Friday, February 23, 2018

...Howai: T&T could have done much more with $19b bailout

A HIGHWAY to Point Fortin, three hospitals, eight administrative complexes, an aquatic centre, a cycling velodrome and a tennis centre could all have been built with the amount of money that has been pumped into collapsed conglomerate CL Financial.

Finance Minister Larry Howai made this statement as the Finance Bill 2013 was debated in the Senate, Tower D, International Waterfront Centre in Port of Spain yesterday.

Howai said the government has so far pumped $19 billion in the failed conglomerate.

"The failure of CLICO and the consequent collapse of the CL Financial Group has been a major blotch on the economic landscape of this country. It also exposed glaring inadequacies in our regulatory framework. What has been especially painful is the manner in which this entire process was handled," Howai said.

Howai said "considerable funds "were advanced to assist CL Financial "without getting the kind of security or any kind of security to support the advances that have been made".

He said "a number of issues relating to inter-company transactions and inter-company liabilities that should have been addressed as part of the process of advancing funds" were not followed.

"The absence of this has seriously compromised our ability to recover the $19 billion that has been used to bailout depositors, investors and other creditors within the group," Howai said.

According to Howai, the $19 billion that has been put into this group could have easily have done all of the following things put together:

1. Build the Point Fortin highway

2. Build the Point Fortin and Arima hospitals

3. Build the Couva Children's Hospital

4. Build the five Administrative Complexes for the Judiciary

5. Build three administrative complexes for the regional corporations

6. Build the new aquatic centre, cycling velodrome and tennis centre

"All of these together could have been done if we had $19 billion. Instead of this we will have to actually borrow this money," he said.

Howai said the failure to regulate the CL Financial group has cost this country "dearly".

"The failure therefore to regulate this group properly has cost this country dearly and the bungling attempts to deal with the process after that has certainly not helped me in any way as I now go through this process of trying to unravel all of things that occurred prior to the intervention," Howai said.

"We shall never recover all of the funds that have been put into the group and our focus is to try and maximise what we can and to reduce the borrowing that we need to do," he said.

"We have negotiated an extension of time under the MOU (Memorandum of Understanding) with the CL group with a view to giving ourselves enough time to be able to put measures in place to maximise the collections that we will receive under these arrangements," he said.