August 12, 2017 Jwala Rambarran 6Comment

Foreword

George Orwell’s renowned novel Animal Farm, a satirical tale about Stalin’s brutal reign after the second Russian revolution, could easily be mistaken for a description of the state of governance today in Trinidad and Tobago.

The main villain in Animal Farm is Napoleon, a rather large, fierce-looking boar, who after the revolution emerges as the leader through cunning and manipulative tactics and convinces the animals that his actions are actually in their best interests. Napoleon’s foremost accomplishment is to abridge the seven commandments of Animalism to, “All animals are equal, but some animals are more equal than others.”

Another villain in the satirical tale is Squealer, the small, white pig who serves as Napoleon’s second-in-command and his minister of propaganda. Squealer uses hollow but convincing rhetoric and language to justify Napoleon’s actions and policies to the animals and spreads false statistics pointing to the farm’s success.

Playing a supporting but nevertheless critical role is Mr. Whymper, a sly-looking man hired by Napoleon to be the liaison between Animal Farm and human society. At first, Mr. Whymper acquires things the animals cannot produce on the farm such as dog biscuits and paraffin wax, but eventually he is used to procure luxuries like whisky for the pigs, profiting from the animals’ misery and suffering.

The building of a windmill (a literary code for an impossible dream) is at the centre of political arguments that take place on Animal Farm, and which Napoleon realizes he can use to manipulate the animals for his own gain.

Animal Farm is epitomized in so many ways in Trinidad and Tobago, but its symbolism and themes are clearly recreated in the unfolding mess that the Rowley PNM Government is making with CLICO and the perceived No Man’s Land fiasco.

 

Chapter 1: Napoleonic Self-interest

The story of CLIQUE-O Farm starts with Prime Minister Rowley who, in true Napoleon style, appears as though he wants to build his own windmill, perhaps as a hollow monument to his legacy, and it seems he has further trampled on the independence of our Central Bank and disregarded the law to secure that legacy, apparently aided and abetted by Squealer in the Ministry of Finance Tower and by Mr. Whymper in the Central Bank Tower.

The Prime Minister foolishly thinks boosting the number of high end hotel rooms in Tobago will bring in tourists and is negotiating with Sandals to build a hotel beach resort at the 398-acre Buccoo Estate in Tobago, which is considered prime property since it includes No Man’s Land, a secluded strip of pristine, white coral-sand beach bordering the world famous Buccoo Reef and Nylon Pool.

Up to the beginning of this year the Buccoo Estate in Tobago, more commonly known as No Man’s Land, did not belong to the Government. It belonged to CLICO, a failed private insurance company under the legal control of the Central Bank.

How then could the Government be negotiating with Sandals to construct a hotel resort on a property owned by a private company under direct control of the Central Bank?

No Man’s Land was quietly sold.

 

Chapter 2: Whymper’s Whisky

To understand the full extent of this mess, we must go back eight and a half years ago to February 2009, when the Central Bank assumed control of CLICO, the country’s largest insurance company, in accordance with its special emergency powers under Section 44D of the Central Bank Act. The Central Bank considered this regulatory action necessary to safeguard the interests, and to preserve the rights of CLICO’s policyholders and creditors.

The one basic principle you must remember when dissecting this less than translucent sale of No Man’s Land is: Central Bank’s actions in the management and control of CLICO’s affairs must first and foremost be about protecting the interests of the company’s 100,000 odd traditional insurance policyholders, not about seeking the interests of Government. This duty of care also applies to the acquisition or sale of any property, asset or shareholding of CLICO.

Now ask yourself, did the Central Bank Governor act in the best interest of CLICO’s policyholders when No Man’s Land was quietly sold off earlier this year? The key words in this question are, “best interest”, “quietly”.

Before you start answering let me repeat, any action the Central Bank undertakes with respect to CLICO must be about protecting CLICO’s traditional insurance policyholders who hold life insurance, pension and health policies with the company.

My position is the Central Bank Governor failed in his statutory duty to protect the interests and rights of CLICO’s policyholders and to protect CLICO from politicians. My position is Governor Alvin Hilaire, took the form of Whymper in Animal Farm, whilst the Prime Minister assumed a Napoleonic manifestation, unbeknownst to the rest of the farm.

The Central Bank Governor, cannot simply wake up on the farm one sunny morning and decide to sell off CLICO’s assets. The process of selling/transferring CLICO’s own assets is set in law. It not only requires oversight by the Central Bank for accountability and transparency, but also statutory independent valuations in accordance with Section 44D of the Central Bank Act and consultations with the Minister of Finance under Section 44F (5) of the said Act.

Most important of all, the law requires any sale of CLICO’s assets to be done at a price to be determined by reputable, independent advisors and at arm’s length from political interference. The Central Bank must also be convinced the asset sale is in the best interest of CLICO’s traditional insurance policyholders.

During my tenure as Central Bank Governor, I strictly followed the law when it came to selling/transferring CLICO’s assets under the CLICO Resolution Plan. This is the blueprint I had developed in March 2015, after consultation with the Minister of Finance, to repay all of CLICO’s debts to its creditors and policyholders through the sale/transfer of CLICO’s own assets, and to ultimately facilitate the sale of CLICO’s traditional insurance portfolio to a suitable buyer.

