A judge in Port of Spain on Tuesday ordered Clico Investment Bank (CIB) to repay a TT$700 million to the National Insurance Board (NIB).
NIB had asked the court to make a ruling on whether the deposit in the form of an Investment Note Certificate (INC) is guaranteed under the January 2009 Government bailout of the CL Financial Group, which included CIB.
Justice Peter Rajkumar ruled that the INC was a deposit. Lawyers for CIB had argued that it was a security.
The ruling means that the money will have to be refunded with interest to the National Insurance Board (NIB).
NIB will continue to earn statutory interest on the money, starting from Tuesday, at the rate of 12 per cent on what is due.
Between January 2009 and January 2011, the interest on the deposits would be in the range of $84 million, bringing the total with interest up to January 2011 to around $789 million.
Senior counsel for CIB Reginald Armour had urged the judge not to rule on the issue of rates of interest, since Parliament amended the Central Bank Bill two weeks ago.
The amendment means that policyholders cannot engage in legal action against Government to access their money in CL Financial subsidiaries like CLICO and CIB.
However, the judge disagreed. He said, "I do not accept there is any breach between the legislative and judiciary...The legislation does not say delivering of judgments shall be stayed."
In 2009, the the Manning People's National Movement (PNM) government bailed out insurance giant CLICO—a subsidiary of CL Financial and control of CIB to the Central Bank.
The legal wrangling began when the Central Bank determined that the INC is not an approved financial instrument. It said the INC was not eligible for payment of full principal amount of all third-party deposits as guaranteed by the Government following CIB's collapse.
NIB had asked the court to make a ruling on whether the deposit in the form of an Investment Note Certificate (INC) is guaranteed under the January 2009 Government bailout of the CL Financial Group, which included CIB.
Justice Peter Rajkumar ruled that the INC was a deposit. Lawyers for CIB had argued that it was a security.
The ruling means that the money will have to be refunded with interest to the National Insurance Board (NIB).
NIB will continue to earn statutory interest on the money, starting from Tuesday, at the rate of 12 per cent on what is due.
Between January 2009 and January 2011, the interest on the deposits would be in the range of $84 million, bringing the total with interest up to January 2011 to around $789 million.
Senior counsel for CIB Reginald Armour had urged the judge not to rule on the issue of rates of interest, since Parliament amended the Central Bank Bill two weeks ago.
The amendment means that policyholders cannot engage in legal action against Government to access their money in CL Financial subsidiaries like CLICO and CIB.
However, the judge disagreed. He said, "I do not accept there is any breach between the legislative and judiciary...The legislation does not say delivering of judgments shall be stayed."
In 2009, the the Manning People's National Movement (PNM) government bailed out insurance giant CLICO—a subsidiary of CL Financial and control of CIB to the Central Bank.
The legal wrangling began when the Central Bank determined that the INC is not an approved financial instrument. It said the INC was not eligible for payment of full principal amount of all third-party deposits as guaranteed by the Government following CIB's collapse.
No comments:
Post a Comment