Creating a Context – the role of planning

investment-decision For me, the key point at which we lost our way in the UDeCOTT/HDC/NIDCO bobol, was the crossroads of the Investment Decision.

That Investment Decision is an indispensable part of any rational process of development, for families, businesses and countries alike. The national level is my concern and there must be broader considerations in making those decisions.

It is clear from the depth of the failure, that the last administration lost its way completely, insofar as elementary concepts such as opportunity cost, payback periods, cost-benefit analysis and so on. We have only now begun to scratch the surface in terms of understanding the extent of the losses and corruption – readers, please be reminded that as yet, we have no accounts for UDeCOTT or HDC for several years. In normal business thinking, the failure to publish accounts without even an attempt at an explanation is tantamount to an admission of the most serious problems. Only State-owned organisations can get away with that kind of irregular conduct, which is maybe why they do it.

My concern in this article, is that apart from the Investment Decision in the case of specific projects, the State has an obligation to consider the wider picture in terms of fine-tuning, timing and phasing those projects. Our last land-use plan in our country was approved by the Parliament in 1984 and we have had several fruitless attempts to revise that plan.

The focus here is on the need for a proper practice of integrated planning, in particular long-term land-use and town-planning. By integrated planning I am speaking to an approach which takes account of varying principalities, such as land-use, financial constraints and national targets. In addition, the approach allows a balance to be struck between the competing demands within various time-horizons, such as immediate demands, medium term demands (say, 10 to 20 years) and longer-term considerations.

Lack of an updated national Land-use plan
As I wrote in the Business Guardian of 9^th October 2008 –

Dr. Emily Gaynor Dick-Forde, former Minister of Planning, 2007-2010

“The Minister of Planning, Housing and the Environment spoke at a breakfast meeting of the Couva/Point Lisas Chamber of Commerce on September 10, and some of her reported comments deserve our close attention.

The minister told her audience that the National Physical Development Plan was passed in 1984 and had been continually updated, but that “that plan has somehow never reached to Parliament.” Somehow. The mind boggles.

One report said, “Dick-Forde said the external and internal committees on national development were working towards the completion of the National Development Plan, which will be taken to Parliament in the next two years.”

When this tidal wave of development is at an ebb, we will then have a plan tabled in Parliament for discussion. To what end?” see http://www.newsday.co.tt/politics/0,85974.html

Given the last Minister’s stated timetable, we ought now to be having a draft plan published for consideration. Where is this, Minister King? When do the consultations start?

Transportation planning

Austin 'Jack' Warner, MP, Minister of Works & Transport

This is a vital, related area and Minister of Works & Transport, Jack Warner, told us that the PNM government paid $21M for an incomplete Comprehensive National Transportation Study (CNTS) – see http://guardian.co.tt/news/general/2010/10/09/warner-pnm-paid-21m-non-study – and I agree. That fact only makes the situation more doubtful, since we seem to be making major transportation system decisions in the absence of a strategic plan.

Just consider –

The Tunnel to Maracas
This was first announced in the 2011 Budget – see http://www.finance.gov.tt/content/Budget%20Statement%202011.pdf at page 24

…We all know how difficult it is to access Maracas Bay through the North Coast Road.

Currently, it takes approximately 45 minutes to get from Santa Cruz to Maracas Bay. Furthermore, landslips on the North Coast road are a major deterrent to persons wishing to access this scenic route for pleasure or business. As a result we will do a business plan for a new: ‘Connective Development Project’. This project would create an underground tunnel from Maracas Valley to Maracas Bay, to enable quicker access to the North Coast…

That strange project was then taken up by Warner at length – see http://guardian.co.tt/news/general/2010/09/26/warner-s-tunnel-take-next-year
The expansion of the Highway Network
We are now aware that the National Infrastructure Development Company (NIDCO) is proceeding with ambitious Highways packages from San Fernando to Point Fortin, with the San Fernando to Mayaro route under active discussion – see http://www.newsday.co.tt/politics/0,124988.html.
Coastal Water Taxis
It seems that the government has changed its mind, three times, on this part of our public transportation system. Firstly, we were disposing of two of the four new water-taxis as being superfluous. Secondly, there was an about-face, in which it was decided to keep the new water-taxis. Most recently, I have seen advertisements for the provision of brokerage services for the disposal of these vessels. Again, what is the basis?

Sewer Treatment plants and the threat of cholera
We recently had shocking stories about the leaking of significant amounts of untreated sewage into the Maraval reservoir – see http://guardian.co.tt/news/general/2010/11/19/wasa-boss-moka-residents-must-pay-repair-sewerage-plant. That is no surprise, given the widespread practice of property developers walking away with their profits in hand upon completing the sales of their properties, but with no proper plan for the maintenance of the sewer treatment plants.

Once again, this is an area which urgently needs to be addressed in terms of town planning, local health, WASA regulations and adequate financial mechanisms for ongoing maintenance of these facilities.

The Housing Development Corporation (HDC)
The HDC’s new target for 2011 is 6,500 new homes and that is still a huge number. Given our limited land resources and the absence of a national planning framework, how is this to proceed?

There remains the unanswered question as to what is the basis for these decisions?

The Limits of our financial resources

The Minister of Finance recently called for Ministries to not implement any new large projects, due to the financial limits constraining state expenditure – see http://www.newsday.co.tt/news/0,129148.html. That is a valid call, which shows that the time is ripe for us to plan our major strategies and projects so that they can conform to some sort of national context.

That context would have to include elements such as land-use, transportation implications, financial limits and the question of the capacity of the economy to meet the targets being set.

SIDEBAR: Fuel subsidies in national planning

The question of fuel subsidies is an important part of this integrated planning discussion, since, at approximately $2.8Bn, they are a large part of our national expenditure. More to the point, the effect they have on our behaviour is largely unremarked, which is paradoxical – the gas price being so low that we do not really consider it in our daily choices.

It is a classic example of the sort of ‘policy silos’ which the integrated planning approach seeks to overcome.

The Minister of Works & Transport speaks out strongly against the heavy subsidies necessary for the operation of the Coastal Water Taxis – no statement from Warner on the larger sums spent on the fuel subsidy. The Minister of Energy, in the run-up to the budget, says that these fuel subsidies may need to be reduced. The Minister of Finance, in his budget address, said –

“…The largest Subsidy is on petroleum products, particularly gasoline which usually represents one to two percent of GDP per annum. All of our citizens benefit from this subsidy. It is often difficult to determine whether resources are being used wisely to achieve the intended objectives of subsidies. We are currently reviewing whether alternate options are more efficient…”

We need to develop a holistic view of the various subsidies being paid in our economy and transportation subsidies, including fuel, are important considerations.