Since it was taxpayers who had funded the national bailout of CLICO, I had announced the details of the CLICO Resolution Plan to the national community so there would be full transparency and accountability to all citizens. In early November 2015, I also provided a public update on the significant progress the Central Bank had made under my watch on attaining several milestones in the CLICO Resolution Plan.

Since then, the CLICO Resolution Plan under Governor Alvin Hilaire has, to borrow a quote from his boss, the Minister of Finance, fallen “in limbo, with no apparent purpose or direction, consumed by internal power plays, inertia, dithering, apathy and stagnation.” This is tragic. If the CLICO Resolution Plan had continued to be implemented, it would have been completed by now and CLICO would have paid off the nearly $17.5 billion debt it owed to Government. There would have been no need for the Government to seek to liquidate CL Financial, CLICO’s parent company, to recover that debt.

No Man’s Land was not an asset I had considered for sale/transfer in the CLICO Resolution Plan. This asset was not meant to offset part of CLICO’s debt to Government. Instead, No Man’s Land was among those assets helping to back CLICO’s liabilities to protect its traditional insurance policyholders.

So Governor Whymper couldn’t just wake up on the farm one sunny morning and arbitrarily decide to sell off No Man’s Land. That CLICO asset was specifically picked.

 

Chapter 3: Enter Squealer

The Minister of Finance recently squealed at a press conference that it was he who gave instructions to the Central Bank Governor, who without a whimper, directed CLICO in January 2017 to transfer No Man’s Land to a newly formed state enterprise called Golden Grove-Buccoo Limited. At a valuation of $174.8 million or a selling price of roughly $10 per square foot, it is the inescapable inference that the Government acquired No Man’s Land at quite a good deal.

Based on the clandestine and cavalier manner in which the sale of No Man’s Land was done, the transaction not only appears to conceal the true substantial economic value that the Government has actually received from CLICO, but it also seems to hide the significant loss of value CLICO and its traditional insurance policyholders have suffered.

Even though under the legislative framework the Central Bank has consultative and reporting responsibilities to the Minister of Finance, the Minister of Finance cannot give instructions to the Central Bank Governor that are contrary to the Central Bank’s mandate.

The Minister of Finance cannot issue instructions to the Central Bank Governor to sell an asset belonging to a company under the Central Bank’s legal guardianship. It’s the Governor who must initiate, execute and complete this process.

This is because in law it’s the Central Bank Governor, not the Minister of Finance, who appoints the Chairman of CLICO. It’s the Central Bank Governor, not the Minister of Finance, who appoints the Board of CLICO. It’s the Central Bank Governor, not the Minister of Finance, who appoints the Managing Director of CLICO.

All directors, officers and employees of CLICO are accountable to the Central Bank and subject to any directions which the Central Bank Governor, not the Minister of Finance, might give from time to time.

In essence and by way of example, the Central Bank Governor should not break the law, even if directed to do so by the Minister of Finance. Why then does it appear that the Central Bank Governor not only allowed the Minister of Finance to give him instructions on CLICO’s affairs, but he also willingly carried out those instructions without determining whether such an action was in the best interests of CLICO’s traditional insurance policyholders?

The Minister of Finance must produce the communication that showed this directive to the Central Bank Governor on selling No Man’s Land. We must see the rationale and the argument, if indeed there could be one, which the Minister of Finance, a politician, gave to the Governor, who is responsible for an inherently independent and sacred office.

This communication cannot be considered a confidential document under the Central Bank Act. That right was forfeited when the Governor allowed a politician to trespass on the Bank’s legally protected control over CLICO.

 

Chapter 4: A Twist in the Tale

So there you have it, reminiscent of Animal Farm, Mr. Whymper and Squealer taking what does not belong to them to give Napoleon his prized windmill. The controversial transfer of No Man’s Land from CLICO to the Government shows a fundamental contempt for the rule of law which, unlike the pigs on Animal Farm, all of us are supposed to follow, not some.

Perhaps if this story ends up on a chef’s show on CNN it may evoke indignant reaction from the 99% of animals on the farm, which may cause our leaders to finally account to us and show us the respect we deserve. We the citizenry, must learn to vehemently stand our ground and demand transparency and accountability in public affairs. Too often it is the not case, so much so, it has invariably become our modus operandi.

No one has called on Governor Whymper to explain why he sold a CLICO asset at what appears to be less than fair market value and why he hid this transaction from the national taxpaying public. Some of the more vocal media mouthpieces such as Garbage Media Limited, the Don’t Owe Merchants Anything, and the Chamber of Commess are silent on this contentious matter, no different from the sheep on Animal Farm who blindly supported Napoleon during his speeches and meetings by bleating “four legs good, two legs bad”.

It seems these self-appointed guardians of democracy have all accepted they don’t need to hear anything from Governor Whymper, since it’s a given, Squealer, excuse me, his Minister will continue to do all the talking for him.

