of dollars – in a company should at least have had the good sense to ask for that company’s most recent audited financial statements. Rather than taking the word of the Clico’s directors and its salesmen whose only interest was huge commissions, they would have noted that Clico actually admitted in its 2007 financial statements, without quantification, that it was in “non-compliance” with section 55 of the Insurance Act requiring that 85% of its statutory fund be invested locally.

The NIS which has around seven and a half billion dollars invested in Clico has an Investment Committee on which sits one of the country’s senior accountants and one of its senior bankers. Should the workers or the taxpayers of this country suffer to the tune of those billions while those individuals are not even called upon to explain their poor judgment, if not outright negligence? This then raises the question whether the reluctance is due to the fact that the chain of responsibility might lead to the Finance Minister and the President and his cabinet who would have been involved, at some time, in the decision on the investment of those billions. No wonder that the powers that be are unwilling to comply with the NIS Act and make public the 2008 annual report of the NIS which, despite the statements of the Chamber of Commerce and FITUG has already lost tens of millions in interest alone on its Clico investments. In Guyana, there is no need to inform oneself before making high-sounding pronouncements or extending accolades.

The auditors
In my view it was also remiss of the auditors Deloitte and Touche not to have insisted that Clico quantify the extent of the non-compliance by the company with section 55 of the Insurance Act and not to have qualified their audit opinion in that regard, including noting in the audit report, the extent of the breach. Instead the auditors on April 23, 2008 gave a clean opinion on the 2007 financial statements, about ten months before the company collapsed. The only comment in their report is a statement under the heading ‘Report on Other Legal and Statutory Requirements’ to an unquantified statement tucked away in note 28 to the financial statements.

An equally or perhaps even more critical issue is that the auditors, by only dealing with section 55, is saying that the investment made by Clico is not impaired, which is clearly and dangerously wrong.

Unfortunately in Guyana this is passing without any comment from the accounting profession or any investigation by the accounting regulator, the Institute of Chartered Accountants of Guyana. This must surely be an issue for the liquidator, the Official Receiver or the President’s promised inquiry into the collapse of the company. And an issue too for those who may yet lose tens and hundreds of millions – and in the case of the NIS billions – of dollars of the capital invested in the company.

A unique country
Clearly then not only does Guyana have its own unique set of problems, but the need to protect the sacred cows takes precedence over accountability, while the long term is defined in terms of the electoral cycle, with the close of the current cycle merely one year from now. It was therefore important for the President to tell the policyholders that none of them will lose a cent, even if he did not say where the money will come from and equally significantly, does not appear to understand some of the implications of his own proposals. For example, at his National Cultural Centre meeting, the President included as a potential source of funds, the sale of a portfolio of policies. If that is indeed the intention – and that would not be a bad idea – any sale of what are effectively liabilities would have to be accompanied by matching assets which have long since evaporated across the Caribbean Sea. That approach does not provide funds but allows the continuity of the policy, though most likely on altered and less favourable terms.

Legal advice
In closing last week, I made bold to recommend to the Bank of Guyana that it should seek out the advice of the top legal brains in the country as it proceeds with the liquidation. I called for sober thinking and careful action, for it to avoid the attraction of pandering to irresponsible political leadership or endorsing false expectations. It may not be true that cheques are already being prepared in Camp Street, but for sure the Bank of Guyana has published an advertisement in the newspapers inviting policyholders to visit Clico Guyana’s office at 191 Camp Street, Georgetown on specific dates and to take along their policy contracts and a valid form of identification “to facilitate processing,” whatever that means.

Instead, under section 77 of the Insurance Act, the liquidator is required to give to the policyholder notice of the value of the policy as determined by the actuary and the policyholder has fourteen days to dispute the amount. That does not seem to be happening, and if it does not, it would breach the act under liquidation as it was under judicial management which specifically barred Ms Singh-Knight from any role in the judicial management.

