History repeats itself
ANDRE BAGOO Sunday, July 10 2011
FROM the back of the courtroom on the second floor of the Winsure Building in Port-of-Spain, you can get a good view of the headquarters of CL Financial. Through a large window, the glossy surface of the building reflects clouds and appears to sit perfectly between adjoining office blocks.
The CLF offices did not always look as they do now now. Months before the CLF/Clico collapse, the group was embarking on renovations. The grey 60s art deco structure that had been an image of financial power for decades was replaced, encased with the glass and steel that has come to dominate modern corporate offices.
The message of that renovation was bold. It was a message of change, of bringing the company into a new decade and, perhaps most importantly, it was a message of ongoing prosperity. The mere fact that the company was embarking on a protracted and expensive remodelling suggested management had faith in its longevity and the company had resources to fund the renovations. It was an audacious act of self-promotion in the face of what was to come.
This week at the Winsure Building, as the Sir Anthony Colman Commission of Inquiry into Clico/HCU continued, there was relatively little talk of the plight of Clico policyholders, barring three witnesses who appeared. Instead, we mostly heard the unbearably sad tales of HCU members.
A man said his grandfather died after the shock of learning of the HCU collapse, a woman said her mother died. Life savings and futures were lost, lives forever changed.
When the next phase of the inquiry resumes in September, this country will be marking eighteen years after the Central Bank, in an extraordinary edition of the Gazette published on Sunday September 12, 1993, announced that it was assuming further powers over the Trinidad Cooperative Bank (TCB) in order to handle assets. Years earlier, in 1986, the Bank had first intervened in TCB, which was known as the Penny Bank.
TCB was incorporated in 1914 as a savings institution “to inculcate the virtue of thrift and to provide a quick, easy, safe means for children and poor people to save”. The irony of this bank failing is one of history’s cruel tales. People, lured by their own discipline and impulses to save for a rainy day, put all their money in an institution meant to protect them. It is a tale the country heard over and over again this week as we watched the Colman Inquiry.
The collapse of the Penny Bank was just a prelude in a series of meltdowns which saw a total of three institutions falter. Out of the ashes of these three came First Citizens Bank. But many lost so much along the way: like those who got ten cents to the dollar. Another irony of history is that both Clico and the Penny Bank had one thing in common: the dream of Cyril Duprey, the Clico founder and an early Penny Bank director.
A key aspect of the Colman inquiry thus far has been the repeated idea that nobody was to blame, an idea written all over the opening statements of the regulating bodies who are party. The Central Bank said it exercised careful scrutiny over Clico, the SEC said it was not asleep at the wheel, the Commissioner for Cooperatives said credit union law is archaic; auditors PricewaterhouseCoopers said they only acted on information provided them. As one esteemed senior counsel put it, “this is fast becoming the pass the buck enquiry”. And as the wheels of time turn, the vulnerable, no doubt, will continue to pay. Email: email@example.com