‘Deal with Clico now’
By Andre Bagoo Thursday, March 7 2013
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PUBLIC SERVANTS who were initially skeptical over the approach by the management of CL Financial (CLF) requesting State support in 2009, were instructed by former Prime Minister Patrick Manning to enter into an agreement and “deal with this situation expeditiously”, according to evidence submitted to the Colman Inquiry yesterday.
Permanent secretary of the Ministry of Finance Alison Lewis told commissioner Sir Anthony Colman when CLF had first approached the State she was, up to January 16, 2009, not persuaded that the State would intervene because she was not seeing documentation to backup claims of assets being made by CLF officials. However, after a meeting with the Prime Minister – alongside other officials – at his residence on January 24, 2009, things changed.
“For my part, I was surprised that the CLF Group, which always represented itself to be asset rich, had a liquidity problem. I was not yet persuaded that Government’s intervention in any way was necessary,” Lewis said in a witness statement tendered into evidence and read out yesterday. In her statement she continued, “I was concerned about the lack of documentation to substantiate much of what was being represented. I was concerned because of the size of the CLF Group, there was every possibility that if what was represented was correct, then it could have a severe impact on the economy of Trinidad and Tobago as well as many countries throughout the Caribbean.”
Questioned by attorney for the Vincent Nelson QC over the meeting of January 24, 2009, with the Prime Minister, Lewis said at an earlier meeting, Manning had asked for the matter to be handled quickly.
“The Prime Minister had indicated that we would deal with this situation expeditiously. The meetings that were held, he had asked to be advised on what had transpired at the meeting and it was in that context that we met on January 24, 2009,” she said.
In her 35-page witness statement, Lewis adds, “I attended a meeting with the Minister of Finance, the Governor and the Prime Minister at his residence. The purpose of this meeting was to bring the Prime Minister up to speed as to what had come to light during the various meetings. The discussion centred around the systemic risk to the financial sector and the possibility of a run on CIB and Clico. It was emphasised that what was required was decisiveness, speed, and it would seem, liquidity support.”
Lewis continues, “The Governor estimated the required liquidity support would be in the region of $5 billion. It was agreed that this support was likely to be necessary and further at this point we were all convinced the CLF Group had significant assets which could be used to repay any such support. The prime minister instructed that an agreement should be negotiated with the CLF Group bearing in mind these matters.”
“The following day, Sunday, January 25, 2009, the Minister of Finance and I, along with representatives of the Central Bank of Trinidad and Tobago, met with Mr Duprey and the officers of CLF,” she adds.
The inquiry continues today with testimony from Securities and Exchange Commission (SEC) general manager/general counsel Norton Jack.