Central Bank Governor Williams Must Resign
Posted: Tuesday, February 10, 2009
By Stephen Kangal
February 10, 2009
It is patently clear to me that had not CL Financial magnate Lawrence Duprey made his pre-emptive approach to Government in mid-January to mobilize State injection of liquidity into his cash-strapped investment bank, CIB, CMMB and insurance giants CLICO and British American it would have been business as usual to date.
But within the passage of a short time these major financial institutions would have eventually collapsed with catastrophic consequences for the savings of policy holders and depositors as well as for the rest of the economy of Trinidad and Tobago and the Caribbean. The Central Bank has been failing us the people of T&T for a long while. That is why Mr. Duprey the avant garde, visionary indigenous industrialist has retained our admiration. But the Government wants to hoff his crown jewels.
The CL Financial Group has control/ownership of an asset base of TT$ 100 billion that constitutes 25% of the country's GDP. CLICO commandeers over 50% of the local insurance industry and administers a wide portfolio of pension-paying schemes, deposit and policies. It is the cash cow of the CLF empire.
Accordingly when in April 2008 it was discovered by the Central Bank that CLICO fell short of the requisite viable assets in its Central Bank- held Statutory Fund by billions that was a situation that could and should not be treated by the Governor of the Bank as he would with any other local insurance company. The potential collapse of CLICO in 2008 that was in trouble since 2004 would have generated destructive shock waves if not a devastating tsunami to inundate the economic and financial landscape of T&T.
Additionally the Central Bank cannot deny that it would have known that in November 2008 the CIB failed to effect payment of a maturing investment by NGC of US$10m. It would have also known as well as the Minister of Finance as Corporation Sole that CIB failed to pay two other NGC deposits totaling US$42m in December 2008. By the end of December 2008 it would have known that CL Financial also failed to make the necessary additions/adjustments to the huge short-fall in its Statutory Fund.
As a depositor at CIB I knew that time-consuming Central Bank approval had to be rigidly obtained since September 2008 for any variations in deposits, even change of names and encashment of deposits. Accordingly I am convinced that the Central Bank knew of the financial difficulties besieging the CIB at least since September 2008.
The Central Bank possessed of the cash-strapped information at CIB, CMMB, CLICO and British American did not inform the Minister of Finance on her admission of this development even though it ought to be aware of the potential fatal damage to economic life-line of Trinidad and Tobago were these institutions to go under.
The Governor of the Central Bank is therefore guilty of gross negligence. He unwittingly withheld critical information in his possession on the failing and near bankruptcy of four major financial institutions under its jurisdiction and control from the Government of T&T. The Government had to learn this from the head of CL Financial Mr Lawrence Duprey by mid-January and not from the Central Bank based on the public admission of Finance Minister Teshiera.
CB Governor Williams has no choice. He must do the honourable thing. He must resign forthwith for having inflicted on the people of T&T without rhyme or reason a grave financial situation that potentially threatened their stability with widespread pauperization.
The overwhelming evidence convicts him of being guilty of a lack of care for the people of T&T.
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