No details on additional $4 billion spent on CL Financial/CLICO never-ending bailout
Friday, July 14 2017 @ 01:01 PM AST
Contributed by: AleemKhan
In a press release (below), and in another yesterday, the Finance Minister confirmed that the Government is not winding up the company. This, of course, leaves room for more "costs incurred" and "contingent liabilities" to "prevent a collapse of the economy which the failure of these companies would provoke because of the systemic risk they pose to the economy" between now and 2020. This is in fact the reason some enter politics: to incur costs and baffle the masses with jargon like "contingent liabilities" so they can keep doing what they're doing. It's especially obvious when the person is arrogant, anything but amicable and totally uncharismatic - typical qualities of people who care about people.
So let's do the math:
$23 billion minus $7.5 billion = $15.5 billion
$27 billion minus $23 billion = $4 billion
That $4 billion was for, as the Finance Ministry release below says "all of the costs incurred and all estimated contingent liabilities" which is jargon most taxpayers will not translate to 'feeding frenzy' so it's all very accurate, and arguably self-indicting.
However, #dohbeatup because it grew from $5 billion under then PNM Finance Minister Karen Nunez-Tesheira in 2008/2009 to around $19 billion under Imbert's immediate predecessor, then PP Finance Minister Larry Howai, and both of them have faded out of public life, free to spend their hard-earned savings from their salaries, of course.
So now under Imbert, after a once-reputable auditing firm produces a calculation that it wasn't $19 billion or $20 billion but in fact, something more like $21 billion, or was it $23 billion? Who knows? Who cares? Now it's $27 billion and by 2020, it will likely rise some more, and CL Financial/CLICO must remain unprofitable and insolvent to ensure that more taxpayers' money go into saving these very important companies, which are too big to fail.
The following is the full media release issued this morning:
July 14th 2017
No move by Government to wind up CLICO
The Ministry of Finance has taken note of the headline in yesterday’s Daily Express Newspaper of Thursday 13th July, 2017 “Wind up CLICO – Gov’t seeks to recover $15b”.
It must be clarified that the Government’s move to appoint a Provisional Liquidator for CL Financial is not to ‘wind up’ CLICO, as the Colonial Life Insurance Company (i.e. Clico) remains under the control of the Central Bank of Trinidad and Tobago.
The Express has confused CL Financial and Clico, which are two different entities. CL Financial is the original parent company of Clico. In other words, before it was taken over by the Central Bank, Clico was a subsidiary of CL Financial.
It is to be noted that in its petition to the High Court, the Government is seeking to obtain from CL FINANCIAL, all funds owed to the taxpayers of Trinidad and Tobago. The funds owed by Clico to the Government, and by extension taxpayers, are already the subject of a court-approved resolution plan.
Clarification is also required of confusing statements made in an article in today’s (July 14th 2017) Guardian Newspaper with the headline “Govt seeks liquidator to block CLF moves”. In this Guardian article, there is a misunderstanding of the quantum of the debt owed by CL Financial to the Government.
At yesterday’s post-Cabinet press conference, the Minister of Finance said that the amount of money spent or committed by the Government to bail out CL Financial was in excess of $23 billion, not including legal costs or consultancy fees or all contingent liabilities.
However, since approximately $7.5 billion has already been recovered, the debt that has been quantified at this time is in excess of $15 billion, which is the difference between the $23 plus billion spent and the $7.5 billion already recovered. There is no discrepancy in the figures, therefore. Further, the Prime Minister’s estimate of $27 billion given in another forum, takes into account all of the costs incurred and all estimated contingent liabilities, so that naturally it would be more than $23 billion. Again, there is no discrepancy in that estimate of the maximum total debt owed.
Minister of Finance
July 14th 2017
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