As desirable as it might seem that everyone should get back their money, it is hardly open to the government or one of its most senior officials to be openly flouting the law. The government has the wherewithal to amend the law as it sees fit. Confronted with a similar kind of bailout, the US enacted several pieces of legislation including the Emergency Economic Stabilisation Act of 2008 under which the Troubled Assets Relief Programme (TARP) was created. Trinidad also passed special legislation to deal with Clico. Let us not engage in illegality and if we need to amend the law to achieve a desired objective, so let it be.

No role in liquidation
I will deal with the priority of payments later but for now, I continue to entertain fears about the course the liquidation process is taking. I called the Governor on a number of occasions this past week only to be told he was in a meeting/on the telephone. Unusually for him, he never returned my calls. I also called on the telephone, and am aware that a person called at the Office of the Commissioner of Insurance, seeking to inspect and to procure copies of documents deposited under the act, a right provided under section 150 of the Insurance Act.

The person was told that the Commissioner was busy on Clico and would not be able to meet with him for several weeks. Does the Commissioner not know that she has no role in Clico’s liquidation?

Statutory duties
Let us recall that Clico’s winding-up was ordered under Part V of the Companies Act 1991. There are some drafting problems apparent in the relevant provisions of the Insurance Act and the words ‘mutatis mutandis’ should surely have appeared in that act since the Companies Act does not deal with the unique insurance animal. But some things are clear and their breach constitutes an offence.

For example, before taking any action as liquidator, the person appointed is required to notify the Registrar of the appointment and give security in such manner as the court may direct; and must provide the Official Receiver with information, access to, and facilities for inspecting the books and documents of the company. There is nothing to indicate that this has been done.

It is not clear whether section 366 would apply in Clico’s case where a Judicial Manager had preceded the appointment of the liquidator. This section requires a statement of affairs to be prepared and submitted to the Official Receiver, containing some very detailed information on assets, liabilities, creditors, etc. After receiving this statement, the Official Receiver is required to submit a) a preliminary report to the court on the company’s capital; b) its estimated amount of assets and liabilities; c) if the company has failed, the causes of the failure; and d) whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company, or the conduct of the business thereof.

Generally, a statement of affairs is an absolute prerequisite in receiverships and liquidations and I do not see how or why it should be different in the case of an insurance company that was under judicial management. Indeed, the statement of affairs would seem to be a necessity if the judicial manager is to account for his/her stewardship.

The Official Receiver may also make further reports, stating among other things, whether in his opinion any fraud has been committed by any person in relation to the company since the formation thereof, and any other matters which in his opinion it is desirable to bring to the notice of the court.

Stop press
I have just learnt that the Chief Justice has amended the Order naming the Bank of Guyana as the liquidator of Clico and has instead named Mr Lawrence Williams, the Governor of the Bank. That amendment would seem to have been necessary to bring the order in line with the Companies Act which does not allow a corporate body to be a liquidator.

This is more than a change of form, and has important implications for the person appointed. It is a personal appointment and Mr Williams now assumes personal liability for his actions. Since it is a winding up by the court he must act strictly in accordance with the act. If he wants to appoint an attorney-at-law or other agent to assist him in the performance of his duties, he needs the sanction either of the court or of the committee of inspection provided for under Part V. He may, however, without special approval, appoint an agent to do any business which he is unable to do himself which would suggest those acts requiring exclusive skills which he does not have, such as customs brokerage. Since it is a personal appointment and his powers are conferred within the pillars of the act, Mr Williams will not be able to delegate any of those powers but must exercise them personally.

As Governor, Mr Williams did not seem too concerned about the statutory provisions that set the legal parameters within which the Bank of Guyana as liquidator had to operate. The advertisements for the sale of properties did not suggest that the Bank was au fait or concerned that such sale required that the properties be vested in the liquidator. With personal liability at stake, the need for care is greater.

Within days of this column’s assessment of pitfalls, abysses and craters littering the path of liquidation and my belief that the role of the Chief Justice (ag) in the winding up of Clico is far from over, have been borne out. Old people have a saying, ‘More haste, less speed.’ The new liquidator should take note.