The goal of promoting the wider use of public transportation has to be adopted with some vigour and creativity. The fuel subsidies enjoyed by small vehicles – say, less than 12 passengers – should be gradually reduced with a shift of those subsidies to larger-capacity vehicles. They make more efficient use of our limited roadways and would reduce the adverse effects of traffic and pollution.

The three Ministries concerned should join with the Ministry of Planning in mapping out these strategies and policies.

The strategic goal should be to decrease the convenience of individual car-journeys and increase the convenience of the mass-transit approach.

It is no easy shift to go from today’s congested reality to the medium-term goal of a much-improved transportation system with travelers having several choices. That journey would involve a virtual culture-shock for most of us, but it is one we should start, sooner than later, for our common good.

That is one of the examples of how an integrated planning approach can offer fresh solutions to serious problems.

CL Financial bailout – Testing the Code of Silence

The Code of Silence has formed the subject of several columns in this series.

I am referring to the unwritten agreement amongst the leadership group in our society to maintain silence in matters of white-collar crime. The guiding principle of the Code being that the members of that group must never be exposed to the same scrutiny and penalties as the common criminal.

That Code of Silence is poisonous to the progressive development of our society. Unless we can bury the notion that white-collar crime pays, our society is doomed to lurch from crisis to crisis. White-collar crime will never be truly challenged until the Code of Silence is tested to destruction. I welcome anything which would dismantle the Code of Silence. Literally anything.

The Commission of Enquiry into the various financial collapses which have beset us – Clico, British-American, Clico Investment Bank, Caribbean Money Market Brokers, the CL Financial group and the Hindu Credit Union – was announced by the Prime Minister in her 1^st October address to Parliament.

On 17^th November, Sir Anthony Colman QC was sworn in as the new sole Commissioner – he replaced the original choice – Sir Gavin Lightman QC, who had an apparent conflict of interest. The Secretary to the Colman Commission is Judith Gonsalves, who served the Uff Commission in that role. It is reported that Colman intends to hold open hearings and that those should start sometime in this month.

So, we are seeing three powerful channels emerging –

CIB winding-up action – ongoing litigation from National Insurance Board and National Gas Company to stop the Central Bank’s winding-up action. Those court actions have been set for hearing in April and the sum of money at stake is an estimated $1.8Bn.
Policyholders challenges – The various policyholders’ groups have now declared their intention to take legal action to recover the monies they feel are owed to them. The sum of money at stake in that series of actions is estimated to be $12Bn.
The Colman Enquiry – This is an overall, public investigation into the causes of the large-scale financial collapse as listed above. Given the continuing failure to produce the accounts, the total sums of money involved are unknown.

So, what is the likely effect of these lawsuits and the oncoming Colman Commission of Enquiry on the entrenched Code of Silence in our society?

To begin with, I expect a series of legal challenges to the very hearings of the Commission, with the likely grounds being the long-established principle that no person should suffer ‘double jeopardy’, in terms of two sets of charges to be answered. It will be an attempt to completely derail the entire Commission of Enquiry.

I would not be very surprised if certain state agencies also sought to shut the enquiry down. That would be a repeat of the unprecedented recent situation in which UDeCOTT went to court to challenge the Uff Commission.

The beneficiaries of the Code of Silence will make great efforts to avoid any deep examination of its members and the public needs to be alert to this point. There is absolutely no shame in that group and we should also prepare ourselves mentally for the ‘memory loss’ defence of the kind we saw from Hafeez Karamath in the recent Uff Commission.

After generations of operating unexamined, the very bowels of the society’s leaders are about to be opened up to a disgusted and skeptical public. The motivations, links and payoffs between these leaders are to be exposed to view. The exposure is going to be critical. Given the speed with which our legal system operates, the exposure is likely to be lengthy. Given the range of active media in our society, the details are going to be all over the place.

So, what is at stake here? What else can we expect, apart from legal challenges?

To begin with, I believe that the sums of money involved are several times more than in the Uff Commission. In addition, the slowing economy and the pattern of behaviour have set the public into a very critical mood.

In my view, these are some of the people we would see publicly cross-examined in the Commission of Enquiry and various lawsuits –

Lawrence Duprey

Most important of all, the Chief of Chiefs, Lawrence Duprey – Will he or won’t he show up for the many hearings? What can we expect to hear? Can Duprey offer an explanation for the shocking discrepancy between the $100BN+ asset valuation as at the end of 2007 and the $23.9Bn asset value he specified in his letter of 13^th January 2009 to Ewart Williams? A mere 56 days separate the publication of those 2007 accounts – on 18^th November 2008 – from Duprey’s letter, which has been hidden from view, despite my two Freedom of Information applications. The only reason we have some idea of this discrepancy – no…that is the wrong word, maybe staggering decline is better – is the anxiety of the then Minister of Finance to clear her name from allegations of Insider Dealing. That anxiety led the Minister to read this letter into Hansard on 4^th February 2009.
Andre Monteil

Second most important of all, the Chair of Chairs, Andre Monteil – Monteil is now in retirement as a farmer and his testimony is surely one of the most awaited in recent times. As former PNM Treasurer, CL Financial Group Finance Director, Chairman of Education Facilities Company, National Housing Authority, then Housing Development Corporation and Clico Investment Bank, it is difficult to imagine a player who was more central. It is almost like a spy movie called ‘The Man who knew Too Much’.
Patrick Manning

Patrick Manning – When one considers the huge donations reportedly made by CL Financial to the PNM and the tangled web of this entire affair, it is difficult to see how Manning can escape serious, hard questions on many aspects. For instance, his 2002 decision to stop enquiries into HCU by then Minister in the Ministry of Finance, Conrad Enill, will surely be open to question. Manning’s recent bizarre behaviour might well be the beginnings of a defence. We will see.
Karen Nunez- Tesheira

Karen Nunez-Teshiera – The Minister of Finance who had to go to Parliament twice to attempt to clear her name in this matter. Firstly, from allegations that she withdrew her money from CIB early, having had inside information. Secondly, from allegations that as a CL Financial shareholder, she was biased in her dealings with the bailout, having failed to recuse herself from the discussions. Not one person I know, even blindly-loyal PNM-ites, is willing to openly defend the behaviour of Nunez-Teshiera. Not one. Imagine that. I think the phrase is “…A jury of one’s peers…” I wonder whether her Cabinet colleagues knew that the Minister was a shareholder? We won’t have to wait long.
Carl Hiralal

