Richard Lord

Fi­nance Min­is­ter Win­ston Dook­er­an yes­ter­day un­veiled an en­hanced plan for set­tle­ment of the Cli­co is­sue.­ He did so dur­ing yes­ter­day's House of Rep­re­sen­ta­tives sit­ting while pre­sent­ing the Pur­chase of Cer­tain Rights and val­i­da­tion Bill 2011 for de­bate. The leg­is­la­tion is in­tend­ed to bring Gov­ern­ment clos­er to res­o­lu­tion of the Cli­co fi­nan­cial bailout is­sue. Dook­er­an al­so made an im­pas­sioned ap­peal to put the na­tion­al in­ter­est be­fore in­di­vid­ual rights. He said the Gov­ern­ment was seek­ing to put back cer­tain le­gal pro­vi­sions to en­sure the com­pa­ny could be re­struc­tured with­out the threat of le­gal chal­lenges. He said over the last year "we had hoped that such le­gal chal­lenges will fade away be­cause of the na­tion­al in­ter­est. Very of­ten par­lia­ments are asked to make a de­ci­sion be­tween pri­vate rights and pub­lic in­ter­est. it is the re­spon­si­bil­i­ty of the Par­lia­ment to sup­port pub­lic in­ter­est."

Dook­er­an added: "Those who wish to pur­sue the route to seek pri­vate rights, at the risk of caus­ing a liq­ui­da­tion, will be do­ing so at the dis­ser­vice of the na­tion­al com­mon good of the T&T." He said the plan pro­vid­ed for the is­suance of bonds to be used to re­tire the re­main­ing in­debt­ed­ness of pol­i­cy- hold­ers. He said the bonds to be is­sued pos­sess sev­er­al fea­tures to fa­cil­i­tate their easy ad­min­is­tra­tion and min­imise the hard­ships al­ready ex­pe­ri­enced by Cli­co/BAT in­vestors. Dook­er­an said the bonds were to be is­sued in elec­tron­ic form be­cause it was a more ef­fi­cient sys­tem of man­ag­ing bonds. He said that the sys­tem al­so con­tained few­er risks to the bond­hold­ers and could be ad­min­is­tered faster and fa­cil­i­tate eas­i­er trans­fer of bond-hold­ing.

The bill pro­vides for the min­is­ter to make pay­ment in any form what­so­ev­er. It al­so pro­vides for the bonds to bear the same is­sue date, de­spite the date of ac­cep­tance by hold­ers and mu­tu­al fund in­vestors. He said that would cir­cum­vent ad­min­is­tra­tive dif­fi­cul­ties that would oth­er­wise be cre­at­ed by vari­a­tions in ma­tu­ri­ty date. The plan al­so pro­vides for :

• The bonds to is­sued in de­nom­i­na­tions of $1,000 to fa­cil­i­tate the even­tu­al trad­ing of the bonds on the sec­ondary mar­ket;

• bonds shall not be list­ed on the stock ex­change for a pe­ri­od of six months from the date of is­sue in an ef­fort to make them more at­trac­tive for the hold­ers and mu­tu­al funds in­vestors to sell their bonds over the counter there­by max­imis­ing their po­ten­tial re­cov­ery: and

• the bonds shall be deemed se­cu­ri­ties in re­spect of which reg­is­tra­tion with the Se­cu­ri­ties and Ex­change Com­mis­sion is not re­quired so as to cir­cum­vent any ad­min­is­tra­tive de­lays as­so­ci­at­ed with hav­ing the bonds reg­is­tered at se­cu­ri­ties.

The bill will ease the hard­ships faced by ap­prox­i­mate­ly 16,000 per­sons who hold de­posits and mu­tu­al funds with Cli­co and British Amer­i­can (Trinidad) In­sur­ance Com­pa­ny to the val­ue of more than $75,000. Dook­er­an said the bill pro­vid­ed for Gov­ern­ment to buy the rel­e­vant rights, by mak­ing pay­ments in any form what­so­ev­er, in­clud­ing through the is­sue of bonds, on as­sump­tion that 100 per cent of the in­vestors would of­fer the Gov­ern­ment's of­fer of pay­ments. He added that the bonds would not ex­ceed, as the ag­gre­gate, the sum of $10.7 bil­lion and would re­sult of an an­nu­al cost of $500 mil­lion.

He said af­ter pro­longed dis­cus­sion, in­volv­ing the Gov­ern­ment, the Cen­tral Bank and the rep­re­sen­ta­tives of the fi­nan­cial sec­tor "we have now en­hanced the pay­out regime that re­sults in the sub­stan­tial in­crease in the re­turns to the in­vestor." He added: "While this new pro­pos­al re­tains a dis­count­ing mech­a­nism for the Gov­ern­ment bonds of one to ten years ma­tu­ri­ty, it in­tro­duces a new mech­a­nism for the longer ma­tu­ri­ty bonds, de­signed to sig­nif­i­cant­ly in­crease the re­turn to in­vestors in the over $75,000 cat­e­go­ry." Dook­er­an said: "This new mech­a­nism utilis­es the RBL (Re­pub­lic Bank) shares cur­rent­ly held by Cli­co in a trust ear­marked to ben­e­fit the Cli­co in­vestors and we call it NEL 2.