Statement by Trinidad & Tobago Prime Minister Kamla Persad-Bissessar
“Do you remember the pyramid? Now we are hearing about Ponzi schemes and so on. This here was the CL scheme, and what it was really is to take people’s money in non traditional investments, push it out there in very risky investments to try to get a very high rate of return and, of course, like a pack of cards, it collapsed.”
“The evidence suggests then that these signs were visible, years ago.”
“the former Minister of Finance was able to withdraw her investments in the CL Financial group almost immediately before her government had jumped in to dump money in there. Her relatives were also equally able to retrieve their investments before the collapse. It is also now history that a PNM financier and former treasurer was a senior executive at the CL Financial group during the buildup to this collapse.”
In Parliament, Friday October 1st, 2010.
Mr. Speaker, my colleague would indeed pilot the Motion that is on the Order Paper in a short while. I thank you for the opportunity to make this statement to the House.
The CL Financial crisis is, perhaps, one of the largest failures in our country’s history; financial failures. We believe that it is important to reiterate and reemphasize the magnitude and systemic exposures that may arise from this crisis, as well as some of the factors which contributed to this fiasco, based on our understanding to date. May I say, we continue to gain more and more information as time unfolds daily.
In January 2009, the Central Bank of Trinidad and Tobago intervened and placed the distressed financial institutions of the CL group under section 44D control. These institutions included Clico, CIB and British American. The decision to intervene was taken due to requests by the CL group for substantial government and Central Bank support for what was then described as a temporary liquidity problem.
In this current economic environment, given the extent of the significant debts owed by the CL group, the problem was obviously not a temporary one. There was a much deeper and wider problem of solvency in the group’s financial institutions, where debts exceeded available assets and where inter-company borrowing left the financial institutions with significant receivable balances due from CL, but for which there was and is insufficient freely available assets available within the group to repay Clico, BAT and CIB.
It is our view that the former administration grossly and completely mismanaged the Clico matter making it into the crisis it is today. By their misguided misinformed actions, they clearly had no solution to the matter. Mr. Speaker, why do I say this?
We now know that the then Government was blinded by personal interest in Clico and they lacked the capacity to properly diagnose the crux of the problem facing Clico. More than that, recent disclosures in a private matter before a domestic court in the High Court, reported in the newspapers locally, revealed evidence of concern raised six years ago about the stability of CIB. It is alleged that one of the directors of CIB at the time was a gentleman who subsequently became a Minister in the Ministry of Finance under the previous government. By their incompetency, they added to the tragedy of what Clico now means to this country.
More than that, they pumped billions of dollars in what appears to be in a blind manner, into a situation in which they had not the slightest clue of how to handle it. What the results show is that they were acting out of their league. They wasted $7 billion in Clico which passed through Clico in the proverbial “dose of salts” manner. Their actions signified nothing and, clearly, did not accomplish anything for our citizens in spite of that seven billion of taxpayers’ dollars being wasted there.
If we focus on insurance entities of Clico and BAT, it was clear that these companies shifted their marketing focus away from the traditional long term insurance business, and they began to sell Executive Flexible Premium Annuities (EFPAs) which you are reading about. So they moved away from their core business and went into their non-traditional insurance business went into the EFPAs. In Clico’s case, they also marketed and guaranteed the principal and interest on the mutual fund. The maturities on the EFPAs and mutual fund were typically three to five years, but some were short as one year.
The interest rates offered and paid on these products ranged from 8 per cent to 9 per cent on average and for very large sums which were invested, the rates went as high as 13 per cent. By comparison, information published by the Central Bank revealed that the weighted average interest rate on deposits invested with commercial banks range from 2.88 per cent to 3.14 per cent, between 2006 2008. So, here it is, a very high interest rate one would say an unreasonable interest rate was being offered to persons to induce them to come in to invest in these programmes that they had, whilst the going rates were 2.88 per cent to 3.14 per cent weighted average interest rate as compared to 8 per cent, 9 per cent and 13 per cent.