The Regulators – from both the Supervisor of Insurance, and the Inspector of Financial Institutions, Carl Hiralal. Just imagine the Supervisor explaining how Clico kept its licence all those years its statutory fund in serious shortfall. Or the Inspector justifying how CIB can fail to file its tax return and yet keep its licence. Mr. Hiralal must be considering his position most carefully at this point.
Ewart Williams

Central Bank Governor – Imagine Ewart Williams reconciling his several statements on Clico being a problem case since 2004, with his having two fixed deposits at CIB. Williams must also be having a few reflective moments.
The Directors – What is to be the position of the Directors of these failed companies? According to an affidavits filed in the Central Bank’s winding-up action, CIB made an undocumented loan with no interest rate or repayment period agreed. That loan was in the sum of $162M USD – yes, about $1.03Bn of depositors’ funds were lent to Angostura (a related party) with no documentation. It would be interesting to hear the Directors explain the degree to which that sort of advance is compatible with their fiduciary duty. It is important to note that the phrase fiduciary duty in this case refers to the obligation of those CIB Directors to act with the depositors’ interest as their first priority. But remember that CIB was wholly-owned by CL Financial. So, can one properly reconcile the fiduciary duties owed to depositors with those owed to the sole shareholder? It is a veritable conflict to be loaning depositors’ monies to the main shareholder, but that is why the loan agreements and credit committees exist. So as to provide safeguards against incautious loans, which can jeopardise depositors’ funds, so as to ultimately destabilize the bank itself, as in this case. There was no agreement. None at all. For a loan exceeding one billion dollars. All of the safeguards to balance the several duties of the prudent Director seem to have been ignored in this situation. Just imagine the Chairman who presided over the meeting of CIB’s Board which approved that loan, answering a series of critical questions, explaining just what they were doing dispensing with depositors’ funds in that loose fashion. I can scarcely wait.
The Auditors – The various PWC professionals who prepared and signed those audits. Will we see the release of the hidden accounts? How much longer can they remain concealed? There must be some quiet desperation creeping into Balisier House and PWC, just edging forward, along Victoria Avenue.
Robert Mayers

Robert Mayers – When he retired on 7^th December 2008, did he or did he not know that Caribbean Money Market Brokers (CMMB) was heading for a financial collapse? Of course, we now know from the official statements that CMMB collapsed a mere 7 weeks after Mayers left office as its Managing Director. So, which is it to be? Is it that the collapse came like a bolt of lightening from a clear blue sky? Were there any warning signs? Do CMMB’s accounts give any clues?
Dr. Bhoendradatt Tewarie

Dr. Bhoendradatt Tewarie – He is former principal of UWI’s St. Augustine campus and now heads UWI’s Institute for Critical Thinking. Dr. Tewarie was a Board Director of the parent company, CL Financial, at the time of the collapse. Was he aware of Duprey’s letter to the Central Bank Governor, a mere 3 days before that Board authorized payment of a dividend to CL Financial’s shareholders?
The same characters and many of the same questions are in the HCU part of the story.

The members of that Code of Silence are probably considering how best to escape the consequences of their actions and inactions. It will be a truly unique Christmas season for some of them. There are probably not enough lawyers in the country to handle this tidal-wave of legal actions.

The stakes are huge and the burning question for me is – Can this be the first time that prominent people go to jail? Serious sentencing? Will any stolen monies be recovered?

Can the Code of Silence survive this challenge?

The Code of Silence must be destroyed if we are to progress.

SIDEBAR: Who is Anthony Colman?

Take a read at his comprehensive website including his CV. http://www.siranthonycolman.com/

CL Financial bailout – Amazing scenes

Winston Dookeran vs Peter Permell. Original photo courtesy Trinidad Guardian. Illustration by NiCam Graphics The new situation is charged with peril and one is reminded of Naipaul’s father, the intrepid journalist from A House for Mr. Biswas whose favourite tagline was “…amazing scenes were witnessed…”

Finance Minister, Winston Dookeran, addressed Parliament on the Finance Bill (No. 2) 2010 on Wednesday 24th November. It was a lengthy and detailed statement, which put things into a necessary perspective. For me, it was important that Dookeran gave priority to the claims of the contractors and of course, the last item being the claims being made by the various groups representing Clico policyholders.

The Finance Minister held his position as set out in the 2011 budget, which was no surprise when one considers his statement that the various submissions received from the policyholders’ groups did not withstand scrutiny. I only had two significant concerns in terms of outstanding items which require proper attention.

The first of those was the continuing failure to produce the audited accounts for the CL Financial group – by now the 2008 and 2009 accounts are long overdue. The absence of those important figures means that the many heated discussions taking place, in the media and privately, are all uninformed. The questions are simple – Are the 2008 and 2009 audits for the CL Financial group completed or not? Yes or no? If they are, when are they to be published? If not, what is the problem with completing these?After all, as I wrote about the 12th June 2009 CL Financial Shareholders’ Agreement in this space on 1st April 2010 –

…Clauses 2.3.3 and 2.3.4. of the SA, require the outgoing CL Financial chiefs to render all assistance to the incoming Board and Management in terms of all records and accounts etc. The question here is ‘Have the new Board and management been receiving the full assistance of the previous CLF chiefs?’ If not, what is being done about it?…
The second concern I had was with the special window being opened to assist the Credit Unions, some of whom had invested in excess of 10% of their funds in the EFPA, an annuity approved for individual investors. We need to know just which Credit Unions took those imprudent investment decisions. There is no way we can merely legislate or pay our way out of this crisis, the problem runs deeper, into fundamental matters such as the attitudes of the leadership group in the society. Some of those details might emerge during the upcoming Commission of Enquiry, but it would be to Dookeran’s credit if he released the names of those Credit Unions and the amounts to be refunded.

The immediate statements of the Clico Policyholders’ Group (CPG), which targeted Dookeran, are a perturbing sign. For whatever reason, the CPG is ignoring the settled principle of Cabinet’s collective responsibility. That stance seems to be detrimental to effective negotiation and I am beginning to wonder if some person or persons in the Cabinet is ‘giving them basket’.

The threatening statements from the CPG as to the damage their proposed lawsuit can do to our country’s economy are nothing less than scandalous. We are now witness to a grim game of brinksmanship.

We have all heard the arguments and rumours surrounding this bailout, so no point repeating those. It certainly seems that those are going to be ventilated in a high-profile series of lawsuits. I only hope that the hearings remain open and do not take place in a sealed Court. That is what happened in the very first lawsuit after the bailout, in which the Central Bank was attempting to get CL Financial to comply with the terms of the bailout. The stakes are too high now for any concept of privacy to prevail in this matter.

