It seems that the Gov­ern­ment is adamant in main­tain­ing Fi­nance Min­is­ter Win­ston Dook­er­an's ini­tial of­fer of $75,000 and 20 non-in­ter­est bear­ing an­nu­al bonds. If this is re­al­ly so, they are miss­ing out on an ex­treme­ly good deal. In Sep­tem­ber 2008, the Unit­ed States gov­ern­ment bailed out AIG to the tune of (US)$182.5 bil­lion as it re­alised the cat­a­stroph­ic ef­fect the col­lapse of one of the world's largest in­sur­ers would have on the US econ­o­my. This re­sult­ed in the US gov­ern­ment hav­ing a 79.9 per cent stake in the com­pa­ny. AIG's first quar­ter prof­its for 2010 was (US)$1.5 bil­lion com­pared to a loss of (US)$4.4 bil­lion a year ear­li­er. Al­though there was a loss of (US)$0.5 bil­lion in the sec­ond quar­ter, it was at­trib­uted to charges re­lat­ed to sell­ing as­sets to re­pay the fed­er­al gov­ern­ment to the tune of (US)$4 bil­lion.

This means that the US tax­pay­er has re­ceived (US)$1.2 bil­lion as div­i­dends from their 80 per cent stake in AIG. This is not loan re­pay­ment.?The loan to the fed­er­al gov­ern­ment, etc, has to be re­paid by sale of as­sets, which AIG is well un­der­way in so do­ing in just two short years. Al­ready, (US)$4 bil­lion has been re­paid and now it is poised to re­pay a fur­ther (US)$37 bil­lion with­in the next two months. I should point out again that the US tax­pay­er still ben­e­fits from the div­i­dends of shares owned by the gov­ern­ment un­til the en­tire loan is re­paid and the shares re­turned to AIG and its share­hold­ers.?There is a par­al­lel be­tween AIG and CL Fi­nan­cial as both were in­volved ba­si­cal­ly in in­sur­ance and large non-re­lat­ed com­pa­nies. AIG is on the mend and CL Fi­nan­cial can be mend­ed if it is man­aged prop­er­ly.

Re­al es­tate, methanol, Re­pub­lic shares and oth­er as­sets, etc, will not stay at these prices for­ev­er. Bank of Amer­i­ca, JP Mor­gan, Cit­i­group, Gen­er­al Mo­tors, Wells Far­go, etc, have all been bailed out and are now up and run­ning. Ac­tu­al­ly, CL Fi­nan­cial is among an im­pres­sive group.?The Gov­ern­ment's plan does not in­di­cate its in­ten­tions when these as­sets re­gain their val­ue and sur­pass over the next 20 years as well as in­creas­es in methanol prices and prof­its of Las­celle and An­gos­tu­ra, Re­pub­lic Bank, etc. Are the present pol­i­cy­hold­ers go­ing to share in this or are they go­ing to be stuck with their ze­ro-in­ter­est bonds??I am sure that banks like the Bank of No­va Sco­tia, Bar­clays, Citibank and HS­BC would be in­ter­est­ed in Re­pub­lic shares for a pre­mi­um. The Ger­man share­hold­ers of Methanol would en­joy pur­chas­ing CL Fi­nan­cial's share­hold­ings. Oth­er in­ter­na­tion­al com­pa­nies would be lin­ing up to pur­chase many of CL Fi­nan­cial's share­hold­ings in their var­i­ous com­pa­nies, all at a pre­mi­um.

Can the Gov­ern­ment al­low this to hap­pen, es­pe­cial­ly since Roy­al Bank of Cana­da now con­trols RBTT by pur­chas­ing the mas­sive share­hold­ings, some of which be­longed to Guardian Life? This is a deal that I would nev­er have agreed to as Cana­di­an banks now con­trol a vast por­tion of our bank­ing in­dus­try. This is a step back to the ear­ly 1970s when the then prime min­is­ter forced all the for­eign banks to go lo­cal, which ben­e­fit­ted this coun­try and its cit­i­zens tremen­dous­ly.?I can on­ly hope that this ad­min­is­tra­tion is not hell bent on sell­ing CL Fi­nan­cial as­sets at this de­pressed time as po­ten­tial pur­chasers would be lin­ing up for the var­i­ous deals. I have no doubt that mas­sive com­mis­sions will be paid to so-called agents set­ting them up. The one thing the US gov­ern­ment did not wish was for AIG to sell its as­sets in a fire sale. The com­pa­ny was giv­en the time to re­cov­er be­fore these are to be sold.?

It would seem to me that the Gov­ern­ment has a re­al­ly good op­por­tu­ni­ty to get con­trol of the mas­sive as­sets of CL Fi­nan­cial, which con­trols 26 per cent of gross do­mes­tic prod­uct (GDP). Any gov­ern­ment would be con­cerned with 26 per cent in the hands of one in­di­vid­ual. The pro­pos­al from the Cli­co Pol­i­cy­hold­ers Group cer­tain­ly re­quires a sec­ond study and, if nec­es­sary, fur­ther ne­go­ti­a­tions as the cost to the T&T tax­pay­er is min­i­mal in the scope of things.?Or: The funds from EF­PAs, etc, can be used to pur­chase these many prof­itable com­pa­nies and per­haps many of these pol­i­cy­hold­ers may be per­suad­ed to con­vert part or all of their eq­ui­ty for shares in these com­pa­nies, thus sav­ing mas­sive ex­pen­di­ture from Gov­ern­ment. This would give them an op­por­tu­ni­ty to share in the prof­its and the Gov­ern­ment a large share­hold­ing and con­trol of its GDP.?This would not be deemed a hand­out and the cries from the tax­pay­ers would be si­lenced.

?

Nor­ris Gomez

Fi­nan­cial con­sul­tant