Next week, I will look at Clico’s debts on liquidation and the statutory order of priority.

Liquidating Clico: Avoiding the pitfalls

Introduction
My notes of the meeting which President Bharrat Jagdeo held with policyholders of the failed insurance giant Clico Life & General Insurance Company (SA) Limited, or Clico, for short, quote him as saying that “Everybody will get back every cent of their money.” The meeting took place at the National Cultural Centre and provided the opportunity for the President to tell policyholders about his administration’s arrangements for them to recover the billions of dollars which they had all but written off following the collapse of the Guyana company about one month after the dramatic meltdown of the Trinidad and Tobago parent which sent a financial tsunami across the Caribbean Sea.

I believe that the President will come to regret the generosity of his boast. Liquidation is a long and winding road with pitfalls, abysses and craters along the way. It is a hugely technical task. There has never been a liquidation of this magnitude and this complexity ever undertaken in Guyana. It involves novel issues of both legalities and illegalities with the potential for adversarial challenges at almost every stage, particularly given the President’s apparent desire to treat the whole issue as a public relations stunt rather than a serious legal process. Troublingly, the President has signalled that he intends to control the process, an illegality which would be compounded if the Bank of Guyana as liquidator allows him to take charge.

Cheque writing
The initial evidence is not encouraging. Last Thursday, as the President was in full political flight, he turned to the Governor of the Bank of Guyana and enquired from him “when would the cheques be ready?” Uncomfortably, the Governor could do nothing but to indicate that he would work with the President’s time-frame. He too may regret those words.

A liquidator is not simply a cheque writer or some backroom clerk. He becomes a legal officer and his actions are subject to challenge and review by the court. His appointment is made under the Insurance Act 1998, but the liquidation is carried out under the provisions of the Companies Act 1991. As I will attempt to show, the winding-up provisions of the Companies Act are not only deficient at best, but do not cater for the specialist type of animal that insurance business is. That means that periodic recourse to the courts for guidance and direction may be necessary, as well as recourse to the archaic Insolvency Act which has in some cases over-lapping, and in other cases, conflicting provisions. We will get into a more detailed discussion on these later, but for now here are some immediate challenges to what the President has proposed.

Some initial challenges
Section 74 of the Insurance Act under Part XII – Intervention, Judicial Management and Winding Up provides as follows:

“In the case of an insurer which carries on both long-term and general insurance business:

a) the assets representing long-term insurance business funds shall be available only for meeting the liabilities of the insurer attributable to that insurance business; and

b) the other assets of the insurer shall be available only for meeting the liabilities of the insurer attributable to its other insurance business.”

What this says is no commingling, cook in separate pots.

And let us turn to section 77 of the same Act which provides in subsection (1) that “where an insurer is being wound up by or subject to the supervision of the Court or voluntarily, the value of a policy of any class or of a liability under a policy required to be valued in the winding up shall be determined by an actuary; and the liquidator, in the case of all persons appearing by the books of the company or association to be entitled to or interested in policies granted by the company or association, shall give notice of that value to such persons and in such a manner as the Court directs.”

The person to whom such a notice is given has two full weeks to dispute the amount so stated. There goes the Governor’s 2-3 weeks estimate.

An unholy mess
And here is where it really becomes both interesting and confusing. The court has ruled as “unauthorised, illegal and unenforceable” one of the principal debts owing by Clico to “policyholders,” that is some nine billion dollars in Executive Flexible Premium Annuities. Clearly, such debts do not fall under section 74 (a) or (b) and the question has to be resolved whether any money, however small or from whatever source, can be paid by the liquidator to any such “policyholder.” And lurking in the background is the Financial Institutions Act 1995 (FIA) which includes additional procedures that might be relevant to these transactions.

