A Senior Manager and Partner at the accounting firm Ernst and Young said on Monday the firm could not find documents to account for several business transactions that were managed or directed by Senior Managers at Colonial Life Insurance Company (Clico).
Maria Daniel was giving evidence at the Commission of Enquiry into the collapse of CL Financial, British American Insurance Limited and the Hindu Credit Union.
She said it was difficult to clarify the transactions because payment documentation was not always available.
The Central Bank retained Ernst and Young to investigate Clico Investment Bank (CIB) and British American Insurance Company.
Daniel gave a graphic power-point account of Clico's spending to show how the company moved money around within its subsidiary companies.
She highlighted some discrepancies in the group's financial system, noting that audit adjustments were never posted.
Maria Daniel was giving evidence at the Commission of Enquiry into the collapse of CL Financial, British American Insurance Limited and the Hindu Credit Union.
She said it was difficult to clarify the transactions because payment documentation was not always available.
The Central Bank retained Ernst and Young to investigate Clico Investment Bank (CIB) and British American Insurance Company.
Daniel gave a graphic power-point account of Clico's spending to show how the company moved money around within its subsidiary companies.
She highlighted some discrepancies in the group's financial system, noting that audit adjustments were never posted.
In addition she said documentation for accounting entries were maintained in various locations in the CIB and there were no accounts showing how long large amounts of receivables had been owing.
Daniel told the commission her firm estimated Clico's net assets at just under $1 billion. However, after adjustments were made, she said the firm found the figure to be closer to $4 billion.
She said the experts arrived at the figure by looking at the top 20 loans that were assessed, based on the security, the nature of the loan, how recoverable it was and the "saleable" value on the loans.
Daniel said group transactions were transferred to satisfy Clico's Statutory Fund requirements and the Group used CIB's assets to guarantee third party funding.
She said liquidity challenges created caused a shortage of funds for loan disbursements, which strained the company's loan portfolio and financing for the completion of projects.
Daniel told the commission her firm estimated Clico's net assets at just under $1 billion. However, after adjustments were made, she said the firm found the figure to be closer to $4 billion.
She said the experts arrived at the figure by looking at the top 20 loans that were assessed, based on the security, the nature of the loan, how recoverable it was and the "saleable" value on the loans.
Daniel said group transactions were transferred to satisfy Clico's Statutory Fund requirements and the Group used CIB's assets to guarantee third party funding.
She said liquidity challenges created caused a shortage of funds for loan disbursements, which strained the company's loan portfolio and financing for the completion of projects.
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