By David Walker
“In 2008, the U.S. government, primarily through the $700 billion Troubled Asset Relief Program (TARP), bailed out major financial institutions, insurers, and auto companies to prevent a systemic collapse. Major recipients included AIG, Citigroup, Bank of America, JPMorgan Chase, GM, Chrysler, and mortgage giants Fannie Mae and Freddie Mac.”.
This was the broad tenor of widely circulated reports in international business and finance media.
I’m certain that all of you who lived through it can remember vividly the turmoil that it caused all over the world. We in T&T were not spared by any means. As in America and elsewhere, a few major companies were deemed too critical to fail, mainly in the interests of policyholders and the wider economy. At the top of our list stood CLICO, BAT, CIB, BAICO CMMB and a few others. Yet there was a key difference from the international scene. Our companies operated mostly under the regulatory control of our Central Bank (Section 44) which has specific and well-defined rules as to how any bailout is to be conducted.
The result was that CLICO and BAICO for example, were to be run by the agency (Central Bank) which was their regulator. The folly and catastrophic consequences of that position are breathtaking, but has faced little criticism apart from mine. To compound matters, since CLICO, CIB and BAICO belonged to the CLF group of companies, the government decided to take control of the entirety of the group as a surety against any sums advanced to the subsidiaries being bailed out.
All of this occurred over a period of two years commencing January 2009. CLF was one of the leading conglomerates across the region with international subsidiaries in US, UK, Middle East and Africa and embracing a diverse range of industrial sectors. CLF, to put it mildly, was an important cog in our national economic wheel.
No plausible rationale has been given to this day for the takeover. If as stated, it was to protect the funds to be advanced to CLICO etc then the model used in the US and UK was more than adequate. Advance the sums required with clear terms including interest payments and restrictions on their absolute freedom to operate. Our government at the time chose to effect a nationalization rather than a rescue and we have paid a terrible price. In all likelihood we continue to pay such a price.
Before I address what has transpired since that time, and what remedial action is possible and recommended, I feel compelled to rehash the observation I made shortly after the then government took control of CLF. I stated quite openly that the way it was done would likely result in “CLF still being in State hands upon the arrival of the next major crisis”. I say this not as a boast but as a clear reminder of the devastating results of making major financial decisions without the benefit of the data and reports I was asking for alongside my two colleagues, Afra Raymond and Rishi Maharaj.
So here we are, on the cusp of another global economic crisis with CLF still being bailed out by the government. To add to the folly, the previous government lamented that they “did not know how bad the situation was at CLF” when they took control of it”. Further, in a fit of pique they put it into liquidation rather than have it returned to its shareholders for them to sort out the mess.
A perennial loser
We must ask, what has been the cost of the CLF bailout to the taxpayer thus far? Based on their own statements in support of the ongoing liquidation, the previous regime has bequeathed us a perennial loser, at least while it remains in government hands. We seek critical information as we did previously so as to understand the decisions being made. Is history repeating itself with our precious reserves being drained by a private conglomerate that our government seems incapable of releasing from this insanely expensive bailout?
Our government owes us a duty to provide the information required to make the best investment decision – is it to terminate government control or is it to continue down the current path until some clearly defined milestone is achieved. Put another way, we must not blindly follow the current path simply because it has now calcified itself as the default option.
This data driven decision is imperative given the turmoil in international markets. The ability to ride out much less exploit a rapidly moving scene has never been and will never be the preserve of the public sector.We will be filing a series of information requests in the coming weeks. We hope that this administration understands the need for that information in their decision making process and the desirability of sharing most if not all of it with us. More than anything we want to see a forward looking plan for the removal of the company from State control along with financial projections and milestones. I think that Prime Minister Kamla Persad-Bissessar had some decisive interventions in these troubled matters –
● Inaugural Budget of 2011 was epic in setting the stage
● Appointed the Colman Commission
● Published the Colman Report into HCU the day after it was revceived
● Published the Colman Report into CLF on 16th January 2026
Here is a list of our key requests:
- All Consolidated Financial Statements for CLF since takeover to present (audited and unaudited)
- All Financial Statements for CLF group companies since takeover to present (audited and unaudited)
- All fees and emoluments paid to liquidators and external consultants since takeover
- List of all directors (identifying Chair and Secretary) since takeover)
- Details of all out of court settlements
- Terms of all departures from executive or senior management positions
Let us not have a Petrotrin repeat where the status quo was aggressively defended against all comers until the bill reached 12 billion by which time an optimal conclusion was impossible. Alongside my colleagues, Afra Raymond, Rishi Maharaj and all who seek the best result for the nation I look forward to better responses from the respective parties than we received a decade ago.