In true Squealer misdirection tradition, the Minister when he was in Opposition accused me back in June 2014 of carrying out a fire sale of CLICO assets and said it could lead to the perception that “deals are being made” to dispose of the assets. However, when he instructs the Central Bank Governor to sell the prime property of No Man’s Land at such a ridiculously low price to the Government, he doesn’t call that a fire sale with deals being made.

It is not that I am saying it is, as two wrongs do not make a right, however, I am demanding transparency and accountability, in the public interest. As a former Governor, I am hellbent on the highest standards of integrity. Fire purifies, but the Minister is doing the opposite, tainting everything he touches, the economy, the Central Bank, CLICO.

CLICO’s dealings with the Central Bank are, as Section 56 of the Central Bank Act recognizes, intrinsically confidential. The circumstances in which the Minister of Finance obtained CLICO’s valuation report on No Man’s Land imposes on him a common law duty of confidentiality in relation to CLICO’s affairs. Yet, the Minister appears to have breached his fiduciary duty to preserve the confidentiality of that information by sharing the valuation report with his Prime Minister.

Similarly, CLICO’s dealings with its customers are also intrinsically confidential under both the Central Bank Act and the Companies Act. Again the Minister of Finance appears to have committed an egregious breach of the law when he disclosed the private confidential information of a former CLICO policyholder, not only identifying the number of policies which the policyholder had with CLICO but also the payments made to the policyholder after he accepted Government’s offer in 2012 to “buy out” his policy rights.

Not to be outdone, at a televised address to the nation Prime Minister Rowley not only quoted extensively from the CLICO valuation report to support his case that the Government did not unduly acquire No Man’s Land from CLICO but, even more alarming, he also left a copy of the report for the media to examine.

The Prime Minister might argue he revealed CLICO’s confidential information in the public’s *cough cough* interest. Sounds familiar. Well, it sure does to me. The Prime Minister should fire his Minister of Finance and then fire himself for misconduct in public office, for breaching the Companies Act, and for revealing CLICO’s confidential business.

Where are Farrell, Abdullah and Balgobin who, like Napoleon’s vicious guard dogs on Animal Farm, were baying and barking for their leader Rowley to fire others when they alleged that certain confidential information was released? Perhaps they are too busy still trying to come up with an economic diversification plan for the country, after sitting for almost two years on the Economic Advisory Board, another pet project of the Prime Minister.

 

Chapter 5: A Sad End

As a former Governor of the Central Bank under whose care CLICO falls and as the architect of the CLICO Resolution Plan, I am extremely troubled about the abject failure of the current Central Bank Governor to protect CLICO policyholders, as he is legally required to do.

The Central Bank Governor must respect and uphold the rule of law. But then again this is a Governor who it appears does not even know he has powers under the Central Bank Act to regulate bank fees.

All this mess with CLICO is happening while the Central Bank has functioned for the past 20 months without a substantive Inspector of Financial Institutions, duly appointed by the President in accordance with the Central Bank Act. Instead, the Governor seems to have again thumbed his nose at the law, making temporary six-months “URP-style” appointments of an Inspector under the Financial Institutions Act.

Given the perceived heavy and high-handed political interference of both the Prime Minister and Minister of Finance in the No Man’s Land fiasco, any policyholder or creditor of CLICO may now mount legal challenges to the Central Bank, seeking a judicial review of the property transaction.

The shareholders of CL Financial can also sue the Government for shareholder oppression and interference with their constitutionally enshrined right to enjoyment of property. Such lawsuits would further delay and complicate CLICO’s resolution.

George Orwell, the author of Animal Farm, believed the Soviet Union under Stalin had become a brutal dictatorship, built upon a cult of personality and enforced by a reign of terror. Trinidad and Tobago, under this current Government, is in a headlong descent into becoming the new Animal Farm.

6 thoughts on “CLIQUE-O Farm: Another Ferry Tale

  1. Keep fighting for your and our rights, Peter. As usual, I am always with you.
    Losers will lose and winners will win.

  2. Your version of “Animal Farm” is far better than the original! We can easily relate and understand what is happening in our country…sad indeed once our Paradise, only filled with toxic people and governance, who is absolutely clueless, and abuse their power in office!

  3. Well done .Its been quite a while since i have had the opportunity to read and appericiate an article while amusing informative and satrical at the same time.

  4. This is such an informative article that should provoke an immediate investigation on yet another scandalous affair thats brewing within the Rowley Camp!
    Im very surprised that our so called “Journalists” have not grabbed this and plastered it across the Daily News as they did with this gentleman’s face on the front pages of their newspapers for weeks crucifying him for the forex problem which he was able to control unlike the present Governor who has made a complete mess of it.
    The former Governor was the man who developed the plan on how to deal with Clico and their assets.
    How is it that this asset, this large prime parcel of land called ” No Mans Land can be secretly sold?
    Who sold it?
    When was it sold?
    Who gave the authorization to sell this property?
    Why have not one journalist published this?
    Why Are we, the People of TT left in the dark about this?

    We must thank this former CB Governor for still caring for the people of Trinidad and Tobago and trying to keep sheep Rowley from pulling wool over our eyes.

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