Gonsalves calls for Deloitte to be replaced as CIL judicial manager
During a sitting of Parliament on October 19, Gonsalves, in presenting the Plan of Arrangement (BAICO and CLICO) Bill, 2015, disclosed that in a confidential letter written to Barbados Prime Minister Freundel Stuart on August 17, 2015, he observed that the ECCU had lost confidence in the judicial manager assigned to resolve the financial issue.{{more}}
Gonsalves said he had asked Stuart to hold the contents of the letter in “the utmost confidence,â in anticipation of their discussions, but he is yet to receive a response from Stuart.
“Well, I havenât gotten a response, so I have to take the Parliament and the country into my confidence, ” he told listeners on Monday.
Reading from the letter, Gonsalves, who was appointed to lead negotiations on behalf of the ECCU governments, said: “… the Currency Union governments have lost confidence in the judicial manager. While the Currency Union was prepared to follow the lead of the Barbados government and appoint Deloitte as the judicial manager, we have reached a stage where the continued management of CIL by the judicial manager is untenable.
“We believe that the interests of CILâs policyholders will be best served if they are replaced by a firm that is better able to handle the complex restrucÂturing. Our concerns are further exacerbated by the fact that if Stage 1 proceeds, then the ECCU policyholders are left with Deloitteâs all to themselves.â
The Plan of ArrangeÂment (BAICO and CLICO) Act 2015, seeks to further assist in the resolution process.
Gonsalves explained: “The plan of arrangement bill, which is before us today, is to facilitate the disbursement of the proceeds from the settlements to BAICO policyholders. It provides for a legally robust court-sanctioned and expeditious distribution to policyholders.â
He further expounded that the ECCU has become increasingly worried by the non-response of the Barbados Prime Minister to two letters (sent on June 25 and August 17 this year) penned by Gonsalves that express concerns about the “Barbados-onlyâ CLICO policyholder plan that was proposed earlier this year.
“We believe that the current proposal advanced by the Barbados government is discriminatory, manifestly unfair, and we simply cannot countenance it,â he asserted during Parliament.
Reading from the second letter that he wrote to the Barbados PM, Gonsalves quoted: “I remind you of my letter to you dated June 25th, 2015⦠to which I await a response – time is of the essence. Final submissions have now been made to the Court in Barbados concerning CIL. The Court has before it an unenviable choice to place CIL into liquidation or to support a proposal that is prejudicial and discriminatory towards over half of its policyholders, including those from the Eastern Caribbean Currency Union. Attached herewith are the submissions made on behalf of the ECCU governments in this regard.â
Gonsalves recalled that detailed submissions were attached to the second letter, as was done in the first letter.
The letter further stated: “Regrettably, well-meaning discussions on this matter between the governments of Barbados and the ECCU, dating back to 2009 with your predecessor, have been sporadic and have not yet borne fruit. I am sure you would agree that leaving the fate of this important matter in the hands of the Court may prove unwise. There is no doubt in my mind that the time has come for us to lay aside differences and proceed to an agreed way forward for all CILâs policyholders. It is imperative that we direct our energy and focus towards solving this matter urgentlyâ¦
“We in the Currency Union are firmly of the view that the proposal before the court is discriminatory. At the same time, it seems that the Barbados policyholder have a potentially workable solutionâ¦
“To this end, we identify the following matters of concern from your governmentâs proposed stage one, in the hope that these matters can be addressed by cooperation and a sense of fairness.â
In the letter, the Prime Minister listed the following concerns: 1) protection of rights of ECCU policyholders 2) the failure to segregate premiums 3) failure of judicial manager to identify a solution for ECCU policyholders 4) insulation of CIL estate and Currency Union governments from stage 1 related costs and 5) dissatisfaction with judicial manager.
Gonsalves was mindful to stipulate that the proposed bill does not include monies which are due from the government of Trinidad and Tobago, but rather addresses monies that the judicial managers of BAICO and CLICO received through “court processes and through getting resources from the assets of BAICO.â
“The monies which are due from Trinidad and Tobago – the US$64 million – those monies do not constitute part of the distribution process under this plan or arrangement. That is a matter which is dealt with through the Currency Union by the judicial managers, and with the guidance of the core committee assisting the insurance sub-committee of the Monetary Council,â he outlined.
As the Chair of the insurance sub-committee of the Monetary Council of the ECCU, Gonsalves said that the financial fiasco has “caused great anxiety and hardshipâ to ECCU policyholders, but a lot of progress has been made on the matter.
“To date, we have achieved much but much remains to be done!â
In an article in the Trinidad Guardian, dated July 20, 2015, Prime Minister Gonsalves was quoted as registering a “vigorous objectionâ on behalf of the ECCU to the proposed “Barbados-onlyâ plan put forward by CLICO judicial manager Deloitte Consulting Ltd.
Although the Barbados Minister of Finance Christopher Sinckler denied that the plan only addressed the needs of Barbados policyholders, PM Gonsalves said that an independent assessment of the proposal was necessary, which should “examine the risks and costs of the proposal to policyholders in the currency union⦠so that the interest of the currency union policyholders are properly considered in real-time and before key events occur that may be irreparable.â (JSV)
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