From as far back as 2000, there were unsettling issues said to be happening at the Hindu Credit Union run by businessman Harry Harnarine.
There were several allegations about the operations of the HCU, most vocally by the Maha Sabha which called for a forensic audit of the credit union. In the same year, then minister in the Ministry of Finance Conrad Enill had announced publicly that HCU was under investigation. He, however, had to retract his statement after Harnarine and a group of his supporters staged a protest in front of Balisier House and later met and spoke with then prime minister Patrick Manning. But also in the same year—June 2002—confirmation of an investigation on HCU came from both minister of labour and small and micro enterprise development Lawrence Achong and Enill—an investigation into the HCU financial operations by the Ministry of Finance and the one by the Labour Ministry into the credit union’s administrative affairs.
The then government and commissioner of co-operatives at the time were accused of being negligent in their supervisory roles to ensure all protocols were being observed and carried out by the union according to the Co-operatives Society Act (CSA).
In 2008 HCU had over 100,000 depositors and its total liability was estimated to be in the vicinity of $776 million.
Although Harnarine had said and maintains he was not guilty of any wrong doing, in 2012, more damning allegations came against him as the Commission of Enquiry into the collapse of CL Financial and the Hindu Credit Union resumed on May 9, 2012, with the testimony of former HCU chartered accountant, Madan Ramnarine, who told the commission that he spotted numerous errors in the company accounting and was offered an inducement to cook the books.
On May 14, 2012, liquidator Dave Rampersad appointed by the Commissioner of Co-operatives to HCU, who gave testimony at a hearing at Winsure Building, Richmond Street, Port-of-Spain, confirmed and added to Ramnarine’s findings.
Rampersad said there was only $98,000 in all the HCU’s bank accounts and a substantial amount was owed to the Inland Revenue Authority, with some $3.1 million owed in PAYE and Health Surcharge. A staggering $1.6 accumulated in National Insurance Board deductions from employees’ salaries, were never paid, and $598,000 was still owed to workers in outstanding salaries. He said The HCU also owed a substantial amount of money to the public utilities.
Rampersad had also testified about receiving threats, repeated violent behaviour and thuggery towards him and his staff from HCU’s board of directors. He alleged Harnarine physically assaulted him in the corridor of a High Court during a trial of a legal matter. The threats, he said, were made to his family as well and legal adviser and he was forced to hire bodyguards for his home.
The Sunday Guardian caught up with Harry Harnarine to find out what he’s been up to and to get his view in the scheme of things surrounding the HCU fiasco.
Q: It has been just a little over a decade since the HCU fiasco broke. We understand a file, which is supposed to detail the findings of the allegations brought against you and HCU, remains before the DPP labelled inconclusive. What does this mean for Harry Harnarine? And has your legal team been pushing for a definitive on this matter?
A: First of all, that was said in Parliament by the last prime minister, Kamla Persad-Bissessar. She had said during a sitting, the Coleman report on HCU would be sent to the DPP’s office for further investigations and for civil charges to be laid. But in our own investigations we have found there isn’t any investigation taking place and if there is one, so far, I have not been interviewed nor have we been asked to send anything. If there is something that they may want to do, I remain open to cooperate with any authority, as I did from the first intervention by the commissioner of co-operatives.
You have an issue with the Ministry of Labour stemming from the HCU matter. You claim the ministry has not been fair to you. Explain?
Once the credit union was placed under liquidation, we had the right to appeal. Separately and apart from the court matter, by law you have to appeal the matter to the Minister of Labour and co-operatives. The then minister was the late Rennie Dumas. He would have sent the matter to court to get interpretation and guidelines on how to proceed with it. Justice Vasheist Kokaram viewed the matter and provided the guidelines however, even after receiving such and several written correspondents from my lawyers, Dumas refused to continue with the hearing. To date, there has been none—not a single Minister of Labour after that has allowed me to speak. This hearing would have been to determine if in fact the board was guilty of any wrong doing, misconduct, or statutory breaches. Subsequently it was communicated that there was none of the above by the commissioner of co-operatives in his statement of case to the court. We feel it is at a point now where we will have to look at other legal options to either force them to quash it or really have it. It’s been 11 years, so we don’t know how possible it might be right now.
