Did finance minister break T&T law to withdraw $$?

The CL Financial bailout and the connections with Finance Minister Karen Nunez-Tesheira is the latest albatross around the neck of the Manning administration in Trinidad & Tobago as new questions come up almost daily about the minister's transactions with the company in which she owns more than 10,000 shares valued at millions of dollars.

The latest issue is whether she legally cashed in two US-dollar fixed deposits at Clico Investment Bank (CIB).

Under Section 17, subsection 13 of the Financial Institutions Act (FIA) 2008 that came into effect in December, a bank "shall not repay any deposit" under a term of one year without the expressed approval of the Central Bank.

The question that arises now is whether she had approval from the Central Bank and under what circumstances the bank acted to give its approval.

A report in the Sunday Express said a source close to the CIB decision said there was no breach in the minister's case because the subsection of the law applies to new accounts under one year and her combined deposits of US$48,549.91 were treated as old accounts over the stipulated one-year period.

But the paper said it talked to a legal expert who disputed that view, insisting that once the accounts were rolled over and CIB had issued a new certificate of deposit, the accounts had to be treated as new and should have been subjected to the legal requirement under subsection 13 for Central Bank approval.

The Sunday Express said its investigations confirmed that CIB made no request for Central Bank approval, as required by the FIA, which states in part that a person licensed under the act shall not "without the written permission of the Central Bank repay any deposit within less than one year from the date on which the deposit was received by the licensee".

The paper said, "Bank transaction documents related to the Minister's two controversial CIB deposits...show Minister Nunez-Tesheira making a written request to CIB under the heading, "Fixed Deposit Break Request", for an early cash-out of the two deposits, despite a penalty which cost her a substantial loss of interest payments.

"Instead of the 6.50 per cent interest contract rate agreed to on the two US dollar fixed deposits, Nunez-Tesheira received a break rate of interest of 3.50 per cent on the two accounts, which was described by financial sources as the penalty for not taking the deposits to the full one-year term."

Former finance minister Selby Wilson has joined the chorus of voices demanding the minister's resignation, saying Nunez-Tesheria's credibility has been put in serious doubt. "Her veracity cannot be trusted," he told the Express.

The paper said the Minister's personal assistant, Beverly Foster, has advised that Nunez-Tesheira would respond to "all of the issues raised about her handling of CL's bailout" on her return home Monday. She is on official government business in the United States.