Clico could be sold or become or become a separate entity: Dookeran

Finance Minister Winston Dookeran said Wednesday he expects that by the first-quarter of 2011 the Board of Directors will recommend a way forward for a new Clico.

Dookeran made the point at a news conference at the signing of an investment agreement between Guardian Holdings Limited (GHL) and the International Finance Corporation (IFC) at Hyatt Regency hotel in Port-of-Spain.


The deal involving GHL and the IFC, a member of the World Bank Group, will see investment of TT$472 million (US$75 million) in the common equity of the group at a price of $16 per share.

GHL said the investment is a signal to the outside world that the company is reliable from a corporate governance, risk management and investment standpoint.  

Speaking about the Clico matter Dookeran suggested that the company may become as an independent entity, offered for sale, or be merged with a strong financial partner. “We will ensure that the public’s interest will always be paramount in the decision making,” he stated.

“I have had the opportunity to meet Goldman Sachs, Morgan Stanley and Citi Group who have all expressed their desire in working together, given the fact that they have a growing confidence in the economy,” he said.

He said Government has sought to remove decisively the systemic and solvency risk Clico represented to the economy.

“Unlike bailout packages recently announced in Europe which have addressed and focused on liquidity concerns, and have not solved solvency issues, the offer by this Government to the short-term depositors of Clico balances the debt situation, the fiscal challenges and our commitment to protect the capital of deposit holders,” Dookeran said.

He government's “mature approach” with respect to the Clico situation remains the most fiscally responsible and viable approach.

Dookeran said he expects Government will begin offering payments to short-term policy holders of approximately 14,000 who are owed $75,000 and below, before the end of this year.

“In the new year, as we continue the audit and verification process, we will begin offering payments to those who are owed in excess of $75,000," he added.

Dookeran also made the point that the traditional policy holders "like life, health and pension contracts representing some 250,000 persons are backed by a 

Statutory Fund that will be in full compliance with TT’s regulatory requirements."