Former Clico chief executive officers, Claudius Dacon and Gene Dziadyk, have disagreed with Finance Minister Colm Imbert’s recent statements about $6 billion which the Clico Stakeholders’ Alliance (CSA) claims is missing from Clico’s Statutory Fund.
“The nation must call for an immediate cessation to the sale of Clico following the minister’s account,” Dacon and Dziadyk said in a joint statement.
The CSA recently claimed $6 billion was missing from the Statutory Fund and produced letters from 2011 and other periods to support that.
But when the Opposition subsequently asked Imbert in the Senate recently if that was valid, Imbert disputed it, saying it was incorrect. He said in 2009, Clico’s total assets were $15.07 billion and liabilities were $24.58 billion, resulting in a $9.51 billion deficit. In 2014, assets were $29.32 billion and liabilities $30.25 billion, with overall deficit of under $1 billion. He said Clico’s position therefore improved between 2009 and 2013 and the unaudited 2015 financials showed similar positions.
But yesterday, Dacon and Dziadyk said: “It’s illogical to argue that a 2015 surplus proves $6 billion was not once silently slipped out of Clico’s Statutory Fund to pay CIB depositors, including state agencies.”
They explained that the Statutory Fund was money set aside exclusively for the payment of insurance and pension claims due to policyholders, adding:
“Clico’s financial statements disclose plainly that $6 billion was removed from the Statutory Fund, violating the Insurance Act, Section 115, which requires an actuary to certify all dealings with moneys held within this fund.
“On December 8, 2011, Clico’s legal representative wrote the general manager of the Deposit Insurance Corporation demanding repayment of over $6 billion of Clico’s Statutory Fund (TTD$6,054,106,622.30).
“This amount was written off to zero as a result of CIB being in compulsory liquidation. So Clico received zero while all the other CIB depositors, including state agencies, received full payment of 100 per cent of their deposits at CIB with interest. This single act pushed the illiquid Clico into insolvency.”
Both said asset values at 2014 could be reconciled to those at 2009 by the events of the ensuing six years involving additions to asset values at 2009 and deductions from asset values at 2009
The additions aspect include: $5 billion cash for T&T Government preferred shares (loan), cash for other loans taken from other lenders, interest, rent, dividends, realised gains on asset sale, asset appreciation, revaluation as well as premiums
On the deduction side are: The $5 billion cash repayment for T&T Government loan, principal repayment for other loans taken, asset depreciation, devaluation, write-off interest charges (including $1 billion paid to the T&T Government for its asset sale) policy claims and other amounts paid, including $1.114 billion spent for marketing, policy acquisition/administration and expenses ($24 million) employees, professional fees (285 million) and $582 million for “other” in period 2009-2014.
Both added: “Asset values are dynamic, they change from appreciation and revaluation, so do the policy liability values; a surplus in 2015 is simply the value of the assets less the value of the liabilities at Dec 31, 2015.”
They claimed Clico was a case study in “manufactured insolvency,” presenting points on how this could happen.