The law firm of Ramesh Lawrence Maharaj and Company has written Central Bank Governor, Ewart Williams on behalf of the CLICO Policyholders Protection Association, advising Williams that policholders will not accept government's decision regarding the payment of CLICO depositors.
The letter dated September 23 is in connection with the People's Partnership government's decision to pay CLICO depositors a maximum of $75,000, with any other balances to be paid through government IOUs amortised over 20 years with no interest.
The group is of the view that the move by Finance Minister Winston Dookeran is illegal and that it contravenes the legislation that grants the Central Bank sole authority over CLICO.
It adds that the policy is ineffective and calls on Williams "to confirm that no decision has yet been made on this matter by the Central Bank and that the Central Bank will not abide by, or implement, or in any countenance this "decision" by the Government and/or the Minister of Finance.
"We ask that you respond affirmatively within seven days of receipt of this letter by fax. Your refusal to respond will be taken to amount to a failure to confirm as requested and surrender by the Central Bank to the government and/or the Minister of Finance of its functions and powers under the Act."
The letter also states that the government made its decision without consultation with policyholders, and that if it implements the policy it would result "in the deprivation of property to the policy holders since monies owned by individuals constitute property for the purpose of Section 4 (a) of the Constitution of the Republic of Trinidad and Tobago."
The section cited guarantees the right of an individual to the enjoyment of property and to the right "not to be deprived thereof except by due process of law".
The letter states that in the circumstances of the facts relating to Clico policyholders the government could not have lawfully altered the existing policy relating to the protection of property rights and interests "without adhering to the principles of due process of law".
"The policyholders were not informed of any proposed change of policy and were not given an opportunity to comment upon the proposed change of policy," the letter adds.
The letter refers to the Memorandum of Understanding between CL Financial and the Government of Trinidad and Tobago, noting that the central Bank Act was amended to give the Bank emergency powers to "take all steps it considers necessary to protect the interests and preserve the rights of policyholders and creditors of Clico."
In these circumstances, the letter states that "The Minister of Finance or the Government cannot exercise a power which he or it does not have". It states further that the Bank has a legal obligation to find alternative means of protecting the policyholders, which would include the liquidation of certain Clico assets.
The letter advises that if the Central bank follows the new policy on Clico it would be "abdicating its statutory responsibility...and surrendering its statutory powers and statutory discretion" contrary to the principles of public law and would be struck down by the courts".
Read the Sunday Guardian editorial: More discussions on CLICO necessary
The letter dated September 23 is in connection with the People's Partnership government's decision to pay CLICO depositors a maximum of $75,000, with any other balances to be paid through government IOUs amortised over 20 years with no interest.
The group is of the view that the move by Finance Minister Winston Dookeran is illegal and that it contravenes the legislation that grants the Central Bank sole authority over CLICO.
It adds that the policy is ineffective and calls on Williams "to confirm that no decision has yet been made on this matter by the Central Bank and that the Central Bank will not abide by, or implement, or in any countenance this "decision" by the Government and/or the Minister of Finance.
"We ask that you respond affirmatively within seven days of receipt of this letter by fax. Your refusal to respond will be taken to amount to a failure to confirm as requested and surrender by the Central Bank to the government and/or the Minister of Finance of its functions and powers under the Act."
The letter also states that the government made its decision without consultation with policyholders, and that if it implements the policy it would result "in the deprivation of property to the policy holders since monies owned by individuals constitute property for the purpose of Section 4 (a) of the Constitution of the Republic of Trinidad and Tobago."
The section cited guarantees the right of an individual to the enjoyment of property and to the right "not to be deprived thereof except by due process of law".
The letter states that in the circumstances of the facts relating to Clico policyholders the government could not have lawfully altered the existing policy relating to the protection of property rights and interests "without adhering to the principles of due process of law".
"The policyholders were not informed of any proposed change of policy and were not given an opportunity to comment upon the proposed change of policy," the letter adds.
The letter refers to the Memorandum of Understanding between CL Financial and the Government of Trinidad and Tobago, noting that the central Bank Act was amended to give the Bank emergency powers to "take all steps it considers necessary to protect the interests and preserve the rights of policyholders and creditors of Clico."
In these circumstances, the letter states that "The Minister of Finance or the Government cannot exercise a power which he or it does not have". It states further that the Bank has a legal obligation to find alternative means of protecting the policyholders, which would include the liquidation of certain Clico assets.
The letter advises that if the Central bank follows the new policy on Clico it would be "abdicating its statutory responsibility...and surrendering its statutory powers and statutory discretion" contrary to the principles of public law and would be struck down by the courts".
Read the Sunday Guardian editorial: More discussions on CLICO necessary
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