You have a legal background. What would you say could be the legal implications if any, the Ministry of Labour can face for failure to engage the hearing in such a high profile and public matter?
(Harnarine laughing) I can only assume if they really had any conclusive evidence of the allegations that were made by the Ernst & Young report, they might have been more than willing to start a trial and to really prove a point about what they have said about myself and the board.
In layman’s terms you were basically described as a thief, dealing unscrupulously with the savings and investments of clients, “feeding” yourself and relatives with loans racked up in the millions without proper paperwork or supporting documents. In 2011 you said in an interview with the media that you were not to be blamed for the collapse of the organisation. But you were the president. Are you therefore saying that you were unaware of these things happening and you had no role in it at all? What is your truth about what happened?
Me being described as a ‘thief’ or anything else was a description that only came from Sat Maharaj on 102.7FM. Even at the inquiry where members took the stand, none of them described me as anything of the sort. What they did say is that they had the pain and trauma of coming to the credit union for their money.
But they all admitted that I never hid or ran, they all would have met with me and spoken with me. Not one single person, and the evidence is there, could have said that they did not have access to me or unable to speak with me or receive payments. All received past payments on their money. Even when the inquiry was going on, the Parliament had already approved payment of the remaining one third of credit union members and they were in the process of receiving their money. So those descriptions labelling me as a ‘scamp’ and ‘thieving from poor people,’ only came from Sat Maharaj and those guys on 102.7FM.
As for lending money to family and friends, Ernst & Young at the beginning they did say that the board was reckless granting loans to themselves unsecured, but when Mr Dave Rampersad (liquidator) went in and had a full investigation, with the exception of one director who later paid off his loan in full, no other director had a single dispute regarding loans. All these allegations about directors taking loans, there was absolutely no proof in the end.
In previous conversations you have told the Sunday Guardian HCU, described as defunct, is still functioning and its assets are performing well. How is this possible with all the legal ‘hang ups’ and unsettled matters still facing HCU?
In fact, the credit union is in receivership, so you will see in its description ‘Hindu Credit Union Cooperative Society in brackets-Liquidation.’ The certificate was never cancelled. That could have only happened if the commissioner determined that we were all guilty and the matter is finalised. And that was a blessing because at the end of the day with the ten years, we were able to get a stay—no selling of any assets of the credit union or no fire sale of loans. Most of the loans had a duration time of ten years and it’s now coming to the closing time of paying off loans...I am still president with residual powers as directed by the liquidator.
A new Hindu Credit Union has been formed—the Hindu Parivaar Credit Union Co-operative Society Limited, which launched in Barrackpore in April, are you involved in any way with this credit union?
I am not. But I do have some advice for them. I don’t think any financial institution should be named after any religion. I say so especially if you become a large-scale credit union. We live in a plural society. In retrospect, I feel by allowing the credit union to grow into a billion-dollar organisation inclusive of groups, it allowed the Hindu leaders to see the credit union as a Hindu organisation rather than a financial institution. The growth of HCU was not from Hindus, it was from T&T.
How has the whole HCU fiasco affected you professionally and personally? This happened in the public eye.
I spent almost seven years of my time not going on the employment market, even making it to study law. I have decided in the good times, the members have supported me and in the bad times I must be able to stand with the members. We have what we call the HCU shareholders and the depositors group and that group was very instrumental in assisting with all the legal fees. It was a challenging time but I did enjoy the love and the support from the credit union membership. I can tell you a lot of credit unions still consult me; I won’t want to call any names. But I still see myself as a champion of the ‘small man.’
It took some time for the then government to get involved even after having knowledge of what was happening at HCU, which made many become suspicious as to why. Was anyone from that then government affiliated in any way with the HCU? Did HCU fund any State or political venture?
There was no minister ever affiliated with the HCU per se. HCU did in past times assist financially with both the PNM and UNC, but no minister or political official had any shares in HCU or assets in any of the companies within the HCU group.
Any lawsuits stemming from the HCU fiasco? If yes, what are the current states of these lawsuits?
There is no personal lawsuit on me by any credit union member neither by the regulator and the commissioner cooperatives. There is no action on Harry Harnarine, neither HCU.
What is the next step for Harry Harnarine?
I have no intention of ever going back into public life. I am just into a lot of consultancy now.