Trinidad and Tobago government to sell CLICO

Port of Spain, Trinidad — Trinidad and Tobago’s minister of finance, Larry Howai, has confirmed that Colonial Life Insurance Co Ltd (CLICO) is to be sold.

He stressed however that the price must be right.

Speaking at the meeting of the Standing Finance Committee of the House of Representatives, Howai also revealed that the government would be paying out before the end of this year $258 million to several Eastern Caribbean states for managing the costs involved in the CLICO fallout. The House was going through the expenditure in the Ministry of Finance allocation of $9.4 billion in the 2014/15 budget.

“We expect that we would be disposing of the portfolio by way of a portfolio sale,” Howai said.

Asked by MP Colm Imbert why, Howai said the government would have had to invest $1.5 billion more to purchase the assets of CLICO and to capitalise the company under the new insurance regime.

“So you winding up CLICO?” Imbert asked.

“Yes… The intention is to sell. It depends on whether we get the price that we are looking for. If we do not get the prices we are looking for… then it would have to continue to operate under Section 44,” Howai replied.

Asked by Imbert what would happen to the staff, the buildings, etc, Howai said there was no staff.

Howai said the government was in the process of getting the valuations done and was also in the process of hiring an investment bank to advise it on how to proceed, once the valuation comes in.

Howai also confirmed that government paid $258 million to the Organisation of Eastern Caribbean States (OECS) in relation to the CLICO collapse. Howai said this money was a grant, not a loan.

Asked by opposition leader Dr Keith Rowley whether there were any assets of CLICO in these countries that could have been taken, Howai said attempts were made to realise the assets of CLICO but very few of those assets were domiciled in the Eastern Caribbean states.

“So the net effect of what could have been realised would have been very minimal,” he said, adding that the government did not ask for any additional assets to be assigned to Trinidad and Tobago.

Howai said, however, that there had been constraints on the Trinidad and Tobago banks owning or acquiring banks in the OECS. He said as a condition of disbursement (of the $268 million), the government asked those countries to remove these restrictions and also asked those countries to put mechanisms in place to strengthen their regulatory environment so there is no repeat of the CLICO debacle.

Howai also confirmed that $150 million was paid by his ministry for legal counsel and other advisory services.

He said most of this money was paid for the CLICO/HCU enquiry.