These companies raised enormous amounts of cash from the sale of these products because Clico’s rates were obviously significantly higher than what was prevailing on the market rate for investment of similar duration. So much money was raised from the sale of these products that EFPA and mutual fund liability owed to 25,000 Clico and BAT customers equal $12 billion as of June, 2010 which was twice the size of the $6 billion owed to the 225 traditional long-term life insurance policyholders.
Another important element of the crisis that has not been sufficiently highlighted is that approximately $10 billion of the $12 billion EFPA and mutual fund liability is due over the next 18 months, that is to say in the short term. The $12 billion liability includes approximately $10 billion owed to individuals; $600 million owed to credit unions and trade unions; and $1.1 billion owed to corporations.
Additionally, when one considers the taxpayers’ exposure to Clico and other distressed CL Financial entities, it is also important to know that Government owned corporations have also invested approximately $300 million in Clico and in BAT, EFPAs.
Separately, state-owned companies NIB and NGS also invested approximately $1.7 billion in CIB. As such, the State and therefore the taxpayers are directly exposed to CL Financial Group institutions by way of impaired investments that amount to approximately $2 billion.
This crisis is widespread and as a nation, we are all bearing some form, some part of the burden of the crisis. Mr. Speaker, how did this happen? How did we reach to where we are today that we have this hole of a debt that is a burden and a drain on the Treasury? It is a burden and a drain not just on the Treasury, but it is the money of the taxpayers, not the assets of Clico, because the liabilities far outweigh the assets. How did we reach there?
A significant amount of the cash raised from the sale of these products was “lent” or transferred to CL Financial, the parent company of Clico and BAT, and other CL Financial entities, to fund investments and acquisitions within Trinidad and Tobago, the Caribbean and across the globe. Many of these investments were extremely risky.
CL Financial took these risks because they had to generate higher than normal returns to pay these higher than average interest rates on the EFPAs and mutual funds.
The inability then of the parent company, CL Financial to repay Clico and BAT the billions that was “borrowed” was exacerbated by the global financial crisis and due to the fact that CL secured some of the assets of Clico and BAT for other CL Financial third party borrowings. So, it is really, you know, in the sense of a scheme. Other people would have called it a kind of scheme that was going on.
I know that when we were younger we heard something about the pyramid. Do you remember the pyramid? Now we are hearing about Ponzi schemes and so on. This here was the CL scheme, and what it was really is to take people’s money in non traditional investments, push it out there in very risky investments to try to get a very high rate of return and, of course, like a pack of cards, it collapsed. And so, what happened then?
These companies, insurance companies, gave assets to CL Financial for which no consideration was provided in return. That is to say, they took the cash from the sale of the products in Clico and BAT they took that money out and invest into the other non traditional businesses, but they gave no consideration, that is to say, nothing in return for using and leveraging people’s money in that regard.
Now, I am not an accountant. I would not imagine that I can do the accounting in that regard, but further investigation into this group is required. It appears to me that when one is not able to meet debt payments when they become due, whether inter-company or not, that is a clear sign of insolvency. Common people language, “Yuh gone bankrupt.” You are broke when your debts are so far and you cannot meet your payments.
The evidence suggests then that these signs were visible, years ago. Expanding on the topic of Clico’s and BAT’s assets, in addition to amounts owed by CL Financial, it is a known fact that Clico also owns shares in Republic Bank Limited and Methanol Holdings and some other smaller investments. These are obviously, in the view of many, very solid investments with value.
However, what we must understand is that these investments are included in the asset balance previously stated by the Minister of Finance, Hon. Dookeran, when he indicated that these assets equalled about $16 billion while the liability balance equalled $23 billion. Therefore, these assets with value are included in the calculations which indicates that the recorded values of these assets on the books of Clico still fall short of liabilities by $7 billion.
In addition, information provided by the Central Bank and Clico management indicates that the majority of these assets Republic Bank and Methanol Holdings are already included in the statutory fund, which is a fund where assets are supposed to be held in trust as cover for insurance liabilities.
It is also important to note that Clico’s assets in this statutory fund also fall short of the liabilities that this fund is supposed to cover by the sum of about $6.4 billion, based on information provided by the Central Bank and Clico. This statutory fund deficit is a clear signal that the inadequacy of the financial regulations resulted in insufficient oversight and investigation, into this financial giant by the regulators.