The Minister of Finance also announced that the conditions under which the financial relief would be offered were being considered and it is good to know that there is to be no unconditional relief at our collective expense.

My thoughts on that aspect are that the State must conduct itself in an exemplary fashion and not be placed at any further disadvantage, having already shouldered this enormous, exceptional payout.

There are now anti money-laundering (AML) laws which require depositors to make declarations as to the Source of Funds, all in an effort to prevent the proceeds of crime from entering the legitimate economy. In my view it is necessary for the government to be satisfied that the various sums being claimed by these policyholders were properly declared under the AML laws. We have had shocking reports about the elementary management controls which were either absent or awry in the CL Financial group, so it would not surprise me if their AML-compliance was lax. That needs to be thoroughly checked. It would not be acceptable for our taxpayers’ monies to be used to rinse ‘dirty money’.

Also, the claimants who owe on their taxes – VAT, PAYE, Corporation Tax, Income Tax and so on – should not be refunded. As Dookeran said in that address, if everyone paid the taxes due, our budget would not be in deficit. We cannot go deeper into deficit without these elementary precautions being taken.

Finally, there is the issue of the many borrowers from Clico, British-American, Clico Investment Bank (CIB). In the case of CIB alone, we are told that about $1.0Bn of those loans are ‘non-performing’ – which means that the borrowers are not repaying their loans. It would be perverse for some of those non-performing borrowers to receive refunds from the State. This is a live part of this situation, since in the case of CIB itself, the very Inspector of Financial Institutions swore in his affidavit filed in the winding-up action for that failed bank –

…With respect to the Creditors of the Petitioner, the Petitioner has met the statutory obligations for the Board of Inland Revenue (except for Corporation Tax Returns for 2007, 2008 and 2009 which are being prepared and remain outstanding)…

That is a glaring example of the kind of wanton wrongdoing at the heart of this mess. CIB fails to file its Corporation Tax returns for three years, yet keep their banking licence and arrange for the taxpayer to bail them out when it all goes sour.

Some claimants may try to invoke the ‘corporate veil’ to shield themselves from various breaches committed by their companies, but this is an exceptional situation in which the State is making an offer. In my view, the corporate veil ought properly to be ignored, so that the long-standing commercial principle of ‘set-off’ can be applied to the claimants.

The Colman Commission of Enquiry and its effects on the Code of Silence will be my next topic.

The State of the Media

The recent series of changes at CNMG have sparked a series of evolving discussions. I was one of the three people ‘let go’ from CNMG and that was reported briefly on my blog.

I am starting to reflect on some aspects of all this recent interest, but no, this not an anti-PP column or one about how wicked politicians are and so on.

What kind of talk is that?
The first thing that occurred to me is how the media conversation has blown up in sheer size and how that has had an effect on the quality of our national conversation.

In the so-called ‘good old days’, before the shift I am about to describe, the only people who really had a voice in our society were those who were approved, such as government ministers and their spokespersons, established journalists, the ‘great and good‘ and of course the brave and imaginative ones who were our activists. In fact, the last-named group were the voice of the voiceless, who fought to uplift our society. Of course in that group you would have to include the leading calypsonians and ‘troublemakers’ of their era.

From its beginnings about 20 years ago, we have moved far from the post-independence period in which the voices heard on the national media of Radio and TV were very limited. The NAR regime 1986-1991 decisively brought that to an end with the grant of more broadcast licences and the real birth of ‘talk radio’. TV call-ins soon followed and of course, the internet/email broke onto the scene in the mid-1990s. The final stage in this progression is the growth of new-wave social media – such as Facebook, YouTube, Twitter etc. – to the point where they have now eclipsed the older formats like web-pages.

As a result of all that, we now have many people, who never had a voice as individuals, being able to project their ideas onto a huge stage. That is literally unprecedented. The new conversation has opened up serious new challenges and opportunities.

One of the most detrimental of our habits is mauvais langue – just plain bad-talking people behind their back, but not showing it when you meet those same people. As young people would say – Pure hate, just acting normal.

I hold the view that mauvais langue is the biggest cultural obstacle to our development as a nation. I say that because it is my view that without an open exchange of ideas, the possibility of change is very limited. In this new situation, someone can add a mischievous or irrelevant comment to the discussion, without ever identifying themselves or backing-up what they are saying. As a result of those possibilities and its combination with our habits, we now have most of our blog commentators and callers-in choosing to remain anonymous.

But what are we saying to each other? The essential message of a large number of the comments on these T&T blogs boil down to ‘Shut Up…I don’t agree with you and don’t want to hear what you have to say…Go away!‘ Our new national conversation is on a huge scale and on a range of issues which is extremely fertile, but the dominant habits of that conversation are perturbing.

To be fair, there is a solid body of research to show that anonymous conversations of this type are extremely effective at finding-out the views of the public, workers or customers. Indeed, this social media is now a very important part of how progressive states and corporations take their bearings as to where things stand.

One important difference I have seen is that the blogs for newspapers and news-sites in the advanced world have almost no anonymous content – people actually write as themselves.

opm website More to the point, we have a situation where we have embraced the new situation and its possibilities, while our leaders and organisations lag far behind. Just as an example, the website for the Prime Minister is http://www.opm.gov.tt/ – the last officeholder had no publicly-available email address and that website is now temporarily offline, being under re-construction.

There is also the secondary aspect of all this, the essence of our commitment to a free press. Of course, I am talking about the silence of Newsday – ‘The People’s Newspaper which offers daily news from Trinidad & Tobago’. There was a huge response to the news on Monday 8^th November, that Fazeer Mohammed was removed from CNMG’s morning line-up. I think that article in the Express of the next day had over 825 comments – which must be some kind of local record. It is staggering to me that Newsday had nothing to say about this, until the Thursday after, even as a pure item of news. Just unbelievable.

It is easy to criticise the politicians and their mistakes, but this silence by Newsday is just another level of irresponsibility which would make any right-thinking person pause. Newsday have their own patchy track-record in that they forced-out Kevin Baldeosingh over his challenge to Fr. Henry Charles for plagiarism. The parliament discussions on Friday 12th and the news releases from both the Media Association of Trinidad & Tobago (MATT) and the Congress of the People (CoP) formed the basis of articles on the issue from Thursday 11th. Given that behaviour it is interesting to watch them, as The People’s Newspaper, minimizing a matter of such great concern to so many people. A matter concerning an apparent threat to freedom of the press.

We have to be honest and admit that a significant part of the national conversation is the impatient snarl to ‘shut-up’ the person we do not agree with. That tendency has borne some strange fruit in the case of Newsday and Fazeer.

