Don't blame us for HCU problems: Finance Minister

Finance Minister Karen Nunez-Tesheira blamed the Hindu Credit Union (HCU) Friday for causing its own collapse, stating that the organization frustrated government's attempt to work out a bailout arrangement with it.

The minister made the comment in a debate in the House of representatives on an opposition motion calling on the government to help the credit union that was put into liquidation by the commissioner of credit unions in 2008.

She said on two occasions government tried to buy property from the HCU but was unable to conclude the transactions because there were liens on the properties.

Nunez-Tesheira directly addressed her comment to HCU members who were in Parliament's public gallery. "I want the persons who are sitting in the gallery to understand Government bent over backward to help."

Referring to the UNC, the minister said, "They want you to think that we did not care."

She claimed that when the HCU went to government to seek assistance in April, 2008, the key players asked for $71 million. The government decided to help by offering to buy one of the HCU's properties in Chaguanas, she said.

Nunez-Tesheira added that government held discussions with the Urban Development Corporation of Trinidad and Tobago (UDeCOTT) about buying the "Towers" but ran into legal problems, so it decided to buy another HCU property at Calcutta Settlement in Freeport.

That one was also not free, she said, adding that "Not only that but the valuation report that they indicated to us was done by a firm that the Central Bank used, when we checked with the Central Bank, we found out that it was not true. What is the Government to do?" she asked.

She said when Ernst and Young investigated the HCU it concluded that there were serious irregularities and the organization did not have any liquidity. She ommited the fact that the commissioner of credit unions had found problems long before that and had failed to act.

However she insisted that it is "absolutely untrue" to give the impression to the HCU members "that the Government just sat back and did nothing."

The minister again defended government's bailout of CL Financial stating that the risk which a CL Financial collapse posed to the rest of the economy was a critical factor. She added that the state's intervention was to prevent the problem of CL Financial from spreading to other financial institutions.

She said such a development would have put the whole financial system at risk since CL Financial Group controlled over US$100 billion in assets and had financial interest in several banking, real estate, energy, general and life insurance, manufacturing, retail, distributive, media and medical services.

CLICO, she noted, controlled 52 per cent of the insurance industry, owned 55 per cent of the largest bank and 49 per cent of the total assets of the non-banking sector.