What we have here is an unholy mess created by Ms Gita Singh-Knight as CEO of Clico with her illegal transmission of funds to another Clico company; Ms Maria van Beek as Commissioner of Insurance and her poor oversight; the Bank of Guyana that failed to act in the face of the illegalities; and their political masters, the President and the Finance Minister. I believe the role of the Chief Justice (ag) in the winding up of Clico is far from over and he will have to call on all his immense legal talent and capacity for gruelling research to clean this stable called Clico.

Some help
But let us look back a bit. Less than one week before the meeting at the NCC, the Chief Justice had ordered that the Guyana company be wound up and that the Bank of Guyana be appointed the liquidator. It must be remembered that the Bank of Guyana had already been functioning as the Judicial Manager of the failed company, following an application by the then Commissioner of Insurance Maria van Beek, who later departed these shores after being shot in one of the still-to-be-solved crimes of recent times. Following that incident the Insurance Act was amended to place responsibility for the insurance sector within the Bank of Guyana which has been in control of Clico since then, incredibly with direct control being exercised by Ms Singh-Knight.

That role by the Bank of Guyana should certainly help the liquidation process since it would have been in possession of vital information about the state of the company’s finances and the demands which it, as liquidator, would be confronting. The ruling by the Chief Justice was instructive in that he addressed unequivocally the conduct by Clico which had led to its failure. The company through its attorney had gone to court in an effort to stem the liquidation process. The success of that strategy required it to establish that the statutory fund did not apply to the nine billion dollars it had received under Executive Flexible Premium Annuities.

Ring-fence
The Chief Justice found that it was not open to Clico to contend in the proceedings that it had been acting illegally in contravention of the FIA. He ruled that the company was estopped from contending that part of its business transactions (the Executive Flexible Premium Annuities) was not in the nature of insurance business and therefore “unauthorised, illegal and unenforceable.”

While we may boast of having ring-fenced the country’s financial sector, we certainly left a gaping hole through which billions were illegally sent out of the country. This ruling is a vindication of the position long since taken in these columns that the EFPA that were being issued Ponzi-style, were financial instruments and not insurance policies. It is unthinkable given the widespread marketing of these annuities that the Bank of Guyana was not aware that a major entity was issuing instruments in contravention of the FIA. It can hardly be to its credit to say in its defence that it was relying on the Commissioner of Insurance as the principal regulator for the insurance sector to do her work.

No wonder that the company and the government would not want the list of persons who were paid out in the company’s dying days to be made public. It would embarrass too may and dim the much vaunted gloss. But wait, section 150 of the act provides that every document deposited with the Commissioner of Insurance under the act shall be open to inspection and copies thereof may be procured by any person on payment of such fee as the Minister may direct. In my view, the fee payment applies only to making copies, not the inspection which is a matter of statutory right.

Globe Trust
This column will address the financial and legal implications of the major elements of the package announced by the President, but before I do so I think it would be useful to comment on some of the allegations and slanderous statements he made at his meeting about persons associated with another failed institution, Globe Trust and Investment Company Limited. The President would have appeared less uninformed had he sought from his legal officers the facts surrounding Globe Trust. In that matter, the Bank of Guyana had moved to liquidate the company without following the steps required by the law. The court ruled against the Bank, noting serious regulatory failures by that body over the operations of Globe Trust.

To save the institution in which many low income African-Guyanese had placed their life’s savings, the directors of the institution explored a number of options including government input to save the institution. Neither the Bank of Guyana nor the government supported such a move. Similarly the Bank of Guyana did not support a re-organisation plan which the directors had asked me to prepare. In other words not only was the Bank of Guyana derelict in its oversight duties in relation to Globe Trust, but from day one it seemed determined to shut down the poorly managed, undercapitalised, nascent financial institution.

Unfathomable
And when it finally got its way and an administrator and later a liquidator appointed, the Bank of Guyana did not support the issue to Globe Trust of a banking licence which would have made it a very attractive and valuable proposition. It is unfathomable why those who had the power to save the institution would not do so. It has been close to eight years since the Bank of Guyana has been in control of Globe Trust. During that time it has not faced a single challenge from anyone, even though then Chief Justice Carl Singh’s finding that the Bank of Guyana had been partly to blame for Globe Trust’s failure, provided a good cause of action. For the President to accuse anyone of being responsible for him not honouring his government’s commitment to pay the small depositors of the institution is complete nonsense and utter deception. Since he wants to appear generous to African Guyanese, let him keep his promise. Since he thinks I have the power or the influence to stop him, I publicly and seriously promise not to stand in his way.