Yes, I think Fazeer was forced-out too – given his popularity, it all seems very wrong-headed to me. At several levels, but the pregnant question here is how come the State owns companies which are in competition with private ones. The notion of the State Enterprise was originally one which performed some specialist task which the private sector did not provide, but the discussion is an involved one.

One of the criticisms of our State Enterprises is that in significant cases, they they are in competition with private business interests. For example, First Citizen’s Bank, Udecott, HDC, EFCL and so on. Of course the closest example of this is CNMG. Ironically enough, the Special Purpose Entities/State-owned sector were the topic of my last show on CNMG and we did discuss this issue of competition.

So, exactly why does the State own CNMG? How fair is it for the other media houses to have to compete with a State-funded entity? In my view, CNMG had established a solid reputation as a topical and fearless current affairs and news source. Of course, all of this is going to damage the brand, so its private sector rivals would be smiling to themselves.

Returning to one of my earlier discussions on the ‘Two Tendencies‘ – published in this space on 16^th May 2010 – it seems clear that these are a big part of this story. The first tendency is to say that our State Enterprises are too important to be run by anyone but the best people. The second tendency says that, having won an election, all these bodies are ours to command and that is all. The second tendency can distort good sense and professional standards to the bizarre extent we saw in the Udecott case. This case of the Fazeer Mohammed ‘re-assignment’ is definitely one in which both tendencies have battled it out on the blogs and the airwaves.

It is unlikely to be settled anytime soon.

The big questions for me are –

Which of the Two Tendencies is in control?
How committed are we to a conversation with people who hold different views?

Termination of services

CNMG termination letter This is the letter CNMG sent to discontinue the two programmes I was contracted to do with them – a weekly editorial on Friday mornings and a one-hour current affairs program on alternate Sundays . It was FAXed to me at 16:13pm on Thursday 4th November, but backdated to 1st November.

So, let us see…

Ingrid Isaac, the former CEO was said to have ‘resigned’ on Wednesday 27th October – the same day Ken Ali is said to have started as Interim CEO – see CNMG’s version of events here – http://www.ctntworld.com/LocalArticles.aspx?id=24248
I was ‘discontinued’ on 4th November and
Fazeer Mohammed was re-positioned/offered a new position etc on 6th November…

All to say that nobody was fired, is just that a number of people are no longer there, but no one was fired and more to the point, I see a report in this morning’s Express newspaper that Ken Ali said “I really have nothing more to say to the media on this matter.” I could scarcely believe what was on the page before me and hopefully there is a misprint.

Ken, please do confirm to us that you did not say that…

VIDEO: Current Affairs – 24 October, 2010

Afra Raymond sits with guests Martin Daly, SC; Conrad Enill, former Minister in the Min. of Finance; and Richard Joseph of Trinidad and Tobago Transparency Institute to discuss the topic, “State-Owned Entities: Taking Stock”. Video courtesy CNMG

Programme Air Date: Sunday, 24 October 2010
Programme Length: 0:47:05

CL Financial bailout: A Season of Unreason

We are now entering a bizarre endgame in this rounds of musical chairs. The children’s game has returned for us adults, but with a vengeance.

As I wrote on 10th September in this space, the real question is ‘When exactly did the CL Financial group collapse?’.

To understand this huge matter we need to put things in the correct order –

Firstly, the CL Financial chiefs left others holding the risks. Some dates and names, to support the theory –
- L.A. Monteil – retired at the end of March 2008
- M.A. Fifi – retired in August 2008
- Robert Mayers – retired in December 2008.
What did they know and when did they know it?
Secondly, there was a series of large-scale, rapid withdrawals of funds which preceded the start of the bailout. That pattern of activity would have speeded-up the collapse. It would be very interesting to see details of who broke their deposits and failed to ‘roll-over’ in that crucial final stage.
Thirdly, post-January 2009, we have the massive payout of State funds, as detailed in the Guardian editorial of 25th October. Who was the recipient of those funds? Who benefited? On 1st October, the Prime Minister promised to publish that list and we await with interest.
Now, with the PP government taking the decision to review the bailout process, we have entered a truly bizarre stage of this matter. This is the part where all those trusting people who were told to wait and have faith, are realizing that the people in the know have already withdrawn and secured themselves. Some of those people in the know were the same ones who were telling the faithful to keep on waiting. What a thing.

There now appear to be at least four groups representing these investors –

The Clico Policyholders’ Group (CPG) – which is the most visible one with Peter Permell, Manny Lawrence and Norris Gomez etc.
The Clico Policyholders’ Protection Association (CPPA), which is the one with Harold Sookhan and Ramesh Lawrence Maharaj.
South Action Group – with Solomon Hem Lee
Denbow Group – a small number of Clico investors who are being represented by Dr. Claude Denbow SC.

Some of the positions being taken by the various groups are indicative of the degree of desperation of the parties, hence the title of this article. The general view emerging from these groups seems to be that the CL Financial group is basically healthy and profitable, so there should be no issue about returning their investment.

I do not know what those views are based on and it is impractical to continue basing our discussions on the series of rumours and draft reports and suchlike. We need good quality information to make a quality decision and that is not negotiable. We need to insist on that as a minimum.

After the first round of organizing and attorneys’ letters, followed by the Prime Minister’s important address on 1st October, we are now into what appears to be an even stranger place.

Two of the stranger proposals emerging from the CPG’s Port-of-Spain meeting on 24th October were –

Prem Beharry of the CPG was reported in the Trinidad Guardian to have said – “…Ryan ALM are saying they would take US$600 million and would convert it to the best debt instrument in the world which is US Treasury Bills,” Beharry said.
“The Ryan ALM group is saying, within three months if they are engaged, they would be able to sell those bonds and get in cash of US$1.8 billion which is equal to the debt of TT$10.5 billion—that money would be used to pay all the policyholders…” That is literally too good to be true. It is the same approach that created this mess in the first place – both at the CL Financial group and Hindu Credit Union. It seemed to me that the CPG was recommending that the government put $600M USD of our taxpayers’ money into this scheme. Yes, I said scheme. Maybe if it was really so good they should have just accepted the discounted rates being offered in the budget and invested those funds with Ryan ALM. After one time is really two times, yes. I recently read that one Prem Beharry was appointed to the National Gas Company Board.
Another proposal, this one reportedly stated by Peter Permell, the CPG’s most prominent spokesperson was for the state to pay 40% immediately with the balance being payable in 5 to 7 years. The persons waiting for delayed payments would earn interest of 4-4.5% on those unpaid balances and also be entitled to a 51% share of any uplift in the value of sold assets. No, there was no proposal for those CPG members to share in any losses if assets had declined in value.

