President of the defunct Hindu Credit Union Harry Harnarine says he welcomes a commission of inquiry into the credit union. However, he said he was concerned who would be the commissioners and wants to know the terms of reference by which they will operate. Harnarine said he was happy for the inquiry which would reveal what caused the run on the HCU. He called the names of Cabinet Ministers and the leader of a Hindu organisation, which he said had a hand in the run on the HCU. Harnarine said he was eager to call these names before the commission. The findings, he boasted, will prove the HCU board was innocent and not guilty of mismanagement and misconduct.
Harnarine said he remains suspicious of Government's moves since the people close to the ruling party have their "hands inside the cookie jar of the HCU." He said a number of individuals with high-ranking links to the Government also have legal matters with the HCU. He believes if a buyout of HCU assets by the State is to take place these matters would get thrown out. Addressing credit union members who attended a meeting of the HCU's Depositors and Shareholders Group (HCUDSG) yesterday in the carpark of the HCU's Chaguanas offices, Harnarine also said Government's plan to bail out the HCU was illegal.
He said the HCU has been granted a stay of liquidation. However, the HCU is being run by a liquidator who is in the process of collecting monies on behalf of the troubled entity. Harnarine said the $300 million that Government has proposed to bail out HCU depositors may not happen since the HCU has ten matters before the court. Harnarine said no bailout or commission of enquiry into the operations of the HCU could take place while these matters are pending. Harnarine said the Government probably did not have all its facts straight when it offered to bail out depositors in the 2010-2011 budget.
RIGHT: President of the defunct HCU, Harry Harnarine.
HCU wants loan from Govt
Harnarine said the HCU does not want a bailout from the Government, but instead a loan that would be paid back to the Government through interest earned from its present operations that are functional and generating cash. One of these operations include Bankers Insurance and Jessies Court. Harnarine said Bankers recently earned $10 million. Harnarine said the loan would be used to make initial payments to shareholders until the HCU gets up and running again, based on the outcome of the court matters. "We feel that we would be heading in the direction for compensation and damages." Harnarine said the HCU does not want to be a burden on taxpayers but at the same time he did not want to stand in the way of depositors.
However, he reminded the gathering that the bailout from the Government was illegal under credit union law since the Government could not buy out the assets of individuals but only of the collective entity. Harnarine said the HCUDSG had written to the Solicitor General on September 21, indicating that the $300 million buyout proposal is contrary to law and may have the potential to invite litigation. Harnarine said the Solicitor General was made aware that the asset base of the HCU is more extensive than stated and suffices to discharge a certain percentage of the HCU's overall indebtedness.
He said at the time of the appointment of a liquidator the assets of the HCU was approximately $855 million. The Solicitor General, he said, was also informed that with a $300 million loan from the Government, the HCU's 2008 plan to divest the assets to the membership should suffice to discharge the liabilities of the HCU which amounts to $50 million. Harnarine said the letter also indicated that the sum of $550 million was required to repay the larger depositors. He said the large depositors were willing to accept a divestment plan that would see large depositors receiving shares of the HCU's assets ploughed into a new company called the HCUSDG Co Ltd.