The maligned directors
The President also gave the audience the impression that the directors of Globe Trust had taken money from the institution to buy shares in it. The President should not be so loose with the truth. Called upon to increase its capital base, some directors mortgaged their houses to provide security for a book entry transaction to increase the company’s share capital with the corresponding entry being a loan account. No money was paid to any of those directors. Rather, it was an act of blind faith, born of pressing need and demonstrative of exceptional selflessness by those persons in an effort to save the institution following the introduction of the FIA and its stringent rules about capital base.

The President once again promises an investigation into Globe Trust in which the government has not put a black cent. But he is linking it to an investigation into Clico into which billions of public dollars are being paid. We will wait and see whether that oft-made promise is a not too cleverly-disguised attempt to take the pressure off the government increasingly pressed to investigate Clico and bring to justice those who breached the laws and shipped billions of dollars of Guyanese funds including more than six billion dollars belonging to the workers of this country via the National Insurance Scheme, about which incidentally the President said practically nothing.

Next week: I will begin an analysis of the legal hurdles and financial challenges that the liquidator would have to overcome and the policyholders of Clico would have to accept. In the meanwhile I would strongly recommend to the Bank of Guyana that it seek out the advice of the top legal brains in the country. This is time for sober thinking and careful action. Not for pandering to irresponsible political leadership or endorsing false expectations.

The liquidator not the President should be meeting with policyholders

Today at the National Cultural Centre President Jagdeo will tell policyholders of Clico Guyana about his administration’s arrangements for them to recover the billions of dollars squandered by the failed insurance giant. This follows swiftly on the ruling last week by Ian Chang CJ (ag) that the company be liquidated.

The Chief Justice ruled that the Bank of Guyana be the liquidator. But President Jagdeo had promised that no policyholder would lose out on their investment, and he may be meeting them to say how the government will back his guarantee. That is the extent to which the government can go without frustrating the ruling of the court. In fact the President should be meeting with the Bank of Guyana in its capacity of liquidator and it is the liquidator that should be meeting with the policyholders.

The migration from judicial management to liquidation – two distinct insolvency regimes – involves a number of technical issues including the basis on which principles and statutory provisions of the former could be transplanted into the latter. But the President finds it irresistible to interfere and to try to benefit from the mess to which his administration made no small contribution. It would be the classic case of deus ex machina.

While the collapse of the company cannot be divorced from the demise of its Trinidadian parent, the directors of which are probably equally culpable, the taxpayers of this country will bear a huge cost as a result of the illegal transmission of US$34 million the local company shipped out to its sister company, Clico (Bahamas). It is one of the most costly corporate crimes ever to have been committed against the people of this country and in keeping with the principles of relevant law, it is the directors of the company including Ms Gita Singh-Knight and Mr Ramalho, who should be held culpable. And on top of this, all this took place while we boasted about the quality of the Insurance Act and the supervision by the Office of the Commissioner of Insurance.

We understand that Director Ramalho and his wife surrendered their policies to the tune of $45 million even as the Clico ship was fast sinking. He has denied receiving any money but the question remains whether he acted based on inside information.

As at February 28, 2009, the Guyana company had some $600 million in cash and other liquid assets – much lower than the $1.5 billion it received from the sale to the NBS of investments in the Berbice River Bridge Company Inc. Unfortunately the court did not comment on any person or persons who might have benefited from insider information by cashing in on their policies or those who might have colluded with them. My understanding is that several powerful persons with political connections would have been on the list of beneficiaries and that high political functionaries may have had a hand in the prioritization of the payments. In effect they were paid improperly in advance while the policyholders who will turn up at the National Cultural Centre this afternoon may be told they have to wait years for full, nominal recovery.

