PORT OF SPAIN, Trinidad--The Trinidad and Tobago Government has gone to the law courts to recover more than TT $23 billion (US $3.4 billion) it invested to bail out collapsed insurance giant CL Financial.
It petitioned the High Court on Tuesday to have the company liquidated.
Finance Minister Colm Imbert said the move was in the country’s best interest, disclosing that attempts were afoot by the company’s stakeholders to take control of the board.
“Being the custodian of public money and [given that – Ed.] so much of the public money has gone into this arrangement, we felt we had no choice as Government but to seek to protect the public purse, to protect taxpayers’ fund and to make this application for CL Financial to be put into liquidation,” he said.
Speaking at Thursday’s post-Cabinet news conference, Imbert revealed that Government had only recovered about TT $7.5 billion (US $1.1 billion) while it had put in at least TT $23 billion (US $3.4 billion).
According to Imbert, the bailout was supposed to have been completed after three years, and the assets of CL Financial and its subsidiary CLICO should have been disposed of by 2012 in order to repay Government.
Imbert expressed concern that there was “reluctance on the part of the other shareholders to continue the original agreement and to sign another extension to the shareholders’ agreement.”
Under the original agreement, Government holds the majority stake in the board, CL Financial has four directors, and there are three directors from United Shareholders Limited, which represents all other shareholders.
Imbert told reporters that the CL Financial shareholders have called for a special meeting of shareholders, which is set for July 26, where they will make a case to have two additional members on the board, effectively giving them control.
“The other side asked for a special meeting of shareholders to add two of their people to the board, which would bring their membership up to five, against the Government’s four, effectively causing the Government to lose control of the board and of the companies. And we could not sit idly by,” he said.
He, however, assured the public that Government was not out to shut down CLICO, which remains under the control and management of the Central Bank.
“CLICO policyholders can be assured that the management of CLICO remains under the control of Central Bank,” he said, reiterating that the legal action being taken by Government did not affect CLICO. ~ Caribbean360 ~