Relief for CL, HCU depositors

Winston Dookeran slammed the previous Manning PNM administration Wednesday for what he called a "colossal mistake" in its handling of the CL Financial collapse that has affected the Trinidad and Tobago economy and the lives of tens of thousands of citizens.

The finance minister was presenting the first budget of the People's Partnership in the House of Representatives.

Dookeran also announced measures to bring relief to CL clients and also to people affected by the closure of the Hindu Credit Union (HCU), which the previous government put into receivership.

In both instances he said those who are responsible for the "recklessness" must be held accountable. And he said the government will ensure that laws are strengthened to protect investors and to make sure that this never happens again.

With respect to CL, the minister said government investment in the failed conglomerate has reached $7.3 billion by June this year. The liabilities stood at $23.3 billion, he said, with assets valued at $16 billion.

Dookeran said based on the best expert advise, the government has decided on certain measures to deal with the CL problem. These include:

• Separation of the insurance business from the rest of CL and honouring commitments to policy holders
• Merging and divesting the rest of the assets
• Providing payment of up to $75,000 to short term investors
• Provide IOU's to those with over $75,000 to be paid over 20 years at zero per cent interest. These IOU's could be traded to provide liquidity

The bailout for CL will cost taxpayers $1.5 billion over four years, Dookeran stated. he added that it will bring relief to about 225,000 people.

The government will provide similar relief for the thousands of people affected by the closure of the HCU. Dookeran said while the economic impact of the HCU collapse has not been as significant as the CL matter, the government has decided on relief measures in the interest of equity and fairness.

The measures, which will cost $300 million and benefit about 160,000 people, will include payment of up to $75,000 based the country's deposit insurance regulations. Any amount over that figure would be paid in equal instalments over 20 years at zero per cent interest.