Prime Minister Kamla Persad-Bissessar told reporters Wednesday her People's partnership government will stand by its decision on the bailout for Clico depositors and insisted that the plan is legally sound.
Persad-Bissessar made the point at a media briefing at Piarco International Airport shortly after her return home from an official visit to New York where he addressed the General Assembly of the UN and attended several high-level international meetings.
The plan announced in the budget earlier this month will offer a maximum of $75,000 to each Clico investor. Anyone who has more than that will get the balance in equal instalments at no interest over 20 years. A bill to put the plan in effect is expected to go to Parliament on Friday.
The government announced a similar plan for depositors of the Hindu Credit Union (HCU), which was put into receivership during the Manning administration. HCU members are happy with the plan. However the Clico arrangement has drawn sharp criticism from various sources, including investors and the opposition.
Former Attorney General Ramesh L. Maharaj is representing one group that is claiming that the government action is illegal. He has threatened to go to court if the government doesn't change the plan.
"The Government has to back down or they will be forced to back down. The Minister of Finance is making statements he is not legally competent to make," Maharaj told stakeholders Sunday.
He also warned that if the Central Bank fails to act it could become "personally liable" for the money.
But Persad-Bissessar is not bothered with the threat. She told journalists that she is confident that the government is standing on firm legal grounds, a point also made by her Attorney General, Anand Ramlogan.
The AG told reporters Tuesday, "We have been careful about the deliberations and it is well within the law. Mr Maharaj is entitled to seek clients and represent them," Ramlogan said.
He also stated that the investigations into CL are completed and that the relevant files have been sent to the DPP.
Read the story: Clico probe completed, files sent to DPP: AG Ramlogan
Persad Bissessar reiterated that the government inherited the CL problem from the Manning administration and chose the best of three possible plans to deal with it.
She said Clico investors can decide for themselves if they want to accept the government's offer or not. She made it clear that in developing the plan her government had to act in a fiscally responsible manner since the money to pay the individuals is coming from taxpayers.
She said Clico investors can decide for themselves if they want to accept the government's offer or not. She made it clear that in developing the plan her government had to act in a fiscally responsible manner since the money to pay the individuals is coming from taxpayers.
"I want to warn that while it is that we would be seeking to help all those we can, these monies are monies that belong to you.
"They are taxpayers' dollars that you paid. They are dollars that we could use to pay for hospital beds, to build schools, to provide laptops, that's the money that we have been asked to lift it out of the treasury and give it.
"Indeed, it's no longer, with due respect, the money of those persons who have made the deposits. Those monies were lost and fritted away by Clico and CL Financial and so on," Persad-Bissessar said.
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