The NEL2 Con
by David Walker
Santa Rosa Consulting Team
“Of course all of this is against our laws here in T&T. The company continues to trade while insolvent – illegal. The company has not produced accounts for years – illegal. The company flouts a judgement of the court requiring it to pay according to contract – illegal. Policyholders are denied access even to their own statements of account – illegal. And the list goes on.”
Here we are, at what the authorities hope will be the two closing acts of the tragedy known as CLICO. Firstly there is a final push, through a device going by the name of NEL2, to extinguish all rights and claims of EFPA holders. Secondly we shall witness the winding up and consignment to the dustbin of history, that once all powerful company called CLICO, along with all its books and records.
This article is headlined NEL2 Con but you will have to bear with us while we explain the context in which the con is to be executed. It would be impossible to achieve this masterpiece of deception without all that went before it.
“What we will show you is that many apparently unconnected acts or omissions over the past three years have been for the clear and narrow purpose of facilitating their devious objectives.”
A deliberate program of financial misinformation
At the outset, the PNM regime had little idea of the size of the financial hole and floundered. By the time they got a sense of its size, they did what weak management does, and refused to disclose it. The incoming regime went one step further. While shunning almost every opportunity to put the true figures before the population, they also engaged in a deliberate program of financial misinformation and downright erroneous figures. Even their own data was self contradictory. There was a purpose – to enable them to justify any figure taken from the Treasury with the blame falling to hapless policyholders. The not so subtle demonisation of policyholders was a necessary adjunct to that tactic.
Amongst all the misinformation however, there is enough hard data that slipped through, for us to get a fairly clear picture. The first is when Minister Dookeran told us during a speech in Parliament that the financial deficit at CLICO was around 7 billion dollars. In a subsequent speech also in Parliament, he indicated that the value of assets had increased significantly. We can surmise therefore that the final deficit was probably no more than 4 billion dollars.
EFPA holders to be shortchanged at least 2 billion dollars
When we consider EFPA holders are to be shortchanged by at least 2 billion dollars we are left with a deficit to be funded of about 2 billion dollars. To meet that deficit they have approved the withdrawal of up to 20 billion dollars from the Treasury. Their deception has worked, even on their own members in Parliament.
They also needed a management regime at CLICO that would participate in or acquiesce to their plans. Remember that the Central Bank failed abysmally in its role as regulator. Why then would you hand the company to that same regulator to run? More than that, every position of significance has been filled by persons who were either active or complicit in the original failure.
Gerald Yetming, now the Chairman was Minister of Finance while policyholders were being fleeced. Carolyn John, now Managing Director was a senior executive who was relieved of her duties and paid a multi-million dollar parting gift a la Gita Sakal. Winston Dookeran, Minister of Finance was Central Bank Governor previously. Larry Howai, current Minister of Finance bought CMMB for just one dollar. Even Jwela Rambarran, the new Governor of the Central Bank worked for CMMB, part of the CLF group. They have completely “circled the wagons”.
Do we seriously expect that bunch to do right by CLICO and its policyholders? Do we expect them to go after the wrongdoers when those wrongdoers were colleagues and friends? Do we expect them to pursue and expose the root causes of the failure when they might well be condemning themselves? I ask you to consider why no steps have been taken against anyone, not even to recover the dividends paid to Lawrence Duprey and other shareholders in the shadow of a massive bailout with taxpayer funds.
Incestuous appointments & Interlocking directorships
The impact of these incestuous appointments goes much further. In the only clear statement about the cause of this problem, Governor Williams pointed to interlocking directorships in the CLF group of companies and related party transactions. Given that these are the only two causes given to date, how does one explain the same Governor appointing Yetming and John to multiple boards in the group? How does one explain the continued practice of related party transactions, every one of them to the detriment of CLICO and the Treasury?
It is all smoke and mirrors, a change of names to pretend that the management and management ethos had changed. Every appointment of note has been made with a view to the continuation of the rape of policyholders and the eventual abuse of the Treasury. It cannot be by happenstance that every one of these key appointments fits the same profile. There was never to be a cleaning out of the stables. The clear intention has always been to ensure that no serious examination was undertaken, or effective reporting done to the public.
Next came the convoluted payment mechanism to policyholders, not by CLICO but by the government. In every other jurisdiction where financial institutions were bailed out, a standard internationally recognised method was used. The government injected funds into the company who then negotiated with their customers. But not in T&T.
That method would have left policyholders with their legitimate and legally enforceable claims against the assets of CLICO. When those assets were eventually realised, the policyholders would benefit. The government could not allow that. They wanted those assets, not for the government mind you, but those fortunate enough to be able to purchase extremely valuable assets for peanuts.
The government therefore decided to purchase the rights of policyholders. Even then they decided to do it via a convoluted scheme that benefited only the financial institutions, removing some 5% or more of the proceeds that should have gone to policyholders. It purchased those rights at a fraction of their true value, refusing to disclose relevant financial information to policyholders. The buyer (government) had full access to information while denying the same to the seller (policyholder) – an insider trade if ever there was one.
Of course all of this is against our laws here in T&T. The company continues to trade while insolvent – illegal. The company has not produced accounts for years – illegal. The company flouts a judgement of the court requiring it to pay according to contract – illegal. Policyholders are denied access even to their own statements of account – illegal. And the list goes on.
Faced with the fact that their chosen policy is illegal on at least ten fronts, our government took the only way out. They passed a Bill that denied anyone the right to pursue action against CLICO or the Central Bank for any reason – yes, that includes persons who never did business with CLICO. It made CLICO, run by lifelong insiders, and still pursuing discredited and illegal policies, immune from prosecution. It is a shameful first for our nation, one that inevitably impacts on persons’ willingness to do business of any sort here.
We now have a company openly committing illegal acts with the blessing of our government to the detriment of policyholders, taxpayers and the entire economy.
All that’s left now is for the mirage that is NEL2 to come to life and CLICO to be closed down and forgotten forever. We will discuss NEL2 later but let’s end today by looking at how they plan to shut the company down without anyone outside the incestuous group seeing the figures and the disgraceful truth.
We do not even have to wonder how they will do it. We just have to look at CIB for the template. CIB has been given more than 3 billion dollars of taxpayers’ money according to them, yet we have not had a single report published on the expenditure of that money. For all we know the money could be in an account in Florida.
Amazingly, the closure of CIB is in the hands of the Deposit Insurance Corporation (DIC). The DIC is a creature of the Central Bank, directed and mostly staffed by the Central Bank. In order to ensure that it is in total control of the liquidation, it sent a senior member of its own staff, Dr Earl Boodoo to manage it. So the Central Bank fails at regulation, then gets to run the company down further and finally ties the ribbon on the package by handling the liquidation without ever having to report or account to the population. The same fate awaits CLICO if we fail to act.
This is the context in which we will next discuss NEL2. Only with this background will the full horror of NEL2 be completely understood.
We should all be angry about what our government is doing to us. We are committed to stopping them. Call us now on 296-2806 to find out how every one of you can help.
Santa Rosa Consulting Team