PP gov't to pass law to prevent legal action in CL matter

Government's Central Bank Amendment Bill to be presented in Parliament Friday will prevent anyone from taking legal action against the Clico bailout plan, without the written consent of the Central Bank.

Former Attorney General Ramesh Lawrence Maharaj, who represents a group of Clico investors has threatened legal action if the government refuses to ament its plan. 

He has argued that the state is legally obliged to pay investors based on the agreement that Clico's parent company - CL Financial - signed with the government of Trinidad and Tobago last year.

The Manning administration made that deal when CL boss at the time., Lawrence Duprey, sought government assistance for the conglomerate, which had become insolvent.
 
The People's Partnership inherited the problem and is offering some relief for persons whose money is tied up in Clico.

They plan announced in the budget is for each investor to get up to $75,000 in cash with any outstanding balance to be paid over 20 years in equal IOUs with no interest. There has been widespread condemnation of that plan from people who have more than $75,000 invested in Clico.

However the government is firm in its decision and has stated that it is standing on firm legal ground.


Read related story: PM Kamla: We stand by Clico decision, insists plan is legal

The bill needs that special majority because some clauses in the draft legislation relate to the right of the individual to the enjoyment of property, to equality of treatment before the law and to equality of treatment from any public authority.
 
The government has the three-fifth majority needed to pass the bill in the House of representatives but will need support from some non-government members in the Senate.

The bill provides allows the government to grant financial assistance from the Government, the Central Bank or "any other body approved by the Government or the bank to an institution where such assistance is deemed necessary to reduce a serious threat to the stability of the financial systems of Trinidad and Tobago".

It states the the "quantum, terms and conditions of the "past, present or future financial assistance" would be approved or ratified by Parliament, by Resolution".

The bill also gives the Attorney General the power to "institute, undertake, take over or continue any non-criminal proceedings in order to enforce a claim belonging to the State or any person, authority or institution for any fraud, dishonesty, fraudulent trading, negligence, malfeasance, breach of a statutory duty or other improper conduct arising out of the circumstances that resulted in the serious threat to the stablility of the financial systems of Trinidad and Tobago."

And it will provide for the appointment of a chief restructuring officer (CRO) in respect of an affiliate of an institution that is granted financial assistance under this legislation. Such an officer would be nominated by the Attorney General.

The CRO would be able to liquidate property and other assets to repay the Government and will be paid from the money raised through disposing of assets.