The intervention by the authorities coming down under section 44D in January 2009 was too late and was therefore reactive and not preventative, hence the ability and the opportunity to rebuild now is limited. There was oversight and governance failure across the board, and questions must be asked of the regulators, auditors, executives and, of course, the previous administration under whom this all unravelled.
The liquidation scenario, I turn to that. Additionally, the $16 billion in assets at Clico is based on what is recorded on Clico and BAT’s books as of June 2010. If a liquidation type valuation or sale of these assets is conducted in order to repay the short-term liabilities, it is extremely likely that these assets would not raise $16 billion and, therefore, the shortfall in assets available to repay Clico creditors would be even higher than the estimated $7 billion. That is to say on the books now there is a deficit of $7 billion between assets and liabilities. A shortfall of $7 billion. But should it be that you have a liquidation type valuation and/or what is called a fire sale to try to repay the creditors, what is going to happen? What happens in a fire sale is like a garage sale. So, you are not even going to realize the $16 billion that these things are estimated to be valued at and, therefore, you are going to get a position where it may be higher. I am saying that deficit, the shortfall in assets, would be higher than the $7 billion that is at present estimated.
It must be borne in mind that the Clico creditors do not only include the EFPA and mutual fund holders. These are the ones we are seeing and, rightly so, they are concerned for their investments and savings, but there are so many others. The group also includes secured lenders, local and foreign banks; they include traditional long term insurance policyholders; they include credit unions, trade unions, state owned corporations and the central government, that is to say, the citizens, the taxpayers of Trinidad and Tobago who are very much in the centre of this.
Everyone in this group of stakeholders would suffer substantial losses should we move for the “quick sale” or “fire sale” of assets approach, if we adopt that, or if Clico was forced into such a quick sale because of a disorderly liquidation. So, in two ways this could happen: If we adopt that approach to satisfy the demands of every single person to the full value of what it is they claimed is owed to them and we go into a disorderly liquidation, we are going to realize far less than if we are given the time within which to turn it around and to raise the moneys.
If we are forced in a quick sale so one is, we could voluntarily say, “Look we are going to sell everything out”. It is not an option, because it is a fire sale, a quick sale, a garage sale and you are not going to get the estimated value, you will go even further under.
The other way is for someone to force us into liquidation force Clico into liquidation, CL Financial, and so you would go into a disorderly liquidation sale again. The result would be the same.
So, what action was taken by the former government in the light of all of this? The previous administration injected $5 billion into Clico and they spent $2.3 billion to bail out the other distressed entities such as CIB in particular, so coming to a total of $7.3 billion has gone into that hole and yet today the Government and, therefore, the taxpayers of this country have been called upon to come up with another $16 billion to $19 billion. So what happened to that $7.3 billion? Where did it go? Who are the people that were paid? How was it utilized? What happened to that $7.3 billion? That was the miracle bail out offered by the then government in 2009. We were there and we argued with them, but they came with it as a done deal to the Parliament. It was a done deal. They had already signed the MOU when they came to the Parliament for us to amend the Central Bank Act and bring in these emergency powers and so on. It was a done deal. They never came; they never consulted. They signed that deal and, again, we have to ask why, because as we all know what happened immediately before the signing of that MOU.
Anyway, so I am saying $7.3 billion dumped, if you want to call it, wasted. Where has that $7.3 billion gone? These are serious questions to be answered.
Despite the statements made by some persons in the public regarding “guarantees” made by the previous administration, this guarantee does not exist, because there was no authorized guarantee via the parliamentary or budgetary approval process. There was none. There was absolutely none. So when you stood out there and you held out to people saying that they were guaranteed, there was none. The Government took no steps to do any such thing at that point in time. So you pumped in the $7.3 billion; you gave no guarantee to anyone and worse of all, what was in it for the people of Trinidad and Tobago; the taxpayers’ dollars that you were spending. The $5 billion injection into Clico fell drastically short of what was really required to guarantee investors in order to make Clico and BAT ‘whole’ so to speak by $7 billion. That was not the case. Already the liabilities were far above what were the assets then. So that money, what has become of it?