It may all just be a series of negotiating positions, but it seems pretty clear that no one from these various investors’ groups intends to take a discount or ‘haircut’ on the monies owed to them. The unstated assumption is that if someone has to stand the bounce or take a haircut, that someone must be the taxpayer. That could never be the correct position. So, we need the facts.

The most startling development is the Central Bank’s full page adverts on Thursday 28th October, repudiating the claims that it had offered any guarantees in this situation. The reaction was immediate, with the CPPA publishing large adverts in opposition the next day and a new anti-bailout group emerging for the first time – at last! The CPG’s response was a nadir in their campaign, with the Trinidad Guardian reporting that – “…Permell went on to say that they do not care where the Central Bank gets the money from once they guarantee the policyholders’ contracts…” – I could scarcely believe what was on the page before me. Even the most militant Trade Unionists use more reasonable language.

Which brings us right to the meat of the matter, the order of things. What is the reason that the investors’ groups are now at the front of the line for assistance from this government? I could be wrong, but it is easy to get that impression when one hears of Cabinet discussing the matter twice in one week, certain groups giving threatening timetables and so on. I do not know if our Cabinet – PNM, UNC or PP – has ever given such a total priority to any matter in the past.

There are other claims on the limited monies available to the State. All of those claims existed before these investors groups. All.

Many people have poor water supply. Outstanding payments to contractors and suppliers are in excess of $7.0Bn, according to Central Bank estimates. Insufficient money for OPVs – the estimated cost of $3.0Bn is too much for the country to bear, so national security is falling behind. More guns and drugs entering our homeland. Public Servants claims are about $3Bn and that is also a strain on the Treasury. Not enough police cars. Sad situation in the public hospitals.

The CPG issued a 2 page advert in the Guardian on Thursday 4th November and it deserves careful reading. It was good to see their call for the publication of the correct financial information before making a decision. They set out their proposals for the relief of CPG members – those are the latter of the two above, with the added condition that they be given two seats on the boards of CL Financial and Clico.

The CPG claims that its proposals place no additional burden on the taxpayers, which is a good thing, if that is truly so. The CPG’s proposals are silent as to how the monies already spent are to be recovered.

The real test will be if the accounts and asset valuations reveal the group to be insolvent. Will the various investors’ groups accept that or are we in for a long, bitter fight?

SIDEBAR: The Commission of Enquiry

The Attorney General recently announced that he had withdrawn Sir Gavin Lightman QC as the sole Commissioner, due to an apparent conflict of interest. Lightman had appeared for Clico in a 1991 court case and the PNM did well to have stopped this before it went too far.

Two important further points, though –

Firstly, this is the second such occasion. In the first case, the Commission of Enquiry into 1990 was announced with retired Appeal Court Judge Mustapha Ibrahim as its chair, until he pointed out that he too had a conflict of interest. There needs to be some more care taken on this count.
Secondly, the terms of reference need to be qualified, since the AG was reported to have said that “…The COI, he said, covers CL Financial, Colonial Life Insurance Company (Clico), Clico Investment Bank, British American Insurance Company and the HCU…” Having been frustrated in my efforts for the past fortnight to get confirmation of the Terms of Reference from the AG’s Ministry, I am forced to rely on press reports. Question being, why is CMMB being omitted?

CL Financial bailout: These Turbid Times

Last week I wrote about the Code of Silence observed by our ruling class. I gave examples to support my idea, but there was not enough space to mention everyone.

The Bankers Association of Trinidad & Tobago (BATT) and the Association of Trinidad & Tobago Insurance Companies (ATTIC) are also part of the situation.

We have a long history of our rulers making huge, stupid, destructive decisions without any commitment to transparency or accountability. That lack of transparency is what allows corrupt to flourish. We can never eliminate corruption, but if we are serious about reducing it, we need to proceed differently.

Maybe, just maybe, this is the kind of colossal event which could force some of us to drastically change our ways, despite the positions we now assume. This is a moment of national peril and the continued observance of the Code of Silence is going to cost our country plenty money.

As it is, we already have been bound to a rotten bailout of the wealthiest individual in the Caribbean by our Treasury at ZERO interest. Anybody looking to set up a small business has to face the bank and pay interest. None of that for Lawrence Duprey and the CL Financial chiefs. They have been able to enrich themselves and when the entire thing went wrong, they were able to negotiate a handsome handshake for themselves and then leave the mess for our government to clean-up.

That is the plain meaning of the bailout. Is not policyholders we bailing-out, is the richest, smartest characters in the country. The bailout script is unfolding so well that almost the entire discussion is now about the fairness/unfairness of the government’s position with respect to retired policyholders etc.

Real Anansi antics.

The CLICO Policyholders Group (CPG)
Competing agendas? There was an EFPA group and a CLICO Policyholders group formed just after the budget on 8^th September, but they soon merged under the latter name. I am now seeing what appears to be a substantial split with 2 competing meetings being organised for 10am today – one in Port-of-Spain and the other in San Fernando.

The CPG group has been very successful at getting their views known and making the media circuit, with the eventual meetings with the advisory group set up by the PM.

The main concern being advanced by the CPG is for the recovery of the funds deposited with CLICO and there has been no reply whatsoever to the point that, despite its labelling, the EFPA was largely sold and understood as a deposit. The accounting rule of thumb as to ‘substance over form‘ in interpretation is an irrefutable part of the debate on this, but CPG have been silent on this point.

Almost all the many people with whom I have discussed this issue, have been very plain in their language – ‘I had my money deposit with CLICO‘ and so on. But the word Policyholder is more likely to attract sympathy, so the games continue.

We already spent $7.3Bn in cash since the bailout was announced. Please note that nobody is even talking about how the State is going to recover that loan. The only talk is about how are they, the depositors, going to recover their monies.

There is a real principle of financial equity being shredded to pieces in the conduct of this bailout and it was disappointing that Mr. Dookeran, as an Educator in the field, did not take the opportunity to expand on this.

The intent is plainly to deprive the Treasury of its limited funds so that the assets of 15,000 people can be preserved.

So, What about those negotiations?

When the Prime Minister spoke on 1st October, she created an advisory group (headed by Minister of Food Production, Vasant Bharath) to meet with the policyholders to seek other options.

The Prime Minister was to meet with concerned persons and activists on Wednesday 7th October in Chaguanas, but that meeting was cancelled at short notice, with no alternative dates given.

