Speaking in Parliament in defence of her government's plan to help out people affected by the financial problems at both organisations she pointed to the CL matter and accused the Manning PNM government of spending billions of dollars for a minority shareholding in a “bankrupt” company.
“All the taxpayers have to show is a minority interest of 49 per cent in a bankrupt company,” she said, adding “this is a scandal of monumental proportions”.
Manning had refused to consider any kind of financial bailout for HCU.
Persad-Bissessar said her government's decision to intervene and pay money to some of those worst hit by the financial was done to prevent the collapse of the Trinidad and Tobago economy.
Under the plan for CLICO, investors will get back $75,000 in cash and any outstanding balance in equal IOUs over a 20-year period with no interest. There will be a similar arrangement for the HCU investors and depositors.
Persad-Bissessar told MPs the Commission would inquire into both CL and HCU.
“The Commission will investigate the files of CLICO, British American Insurance and CLICO Investment Bank as well the overall CL Financial Group and HCU," she said.
“This Commission will be conducted in addition to the investigations that have already been conducted by forensic investigators and I am advised that the results of these forensic investigations have been sent to the DPP (Director of Public Prosecutions) by the Office of the Attorney General.”
The Prime Minister said the root causes of the financial collapse of CLICO “must be fully ventilated” and the persons deemed responsible “must be held accountable.
“Mr. Speaker we are not guessing or groping in the dark or acting blindly nor are we throwing away money arbitrarily,” she said, adding “that in recognition of the difficulties and the problems faced by investors and shareholders of CL Financial and HCU this government made an offer guided by the state of our finances at this time”.
She assured the national community “that we will do everything we can to protect the interest of the people of Trinidad and Tobago while at the same time we will ensure that justice is done”.
The Prime Minister explained that CLICO is a private enterprise and that the government is under no “legal obligation to spend additional tax payer funds related to this crisis.
“What we are saying we have no legal obligation to take more taxpayers dollars to try to help those who have found themselves in this position who have been placed into this position because of mismanagement on the part of the former administration and of course mismanagement by the companies themselves."
The Prime Minister also said that that under the old agreement between CLICO and the Manning government, a number of persons were excluded and that no one knew the criteria used to pay depositors and policy holders.
She stated that the Manning government had spent more than seven billion TT dollars (US$1.1 billion) since 2009 for a 49 per cent interest in the company and that under the agreement between the state and CL some of CL's assets would be sold.
“Yet 20 months since the intervention by the previous administration there has been no sale of assets. So the government kept putting their money, dumping their money into their hands, had an MOU in which they could have started to look for sale…7.3 billion dollars down the drain and not a single thing or a finger was lifted to deal with this crisis," she told the House of Representatives.
“Good money behind bad money,” she said, adding that the vast majority of CL Financial assets are held as collateral by lenders and the agreement “entered into does not appear to provide sufficient legal basis to force the execution of those sales".
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