Port-of-Spain: Former Finance Minister Karen Nunez-Teshiera has given the Commission of Inquiry a chronological breakdown on what led to the Government to take control of CL Financial and Clico.
She said that on January 14th 2009, she entered her office and saw a letter faxed to her, that former CL Financial Chairman Lawrence Duprey had sent to the Central Bank Governor, Ewart williams.
She says it spoke about the strength of the company, pointed to the global financial situation and asked for support.
Later that day she met with the governor and he asked to meet with her and then rime Minister Patrick Manning.
At that meeting later in the day, the governor would reveal that former Clico executive Carlos John approached him to say that several state companies were about to withdraw their money from Clico Investment Bank (CIB) and that they wanted government's help in persuading them not to do so.
She said they learnt that Minister Mariano Browne was also approached. The prime minister sent for him and he confirmed he was asked to do the same.
She says the prime minister then revealed that he too was approached by Carlos John and he directed the governor and Nunez-Teshiera to take the lead with clico executives.
She says that on January 15th, they meet with CL Financial executives and the governor asks for audited accounts. He was told they were not ready and replied that was unacceptable.
He told that that unaudited accounts should be presented by the next meeting on January 22nd.
By then, she says, the Central Bank was doing deeper investigations and by January 22nd at a follow-up meeting, they found out how bad the run on CIB was, with $4.4 billion to be withdrawn in just six months.
She says the Central Bank wanted to save CIB but soon realised it was too late and that the company was not salvagable. The governor became concerns about the contagion risk.
Republic Bank executives then got involved, concerned about the impact on them, given the 54 percent stake Clico and CIB held in the country's largest bank.
On January 24th they held another meeting and she says she wanted to know what CL Financial assets were liquid to allow them to wind up the company.
She said they soon found out that the Republic Bank shares were incumbered and they called for Duprey to be present at the meeting.
She says that after blocking for some time, it was then that former executive member Gita Sakal finally admitted they had nothing.
That afternoon, she says, she and the governor rushed to the prime minister's residence and broke the news to him, that without an investment of at least $5 billion, a Bear Sterns-type economic crash was imminent.
Days later, the Government announced that the Central Bank was taking over the companies.
You must be logged in to post a comment.