The prior administration misdiagnosed the problem, and to make matters worse the $5 billion injected into Clico only resulted in a 49 per cent minority share ownership interest in Clico. So we put in $7.2 billion and what we got in return for the taxpayers of Trinidad and Tobago? A 49 per cent minority share interest in Clico. In other words, for $5 billion taxpayers in this country we got a minority interest in what? In an insolvent bankrupt company. That is the deal they brokered. That is what they worked on, Mr. Speaker.
The $5 billion has been spent we are advised to repay matured EFPA policies in an ad hoc and unstructured manner where payment arrangements were entered into based on levels of funds invested. What criteria did you use to repay investors? Whom did you choose to pay? How were they chosen? These questions need to be answered. Because if it is today after the $7.3 billion, all these EFPA people, the policy group and so on, they are out there, where is their money? Where is their money? Did you have a priority listing of who should be paid? Why did you go and you are now crying crocodile tears about trade unions, credit unions, the poor man and the small man why did you not pay them first? Why did you not pay them first? Where did that $7 billion go? We need those answers, Mr. Speaker.
We deserve those answers. The taxpayers need to know. Because when a parent has to buy school books and bags to send his/her children to school but they have to pay tax out of the little money, they need to know where that money has gone.
So the prior administration Mr. Speaker, this $5 billion in taxpayers’ funds I said $5 billion to the Clico people and remember $2.3 billion to other entities of CL; they were used to continue paying really high interest rates of 8 per cent and as high as 13 per cent on policies that had not yet matured. So here you are, you took over this insolvent company and what did you do with the money? You went in there and you continued to pay what was totally out of the market. The 8 per cent, the 9 per cent, and the 13 per cent which was on the very large policies. That is where you put your priorities. You went in there and spent the money. They had not yet matured and this practice continued.
It was only when the Minister of Finance, Hon. Winston Dookeran, instructed Clico and BAT to stop this payment, it is only then it was stopped and, then people said “oh how can you do us that?” How can you do that? We could do that in the circumstances where we are now, because what happened before and how it is that we arrived at this place is what I am speaking about. The prior administration adopted a narrow view by solely seeking to address local investors that were supposed to be covered by the statutory fund. That is what you did. So approximately 1,100 investors in EFPAs that reside outside of Trinidad and Tobago were excluded under the prior repayment plan. This group, I am advised, is worth $1.2 billion, additionally, since the mutual fund investors were not covered under the statutory fund were also excluded.
There are 2,800 investors in this mutual fund group and they are owed, I am advised, $1.2 billion as well. Both of these groups are included in this Government’s offer of assistance. Both of these groups that were left out completely out of the I almost used the word “bogus” but I do not think I withdraw the word “bogus” repayment plan that they had, they left out these 1,100 investors in the EFPA; they left out another 2,800 in mutual funds; they are now covered by the plan and the proposal being made by the hon. Minister of Finance, Winston Dookeran. And that is an offer of assistance.
I saw a headline which said “Prime Minister said take it or leave it.” What I indicated; it is an offer being made to people. It is an offer that is being made, it can be accepted or rejected. You can decline it. No citizen is forced to accept the offer. None! Because the Government is coming in as a third party seeking to give some relief to these persons who have been so affected. But given the size, the magnitude of the debt, the Government will bankrupt the Treasury and collapse this economy should we go now to pay every single one of these people every single cent that they claim that they have invested in these companies. That is the truth and that is the reality. We must face the reality in these economic times. We have to face the reality. We have to wake up and smell the coffee.
We are here where we are because action which could have been taken years ago was not taken and we inherited this. This has been a legacy, a very unfortunate legacy from the past and mismanagement from the last administration and, what we are saying is we could leave it there. Leave the CL people, leave the Central Bank there in the role under the just leave everything as is and then what happens? Just leave it there. We have stepped in as a third party; as a Government that is keen and interested to see where we can bring some relief in our strained economic circumstances. That is what we are doing.
So we have made an offer, an offer that will see thousands of people who are due up to $75,000, able to get their $75,000. These are the smaller people in the country. I am not saying that the smaller people deserve more than other people. But certainly thousands of people, what we call the ordinary man and woman in this land, who bought their small insurance policies and so on, we are offering a hand to help them. We are not depriving them. But when we come to those who took the very risky investments in the FPAs and so on, and these very high interest rates we would love to pay every single person every single cent. We would like to do that but the economic circumstances will not permit it.