What we are left with is lengthy, secret meetings to discuss the review of the bailout terms, with no concrete information emerging. That secrecy is totally unsatisfactory. It smacks of secret deal-making and does nothing to inspire the confidence which is supposedly the very purpose of this exercise.

The last regime, with all of their noble intentions and devout Ministers, lost their way in a morass of muddled purposes, secret deals, mixed-up with misleading and false public statements from the highest office in the land. We all know how that ended. The question is whether we have learned anything from that bitter experience. The Peoples’ Partnership were the main beneficiaries of those PNM errors, have they learned from that?

Our money is being spent on this massive exercise and it is not good enough to emerge from these closed meetings with agreed phrases like ‘constructive or meaningful’. This emerging pattern speaks of disrespect for the acumen of our people.

To re-state my equation:

Expenditure of Public Money – Accountability and Transparency = CORRUPTION

Imagine these bold-faced people declaring that when they are done and settled, the terms will be announced to us who paying for the whole thing. The first sign of a bad marriage is when the husband is the last to know – some say, the wife. But the main point is that the public cannot be the last to know.

The simple and painful fact is that public confidence in our leaders is at an all-time low. The time-honoured notion that a leader is someone wiser, more mature, less reckless and of overall higher ideals has been tested to destruction by events. In this particular case, it is easy to understand the charged atmosphere, hence the need for extra ventilation and transparency.

I was recently emailed by a well-meaning group asking that I start setting out some ideas of how CLICO might be rescued and I had to remind them that without basic information, all we can do is argue emptily with each other. All to the amusement of the masterminds of this, the greatest economic crime in our nation’s history.

I was even ‘phoned, while writing this, by an acquaintance who is a leading member of the CPG to join him and an un-named UK guest in a TV studio on Monday morning to discuss all this. Yes, I dismissed the request – too much secret-thing for my taste – and challenged the caller to name the person, supposedly a top UK expert.

What would be ‘constructive and meaningful’ would be to publish these long-outstanding reports so that we in the public can inform ourselves on the vital issues –

The original Duprey letter of 13th January 2009.
The audited accounts of the CL Financial group for the years ending 31^st December 2008 and 2009 – Have PwC completed that? When are they to be published?
The Mottley Report – There was a team of three advisers – Wendell Mottley, Colin Soo Ping Chow and Steve Bideshi – appointed to examine the CL Financial group and we need to know what were the findings of this group.
Given that we are being asked to bailout and clean-up Mr. Duprey’s crisis, I feel we need to be told the names and details of those who benefitted from the $7.3Bn paid out so far, as well as those details for the borrowers of the $1.0Bn of ‘non-performing loans’ in CIB’s portfolio.
Finally, we also need to have the position of the CLICO Policyholders’ Group published. What exactly are they claiming?

We have seen reports in the press about the very long Cabinet meeting on Thursday 21st at which the CLICO issue was said to be part of that agenda.

It would be totally unacceptable for a deal to be sealed without properly informing us, the taxpaying public, as to the true background.

The People’s Partnership has already distinguished itself, positively, by announcing Commissions of Enquiry into the attempted coup in 1990 and the Financial collapse (CL Financial and HCU). This is no time to get diverted into back-room deals.

I am working for betterment and from you, our elected rulers, I expect better.

Barbados Free Press spreads the word for AfraRaymond.com

Code of Silence was an article in two parts – the first dealing with the agents and effects of that Code and the second dealing with the unfolding case of AIC.

As usual, I sent the article to my main blogging-collaborator Barbados Free Press (BFP) who split it apart into those halves. Maybe they felt that the bond default by AIC Barbados in the second half deserved a separate focus for their readers – who knows?

So, BFP published Code of Silence surrounds CL Financial bailout on Saturday 16th and Michael Lee-Chin’s AIC Finance – Another CL Financial CLICO situation in progress? on Monday 18th.

Later that day, the AIC story was picked-up by Forbes.com and that story is here, Forbes picks up Barbados Free Press news feed!

CL Financial bailout: The Code of Silence

Throughout this series of articles on the CL Financial bailout I have touched on the existence and effect of a Code of Silence amongst our ruling elite.

This is sometimes called the Information Age, with the latest news and ideas being ‘pinged’ or ‘tweeted’ across the Social Networks. The new reality demands a complete shift in our attitudes to information. Our leadership class has blatantly refused to share their information and insights at moments of crisis, which shows the challenge facing us if we are to progress. Just to give two examples, think of the many secret reports from all the Commissions of Enquiry before the Uff Commission and the steadfast refusal of our political leaders, for many years, to even consider a Commission of Enquiry into the Coup. It is widespread and literally sickening to all right-thinking people.

We have had a new start and some reason to hope for change, by the PP government’s appointment of Commissions of Enquiry into the 1990 Coup and the financial collapse (CL Financial and Hindu Credit Union).

Even now, alongside those hopes, the new government has still not published the Bernard Report into the Piarco Airport Project.

Despite the progress, we cannot be complacent, the slope is slippery and the stakes are high.

The Code of Silence is deep and powerful in the case of the CL Financial bailout.

On 3rd October, I set out a few of the failures on the part of the regulators. Those failings are real and serious, but sometimes a shift in focus can be beneficial.

If we look beyond the legally-empowered regulators, there are other informal ‘regulators’ upon whom society relies to make decisions. Those would include Civic Society Organisations, Trade Unions, Institutions of Higher Learning and Professional Bodies. Society has been able to rely on these because they are seen to represent collective knowledge and insight, rising above individual interests to attain broader perspectives.

Those bodies, with one notable exception, have been silent throughout this CL Financial fiasco and have failed the broader society in this colossal matter. I am being forced by these events to re-examine my fundamental assumptions on the degree of our reliance on these bodies. This is the real nadir of corruption, when we seem to have lost our way in the long grass and we not even talking about the politicians and so on. This one is not about them. It is about us and our feet of clay.

Let me explain –

Law Association – This is one of the leading Professional Bodies and their silence has been deafening. The President of the Law Association is former Independent Senator, Sunday Express columnist and eminent Senior Counsel, Martin Daly. Daly is widely regarded as a fearless and irreproachable voice on many matters.
The tangled web in this CL Financial bailout has included early withdrawals, overlapping Directorships between depositors and bankers, payment of dividends after asking for state financial assistance, misleading negotiating positions taken by the CL Financial chiefs, a huge zero-interest payout to the CL Financial chiefs which left their shareholdings intact, attempts to sell assets in breach of the MoU. Most of all, the serious and inescapable conflict of interest of the then Minister of Finance, who is an attorney – every single attorney I have spoken with agrees that this was a clear case of conflict of interest.

