Michael Lee-Chin’s AIC Finance – Another CL Financial CLICO situation in progress?

“If CL Financial could not sustain paying high interest-rates, how can AIC continue to offer these rates in today’s market?”

AIC Finance and the big question…

by Afra Raymond

Ian Narine’s article Is there enough for everyone? in the Business Guardian (October 14, 2010) attempted to point out the way he had tried to warn the investing public on the perils of CL Financial.  That column made interesting reading, but just try to think if any such situation is unfolding right now.

Just as an example, AIC Finance is owned and run by the Jamaican billionaire, Michael Lee-Chin (photo above), who came in for mention in Anthony Wilson’s October 15, 2009 Business Guardian article ‘Will Lee-Chin avoid Duprey’s fate?’ I commented on that in the November 2, 2009 Trinidad & Tobago Review in ‘Duprey’s fate’. The points are once again pertinent.

AIC Barbados defaulted on a USD bond in 2009.

AIC Barbados, the regional holding company for the group, defaulted on a USD bond in 2009 – in other words, they were unable to pay their debts…

“AIC Ltd chairman Michael Lee Chin has not been able to come up with US$155 million that AIC Barbados, the holding company for his Caribbean investments, owes bondholders. Jamaican-Canadian billionaire Lee Chin, who made his fortune in Canada, has pleaded for five more months to repay the bonds. Financial documents show that of the US$155 million owed, an estimated US$108 million of the debt is owed to Jamaican investors, of which US$47 million is due in 2009.

Prior to requesting a five-month deadline, Lee Chin had been granted an extension to June 11 to repay the bonds. Lee Chin has said he’s unable to meet that deadline…”

… from the T&T Guardian article Lee Chin late on US$47m bond payment. Also see The Gleaner article Lee Chin to redeem US$19m AIC bonds

AIC Finance offering surprisingly high interest rates

In the last part of September, AIC Finance has been advertising surprisingly high rates of interest in daily newspaper adverts which also offer ‘Preferential rates to Trinidad & Tobago Association of Responsible Persons (TTARP) members’.

(click for large image)

Let’s compare those rates to some other offerings from competing financial institutions…

COMPARISON TABLE: 12-month fixed deposit rates for amounts up to $500,000 as at 30th September 2010

Financial Institution Range of interest rates
First Citizens’ Bank 1.25% to 2.1%
RBTT 0.2% to 1.45%
Scotiabank Up to 0.75%
Republic Bank 0.30% to 0.75%
Unit Trust Corporation (Money Market Fund) 2.15%
First Citizens’ Bank Abercrombie Fund 1.90%
Fidelity Finance (part of the Maritime group) 1.8%
AIC Finance 4.25%

“If CL Financial could not sustain this strategy, how can AIC continue to offer these rates in today’s market?”

That is the question.

According to recent press advertisements, the Board of Directors of AIC Finance Limited comprises –

– Michael Montrichard

– Krishna Narwani

– Clarry Benn

– Robert Almeida

– Hugh Williams

– Myrnelle Akan

– Hugh Edwards

Further details are at http://www.aic.tt/page.asp?page=Board+of+Directors

Afra Raymond is a Chartered Surveyor.  This series on the CL Financial bailout can be viewed or readers’ comments made at www.afraraymond.com.

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Filed under Barbados, Business & Banking, Consumer Issues, Economy, Offshore Investments

3 responses to “Michael Lee-Chin’s AIC Finance – Another CL Financial CLICO situation in progress?

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