THE number of family-owned financial institutions in Trinidad and Tobago may have something to do with the lack of compliance to fiduciary duties in this country, Inspector of Financial Institutions Carl Hiralal said yesterday.
Hiralal made the statement as he testified during the Commission of Enquiry into the collapse of CL Financial, three of its subsidiaries and the Hindu Credit Union (HCU).
Queen’s Counsel Peter Carter asked Hiralal, who spent the majority of his career in Canada, to compare the regulatory framework in this country to that of other countries.
“The degree of compliance (overseas) is far more significant than you will find in Trinidad. From my experience, if a company breaches the law or the legislation in Canada they usually, within a day or two, the minute they find out, they report it to the regulator,” Hiralal said.
“In Trinidad, you do not find that ... it is basically catch me if you can,” he added.
He said: “You do not have that spirit of co-operation and you do not have that degree of compliance that you normally would have. But the fact if you have a lot of family-owned businesses in Trinidad, and there is nothing wrong with family-owned businesses, but they own financial institutions and we try to get the level of understanding that owning a financial institution is a privilege and not a right and that you are operating in a fiduciary capacity.
“It means that the funds that you are taking in from the public is not your own and I do not get the sense that you get the same kind of conviction here in Trinidad that I have seen elsewhere.”
Hiralal described the Central Bank’s relationship with CLICO as a “very difficult” one.
“It was a very difficult relationship between the Central Bank and CLICO. I had never seen financial institutions take the regulator to court. I had never seen financial institutions issue letters from lawyers basically questioning the ability of the regulator and this made it very difficult for the regulator to conduct its affairs.”
Hiralal said CLICO’s dealing with the Central Bank was “a bit too much, a bit heavy-handed”.
He said even when the regulator tried to implement policies to benefit policy-holders, CLICO would oppose the move.
Hiralal is scheduled to return to the witness stand on Monday.