
CL Financial bailout – The Truth about the Truth
by Afra Raymond
Continuing from last week’s critique of the revised bailout and its implications, I have further concerns as to the process by which the legislation was passed.
I am aware that the Members of Parliament were given a briefing on this matter, so that they would be better informed on this complex matter. That briefing was conducted personally by the Minister of Finance and the Governor of the Central Bank, together with their advisers and certain CLICO officials.
The briefing provided background information on these areas –
- The status of the various outstanding audited accounts;
- A ‘profile’ of the monies owed in terms of amounts owed to certain classes of policyholders. I am told that quite a small number of these claimants held a large proportion of the monies being claimed;
- The various lawsuits/judgments against the Central Bank;
- The rationale given for extinguishing the right to sue the Central Bank in this matter was that public rights and stability were being given preference over the exercise of private rights.
I am also told that the Members of Parliament were not given copies of the presentations, which seems to have effectively limited them to gaining certain impressions or the limited notes they would have been able to take during the briefing.
That account of events, given to me by more than one Parliamentarian, seems to suggest that the very rationale of the exercise, said to be the elevation of public rights over private ones, could have been subverted.
The reality is that, despite the extensive debate on the matter, this is the position –
- Accounts – There has still been no proper, clear statement on the status of these CL Financial and CLICO accounts, which is unsatisfactory. An emerging view is that this is a calculated silence, since the companies are insolvent, which would make the Directors liable for the criminal offence of ‘trading while insolvent’. That is a considerable issue, which could only be overcome by the State issuing a guarantee to the group’s creditors, which would have exposed the Treasury to the full extent of the huge claims. The silence is a shabby ‘third way’, which gives a further insight into why the bailout remains untenable to so many of us.
- There is no publicly-available profile of the monies owed in terms of amounts owed to certain classes of policyholders. That is a major omission and one can only wonder why the information is being effectively suppressed. In addition, there were statements that the claims of Credit Unions and Trade Unions will be fully-paid, which seems to be a favourable treatment in comparison to the individual claimants.
- In respect of the lawsuits and judgments, I do not see how the block on lawsuits against the Central Bank can stop claims in foreign Courts.
- The rationale of public rights being preferred over private rights is a solid one in a matter of this type, but upon reflection one is left with a different impression. How can public rights be said to prevail in a situation where the public is denied the essential parts of the picture?
The Parliament benefits from briefings on complex and important matters, but it is unacceptable that those briefings should be somehow shrouded in secrecy. The Minister of Finance and Governor of the Central Bank need to publish their full Parliamentary briefing, without delay, to remove any lingering doubts. Good governance, transparency and accountability demand no less.

Florida: Just one of the Duprey family mansions
Non-payment of taxes by top CL Financial executives Continue reading →