Government won't help HCU; Harry going to court

Harry Harinarine is pulling out all the stops in a bid to stop the demise of the Hindu Credit Union (HCU). And on Thursday he went to the very top to try to meet Prime Minister Patrick Manning at Manning's constituency office in San Fernando.

The Hindu Credit Union president was just another person on the list of people who wanted to see their MP.

He told the Trinidad Express he delivered a letter to Manning on behalf of HCU members asking the government to hold off on liquidating the assets of the organization. Harnarine said the letter outlines an offer by HCU shareholders to buy the assets of the credit union.

On Tuesday, Harnarine sent a letter to the labour minister challenging the decision by Commissioner of Co-operatives Charles Mitchell to declare the HCU insolvent and order the liquidation of its assets.

Minister Rennie Dumas has not responded to Harinarine's letter.

But he told reporters on Thursday there is a major difference between his role and that of the Government in this matter. He said there are two separate issues. On the one hand the law is clear about the procedures for dealing with the problems encountered by the HCU. and on the other there is a separate issue of "a matter in which some members have asked for relief".

The minister's cabinet colleague, Junior Finance Minister Mariano Browne, went further.

He told reporters there is too little information on the operations of the financial institution to justify a government intervention at this time.

And he made it clear that based on that the government cannot consider an appeal by the Credit Union Members Group (CRMG) for $300 million dollars in loans to save the organization.

"In the absence of any information, and there is a requirement on our part and prudence requires that the court process be followed so we could have full and fair disclosure in terms of what is at risk before any decision is made, and to say and to make any decision at this stage of the game would be very premature," Browne said.

He rejected the idea that Government could bail out for the HCU in the same way that the U.S. government stepped in with a multi-billion dollar package to rescue insurance giant AIG.

Browne said the circumstances of HCU and AIG "are completely different".

He explained that "AIG is important to the full structure of the American banking sector insofar as it may have issued a number of risk guarantees and, therefore, if AIG were to fail then you would also have a ripple effect throughout the entire banking structure, and on that basis AIG needed to be rescued."

The CRMG's appeal is based on the premise that if the liquidation goes ahead, tens of thousands of citizens would lose most, if not all, of their savings and they would face a financial catastrophe.

A forensic estimate supports that view. It shows that when assets and liabilities are balanced the HCU would have a deficit of $487 million. And with depositors and shareholders last in the line for payment, there is very little hope that they would recover their investments.

With government standing firm on its refusal to help, Harnarine's options are running out. He now plans to go to court to prevent Mitchell from selling off the HCU's assets.