So as a responsible Government this is a plan that we have proposed. It is a plan. I come back to the point, persons so affected are free to accept the offer we made. Take your $75,000; take the 20 year bonds which you get per year, or if you do not want it you are very free. Nobody is forcing you to take up the offer. That is the point I was making. It is some help that we are seeking to give. I do believe the Minister of Finance has also indicated that they will treat with persons who are ill and so on in a different way to see if we can assist. We are doing what we can to try to help, I want to repeat the point, in very strained, very tight economic circumstances.
As I said we had an option which to me was no option at all. The option was to just leave it; not to give a lifeline, not to help; not to give anything. Just leave it. Do you know what would have happened? You would had seen an insolvent company, a bankrupt company. What are you going to get for it? You retired in the courthouse for the next five to seven years all the way to the Privy Council. Where is that going to help? How is that going to help those who were getting $75,000? But as I say it is a choice that each person would have to make.
There are approximately I said these groups who were not included in the former administration’s repayment plan remain secret in what criteria and condition they used to determine who would be paid out and we need answers to that. We are now offering some assistance to those groups as well.
In addition, under their plan there was no timeline for payments to Clico and BAT investors under what they had proposed. There was no timeline. There was absolutely none. What we are trying to do is to put some time frames. At this point in time that is the best that we can offer. The previous administration also entered into an MOU and a shareholders agreement with CL Financial which required CL Financial, amongst other things, to repay the government for funding provided by selling assets. Yet 20 months since the intervention by the previous administration there has been no sale of assets. So the government kept dumping the money in there; had an MOU which they could have started to look for sales which we could even do, I am sure the Minister of Finance can still do. We can put it out on our stock exchange. You could have public ownership of some of these more valuable assets or look for sales in other ways for some of them. Twenty months they intervened; $7.3 billion down the drain and not a single thing, not a finger was lifted to deal with this crisis. None whatsoever! Good money behind bad money.
The vast majority of CL assets are held as collateral by lenders and the agreements entered into do not appear to provide sufficient legal basis to force the execution of these proposed sales. So you could no get the agreement worded properly to safeguard the interest of the taxpayer and the people of Trinidad and Tobago. Seven point three billion dollars spent without proper authorisation and, all the taxpayers have to show for this as I said before, is a minority interest of 49 per cent in a bankrupt company. This is a scandal of monumental proportions. So what do we want to do? What do we intend to do? We have inherited this crisis. We have sought to provide some urgent relief to see Clico and BAT policy holders and investors, whilst at the same time ensuring fiscal responsibility is not compromised in any way.
We must understand that Clico and BAT are private institutions. And after spending the $7.3 billion the Government is under no obligation to spend additional taxpayers’ funds related to this crisis. How does that sound? What does that mean? We do not care? What we are saying is we have no legal obligation to take more taxpayers’ dollars to try to help those who have found themselves in this position or who have been placed in this position because of mismanagement on the part of the former administration, of course mismanagement by the companies themselves, the private companies.
We are under no legal obligation. I think that is the point that is to be made. However, recognizing the need for some relief, the hon. Minister of Finance, Minister Dookeran, announced in his budget statement that:
1. All of the traditional long term life insurance policyholders; group pensions and long-term annuities and so on, would be fully protected.
This fully covers 225,000 traditional policy holders. This, in a time of constrained economic realities; in a time when around the world, around the globe, everyone is experiencing serious problems.
I saw one of the editorials today or yesterday, asking the question, “Are we going into double dip recession?” We just had the global recession and as we seem to be rising out of it, are we going to dip back down? We must be real in this country. We have to face the reality. And as a responsible Government that is what we intend to do and so, the Minister of Finance announced first of all the 225,000 traditional policyholders to be covered. All EFPA policy balances of $75,000 and less would be fully paid, due to satisfy approximately another 10,000 investors.