Yet, not a word from the Law Association. Am I alone in expecting any better?

Institute of Chartered Accountants of Trinidad & Tobago (ICATT) – The entire collapse is shot through with a failure of accountants at several levels and yet this professional body has been silent on all this. After ignoring my open letter and other attempts to start some dialogue on this, Anthony Pierre, ICATT’s President, agreed to appear on a TV interview with me on CNMG. That interview was broadcast on Sunday 26th September 2010 – it can be viewed at http://wp.me/pBrZN-qW – in the ‘Sunday Morning Politics’ slot. When I put the question to him as to the errors and/or omissions of the professional accountants in this huge collapse, Pierre took the position that there was no cause for concern. I do not accept that position, but of course the Commission of Enquiry and hopefully the publication of those long-overdue accounts will shed some more light.

University of the West Indies (UWI) – There has been very limited engagement from UWI on this matter, which is a pity when one considers that the areas of study there include economics, finance, law, business management and accounting.
Of course, the former Campus Principal and now Director of UWI’s Institute of Critical Thinking is Dr Bhoendratt Tewarie, who was also a member of CL Financial’s pre-collapse Board. That is the same Board which approved payment of a dividend 3 days after CL Financial’s Executive Chairman wrote to the Central Bank for urgent financial assistance. Dr Tewarie is also reported to have been at the final Annual General Meeting of CL Financial, held at Trinidad Hilton on 23rd January 2009. The timing couldn’t be better for a report to shareholders – after all, the Central Bank had been written to 10 days before, the dividends approved a week before and the bailout itself was just 7 days away. So what happened at that AGM? Were shareholders given an honest report from the custodians of their capital?

The late Professor Dennis Pantin did write several times on the CL Financial collapse and bailout in his Sunday Guardian column. Dennis made the early call for a Commission of Enquiry into this entire mess and that has now been acted upon.

Sen. Dr. Patrick Watson
Another UWI figure in the whole mess is Dr. Patrick Watson, who is Professor of Economics and Director of the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES). Professor Watson is a government Senator in the current Parliament, who after maintaining his silence on this economic catastrophe since January 2009, has now become most vocal since the budget speech.

Is a straight case of nearer to Church further from God.

Trade Unions – The two groups which one can normally expect to have a public position on these long-term, large-scale issues are the Oilfields Workers’ Trade Union (OWTU) and of course, the Federation of Independent Trade Unions and NGOs (FITUN). Neither of those bodies rose to the challenge and we are the poorer for it.

Trinidad & Tobago Transparency Institute (TTTI) – Yes, the TTTI did make a strong statement calling for improved accountability in the bailout process. That is a Civic Society body doing its job.

What really happened?
But apart from us in the Civil Society, there is another level of the Code of Silence being practiced in that some of the very people who were in charge of this huge crash have rejoined public life, saying nothing about the crash.

They have been recycled. Yes, I know that recycling is good, but this one is toxic.

Caribbean Money Market Brokers (CMMB) – Robert Mayers was the former Managing Director of CMMB, who retired on 8^th December 2008 – see http://legacy.guardian.co.tt/archives/2008-12-09/business2.html – which is less than two months before that company collapsed. Mayers is a most articulate and willing public speaker, who was recently discussing the national budget on the electronic media.

We have heard nothing from Mayers on how the collapse presented itself and there is no concerted attempt to pass on any lessons learned to a younger generation of citizen.

Clico Investment Bank (CIB) – Faris Al-Rawi and Mervyn Assam CIB was chaired by Mervyn Assam, recently appointed as a Special Ambassador with responsibility for Trade and Industry. Faris Al-Rawi, attorney-at-law, was a Director on that Board and he is now a PNM Senator.

Neither man has made any attempt to publicly explain CIB’s shocking insolvency, which was estimated by the Central bank to be of the order of $4.7Bn.

All those people appear to have been anointed, in what must have been a private ceremony, then re-presented as ready to serve. We deserve no less than a proper explanation from these Directors and Officers and I was pleased to see PNM Senator Penelope Beckles recently joining me in calling for them to be questioned publicly.

The case of AIC Finance
Ian Narine, writing in the Business Guardian on Thursday 14th October – http://guardian.co.tt/business/business-guardian/2010/10/14/there-enough-everyone – attempted to point out the way he had tried to warn the investing public on the perils of CL Financial. That column made interesting reading, but what would be the position of the press if any such situation were unfolding right now?

Just as an example, AIC Finance is owned and run by the Jamaican billionaire, Michael Lee-Chin, who came in for mention in Anthony Wilson’s 15th October 2009 BG View ‘Will Lee-Chin avoid Duprey’s fate?’ – see http://guardian.co.tt/business/business-guardian/2009/10/15/will-lee-chin-avoid-duprey-s-fate. I commented on that in the Trinidad & Tobago Review of 2nd November 2009 in ‘Duprey’s fate’ – see http://wp.me/pBrZN-43 or http://www.tntreview.com/?p=887 and the points are once again pertinent.

AIC Barbados, the regional holding company for the group, defaulted on a USD bond in 2009 – in other words, they were unable to pay their debts – see http://guardian.co.tt/business/business/2009/06/06/lee-chin-late-us47m-bond-payment or http://www.jamaica-gleaner.com/gleaner/20100818/business/business1.html.

AIC advert In the last part of September, AIC Finance has been advertising surprisingly high rates of interest in daily newspaper adverts which also offer ‘Preferential rates to Trinidad & Tobago Association of Responsible Persons (TTARP) members’.

COMPARISON TABLE for 12-month fixed deposit rates for amounts up to $500,000 as at 30^th September 2010

Financial Institution	Range of interest rates
First Citizens’ Bank	1.25% to 2.1%
RBTT	0.2% to 1.45%
Scotiabank	Up to 0.75%
Republic Bank	0.30% to 0.75%
Unit Trust Corporation (Money Market Fund)	2.15%
First Citizens’ Bank Abercrombie Fund	1.90%
Fidelity Finance (part of the Maritime group)	1.8%
AIC Finance	4.25%

If CL Financial could not sustain this strategy, how can AIC continue to offer these rates in today’s market?

That is the question.

According to recent press advertisements, the Board of Directors of AIC Finance Limited comprises –
Michael Montrichard
Krishna Narwani
Clarry Benn
Robert Almeida
Hugh Williams
Myrnelle Akan
Hugh Edwards

Further details are at http://www.aic.tt/page.asp?page=Board+of+Directors

A version of this commentary appeared in print on October 17, 2010, on page A31 of the Sunday Guardian.

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