Clico policyholders want 40 per cent of funds now

Members of the CLICO Policyholders Group have rejected outright the government's offer of $75,000 with outstanding balances to be paid over 20 years in equal instalments with zero per cent interest.

Instead they are demanding an immediate 40 per cent on their deposits, with any balance to be paid in quarterly instalments over five to seven years at between four and four and a half per cent interest.

That's the message delivered by deputy chairman for the group Peter Permell to stakeholders who attended a meeting Sunday at Woodford Square.

Permell said it's one of two proposals handed to the government inter ministerial team headed by Food Production Minister Vasant Bharath. "The 'Dookeran plan' of zero interest over 20 years is off the table," Permell said. "We not accepting any $75,000," he declared.

He said the government's counter proposal is for those depositors with up to $75,000 investment, credit unions and trade unions be paid 100 per cent, since they represented the "small people" who pooled their money to make up the investments.

The proposal was made for the Executive Flexible Preferred Annuity (EFPA) and mutual fund policyholders, and excluded Clico Investment Bank (CIB), the Government, State enterprises or private corporations, he said.

Permell suggested that a "warranty" should be placed on the bonds that would stakeholders to cash in on any profits from the sale of the CL Financial assets, to be shared based on a 51:49 per cent ratio with government having the majority amount.

Executive member Prem Beharry outlined the second proposal, which gives the US$600 million the Government has allocated to pay the investors to an American Asset Liabilities Management company that will invest the funds to ensure the most profitable pay-outs and turn over the cash within a 20-year period.

"They will take the US$600 million and convert it into U.S. treasury bills, which are triple A-rated and gives a fairly aggressive returns," Beharry said.

He said the company - Ryan ALM - will manage the money so that during the course of 20 years the value of assets will be equal to $1.8 billion. He said Ryan ALM proposed that within three months it could sell the bonds and get US$1.8 billion to pay all the policyholders.