The court must have been aware that there had been a concerted cover-up of vital information. With the greatest of respect, I believe it missed a great opportunity to assert the rule of law, by not offering some comment on the selection of persons by CEO Ms Gita Singh-Knight for preferential payment when she must have known that collapse was imminent.

CLICO represents one of the worst acts of corporate misfeasance ever committed in this country. Yet, some of the people whose hands drip with culpability will probably be there this afternoon.

The question is whether today will simply be the end of this sordid affair or should we not follow the call by Government Senator Patrick Watson to the authorities in Trinidad and Tobago that those persons in CLICO in Trinidad responsible for milking thousands of unsuspecting investors of their money should be ‘jailed.’

Hopefully, policyholders will be allowed and will have the courage to ask President Jagdeo some challenging questions. Let us not forget that billions of dollars belonging to the NIS is involved, putting at risk the pensions of workers. It would be a sad day for Guyana and corporate governance would be rendered meaningless if today’s meeting closes the book on this affair.

The advertisement for the meeting mentions that only policyholders will be admitted and that persons would have to provide proof of identification. It is therefore likely that the press will be barred from the meeting.

The court has dealt with one aspect of this matter. A full and thorough investigation is now required to identify all who contributed to this expensive mess. The money to pay the policyholders belongs to the taxpayers. They should join the call.

The Amerindian Act 2006 has not yet been brought into force

A GINA release in early March 2008, reported that the Amerindian Act, 2006 passed on February 16, 2006 and assented to by the President on March 14, 2006 had “paved the way for Amerindians to empower themselves socially, economically and politically.” Further, and as a measure of its pride in the Act, the Ministry of Amerindian Affairs, under Ms Carolyn Rodrigues, expended considerable sums on the publication of user-friendly booklets for distribution to Amerindian communities. And as recently as August 19, 2010, PPP/C MP Norman Whittaker boasted that the PPP/C government had consistently followed the provisions of the 2006 Amerindian Act. When all things are considered, maybe Mr Whittaker was being more careful than anyone at that time thought.

The reason is that there is one small – to some significant – problem: Four years after its assent, the Act is yet to be brought into force. Effectively then, the 1951 Amerindian Act Cap: 29:01 described by Minister Rodrigues in 2005 as “outdated and not addressing the needs of Amerindian communities,” remains in force.

I find it hard to believe that this was any innocent oversight by the Amerindian-loving government, if there is such a thing. After all, for more than three years, there were three Amerindian MPs in the Cabinet. At every opportunity, whether it is in the “Cabinet Outreaches,” in the National Assembly, in national and international press conferences, and to the Norwegians, the government never ceased to showcase the Act as evidence of its respect for the rights of our indigenous peoples. Now it seems that all might be a deception, a sham and a façade, cynically disguised.

A possible reason why the Act has not been brought into force is that it creates an obligation on the Guyana Geology and Mines Commission (GGMC) to “transfer 20% of the royalties from mining activities to a fund designated by the Minister for the benefit of the Amerindian villages.”

The financial statements of the GGMC show that mining activities garnered more than eight and one half billion dollars since June 2006. The failure to bring the Act into force has, therefore, deprived Amerindian communities of approximately one point seven billion dollars ($1,700,000,000).

Maybe this is all innocent. Maybe it is a mere coincidence that during the same period, the GGMC has transferred one point eight billion dollars ($1,800,000,000) to NICIL.

This is Amerindian Month. It is a test of the sincerity of the government. The onus is on it to prove that it does not consider the Amerindians as naïve and gullible, ready to give up their legal right to $1.7 billion in return for a few outboard engines here, some chainsaws there, trips for its leaders to come to Georgetown to perform, or go on window-dressing trips to Norway.

This is a test too of the multiplicity of Amerindian organisations, politicians across parties and civil society activists. They should stand up and let the Amerindians know where they are on this latest blatant example of official deception. Silence is not an option.