"...A very high leveraging of the Group’s assets, which constrains the potential amount of cash that could be raised from the asset sales. In our regular monitoring of CIB (CLICO Investment Bank) and of CLICO since 2004 -when insurance supervision was transferred from the Ministry of Finance- the Central Bank has consistently focused on these deficiencies, but have (sic) been stymied by the inevitable challenge of change and by inadequacies in the legislative framework which do not give the (Central) Bank the authority to demand these changes.Stop one darn minute! A couple of questions needs must be asked:
The Central Bank is very conscious of the contagion risks that financial difficulties in an institution -as vast as the CL Financial Group- could have on the entire financial system of Trinidad and Tobago and, indeed, in the entire Caribbean region.
For the record, ladies and gentlemen, the CL Financial Group has an imposing presence, with potentially systemic consequences for the financial sector and the economy of Trinidad and Tobago and the entire region. For example:
- The Group controls over ($100) billion of assets in at least 28 companies located throughout the Region and the world.
- The Group’s financial interests cover several industry sectors including banking and financial services, energy, real estate and manufacturing and distribution. The four largest financial institutions in the Group manage assets of over $38 billion, over 25 percent of the country’s GDP..."
- Precisely whose interests does the Central Bank of Trinidad and Tobago seek? Asked because, if, for over four years, the Bank knew something was cooking and, when it spoke to them, the jefes at CL Financial weren't listening, why didn't the Bank go public with the information? Or, threaten so to do? Or, at least, forward some report to the Parliament about it? After all, "...The Central Bank is very conscious of the contagion risks that financial difficulties in an institution -as vast as the CL Financial Group- could have on the entire financial system of Trinidad and Tobago and, indeed, in the entire Caribbean region..."?
- How come one company -and a privately-owned one at that- has been allowed to own such a huge chunk of Trinidad and Tobago? Asked in rhetoric, really, because one recalls that André Monteil was -till March last year- CL Financial’s Executive Director, Group Financial Director and Chairman of CLICO Investment Bank. Oh yes! Also Treasurer of the People's National Movement! Maybe that's why nothing was done?
- What ties exist -even if tenuously- to link this turn of events does the recent statement by Information Minister, Neil Parsanlal, that the Trinidad and Tobago government intends to consolidate all its media operations in one place? Asked because, as a consequence of the announced "bailout", "the government", through state-owned First Citizens' Bank would become the owner of the bailed out companies, one of which -CLICO- owns one quarter -over fifteen million shares- of the largest Caribbean media conglomerate -One Caribbean Media Limited. In highlighting the salient areas that "...The Group’s financial interests cover..", The Guv neglected to mention that, even though the Trinidad and Tobago Stock Exchange reports indicate that this single investment is worth -as at December 31st 2008- more than a quarter billion dollars!
- Ought not the taxpayer to be made aware of the names of those who shall benefit from the taxpayers' rescue efforts? Asked because it's the taxpayers' money that's now going to be used to "bailout" CL Financial Holdings. Also, because it would be a shame if high-wheeling risk-takers -who could more than afford to take a hit- pepper that list.