Balances in excess of $75,000 will be paid in installments over the 20-year period with some concessions as announced by the Minister of Finance for the elderly and for those who may be ill and in dire need of their moneys. We have revised the policy in that regard.
So this is what we have offered. And as persons affected, persons may decline this offer or they may accept it. What is their alternative if they do not accept it, perhaps to go to court. As I said before you are going to sue a bankrupt company; the Government has no legal obligation to pay the liabilities, the debts. In fact, I am advised, and I stand to be corrected until further legal advice comes to me, but I am advised that under section 44D the Government took over the assets and so on of Clico which states:
“The powers of the Central Bank shall not be exercised unless the bank is also of the opinion that the financial system is in danger of disruptions of financial damage, injury or impairment as a result of circumstances giving rise to the exercise of such powers.”
Section 44D (1) talks about Government coming in and taking over. I am advised by some of the lawyers that whilst we have taken over the contractual arrangements we would have taken over the benefits but not necessarily the liabilities of that. So the view is that we are not responsible and when I say responsible, legally I say we do have as a Government a responsibility to our citizens to try to help, but there is no legal obligation, I am so advised, for us to pay the $75,000 or any thousands to the investors and the policyholders.
Mr. Speaker, I am also advised and given the three groups we are trying to assist which are all three groupings caught within this net, the traditional long-term life insurance policyholders, 225,000 of them fully covered, all EFPA policy banks $75,000 and less, fully paid, another 10,000; balances in excess of $75,000 will be paid in instalments over 20 years. I may be wrong, but if my memory serves me right, I do believe that this grouping is about 14,000 people.
So the vast majority of persons affected are between 12,000 to 14,000 persons are the ones affected. Yes, we care for them too. I am saying that economic circumstances may not permit us now to give them the full extent of their investment. We are offering them something. So the vast majority of people who were caught in this trap and in this chaos are going to have some relief coming from the Government.
We are going to give some help. These installment instruments I am saying can be cashed in early at financial institutions. Yes, they will be cashed in at a discount. But I have been informed by the hon. Minister of Finance, Mr. Winston Dookeran, that based on discussions with local financial institutions, that if the first five years of installment notes were cashed in, the discount could be as high as or as low as when we look at it the glass is half-full or half-empty, depending on how you look at it 5 to 10 per cent. What this means is for every dollar, you could get between 90 to 95 cents per dollars if you decide to discount. I am so advised.
This is an offer, Mr. Speaker, and I emphasize again, it is an offer, you do not have to take it should you decide that it is not in your best interest. Mr. Imbert, Member for Diego Martin North/East, I see you are grumbling. You do not have to do it. Fortunately, many on your side do not have to worry about this because they pulled their money out of Clico. Ministers of government, ministers ‘ families, on Old Years Day according to hon. Dr. Moonilal, Member for Oropouche East, when everybody was getting ready to spend Old Years Night with their families making a pot of pelau or whatever the case may be going to pull their money out as the most responsible person in the Government for the finances of this country, as a minister of finance withdrew your money, ensured that your family withdrew. You have no authority. You have no authority to speak on this matter. So it is an offer we are providing to Clico and the BAT investors. The offer can be accepted or the offer can be declined. If it is declined, then investors’ alternative is to seek redress in different ways. I am sure they would have been advised accordingly.
The Government cannot afford an additional $7 billion to pay off all investors in Clico and BAT over a shorter period. We cannot afford it and when the Government cannot afford it, the country cannot afford it, the taxpayer cannot afford it and the people cannot afford to pay this amount at this time. We cannot afford it! We have already spent taxpayers, $7.3 billion, so we cannot come up with that $7 billion now. This will be fiscally irresponsible. It will deprive 1.2 million citizens of this country who did not invest in Clico and BAT of much needed expend it are for infrastructure for health, for education, for security, for whatever it may be. Should we take up the whole budget and just pay these 1,200 to 1,400 investors their full amount today? How can we do that as a responsible Government? We cannot do it because in a budget of $49 billion, we will be taking a substantial portion of that budget to give to 1,200 people. I am saying we wish we could give you, but not at this time, immediately and in this way. Those taxpayers cannot afford it, the country cannot afford it.
We understand, Mr. Speaker, there may be instances where Clico and BAT investors may face life and death hardships due to this crisis. We understand that people’s livelihoods and saving plans may be adversely affected by the plan proposed by the hon. Minister of Finance. We are a Government that listens. During the budget debate I said we must first listen and then lead. So we want to give the stakeholders an opportunity to voice their concerns.
At Cabinet yesterday, we agreed to establish an interministerial sub committee of the Cabinet to meet and engage in discussions with various stakeholders to take their views on board. This interministerial sub committee will be chaired by hon. Vasant Bharath and include several Members of the Cabinet. They will be supported by technocrats from the Ministry of Finance, and in the service of the people this committee will be mandated to listen to the people.
Secondly, in terms of the way forward, in light of the circumstances, we decided we will not proceed with the Bill that had been sent to the Parliament. We have decided we will not proceed with that Bill I am hearing rumblings from the other side. I am hearing my friend saying we had no choice. There is always a choice of what we must do. At extensive discussions in the Cabinet yesterday, we made the choice that we will not proceed with that Bill because we were not of the view that we should use our special majority in the Parliament to deprive citizens of their right of access to the courts.
Mr. Speaker, we have the majority in the House. So when further discussions were undertaken, when we looked at it very carefully, we looked at the proposed Bill, we looked at further amendments to the Bill Mr. Speaker, this is in the public domain. We have nothing to hide. The proposal had come that this may be one way to proceed. That was the proposal. So the Bill was drafted on the basis of that proposal, but it was laid in the Parliament on Tuesday, I believe after the meeting on Monday under the understanding that further amendments would be made and finalized at Thursday’s Cabinet meeting. At the Cabinet yesterday, with more information that came to us, we decided we would explore other options. So we did not want to use our majority. For the first time we would have been using such a majority simply to deprive citizens of right of access to the courts. That is why we did not proceed and Members felt very strongly about it. And contrary to the views by some that there was a fracture in the Cabinet and some want it and some do not want it, how there are tensions, soon COP and TOP nothing is further from the truth.
There is no “bacchanal” in the Cabinet. It was a unanimous decision in the Cabinet yesterday. So there is no fracture. There is no UNC, COP, TOP, MNSJ, we are all one family. And our PNM friends are still of the same family of the people of Trinidad and Tobago. So none! Do not live with bated breath and with great expectations because it is not going to happen. We will hold together, we will stay together in the interest of the people. The Attorney General is most present.
Mr. Speaker, as I continue, the past administration mismanaged this matter badly when they failed to act in spite of the very early warning signs, and when they finally responded, what did they do? $7.2 billion dollars dumped into Clico. It is now history as I said before, that the former Minister of Finance was able to withdraw her investments in the CL Financial group almost immediately before her government had jumped in to dump money in there. Her relatives were also equally able to retrieve their investments before the collapse. It is also now history that a PNM financier and former treasurer was a senior executive at the CL Financial group during the buildup to this collapse.
Additionally, given the systemic risk involved with this crisis, the thousands of our people, taxpayers and their families who have been adversely affected, the significant taxpayers’ funds already spent and to be spent, Cabinet has decided to have a Commission of Enquiry appointed into this financial crisis, the CL Financial crisis as well as the Hindu Credit Union crisis.
The commission will investigate the files of Clico, BAT and CIB, as well as the overall CL Financial group and HCU. 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 Office of the DPP by the Office of the Attorney General.
Mr. Speaker, the root causes of this financial collapse must be fully ventilated. The persons deemed responsible must be held accountable. We are not guessing or groping in the dark, or acting blindly, nor are we throwing away money arbitrarily.
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; we have engaged the consultative process by establishing an interminiserial committee, but we will also conduct an enquiry into this fiasco and ensure that those who are responsible for breaking the law of Trinidad and Tobago are exposed and brought to justice in the Republic of Trinidad and Tobago. [ We know what we are about. Unfortunately I cannot say the same for my colleagues on the other side.
So, I give you the assurance, Mr. Speaker, and through you, the national community, that we will do everything we can to protect the interest of the people of Trinidad and Tobago, whilst at the same time we will ensure that justice is done.
I thank you, Mr. Speaker.