LAST week, news broke that Mr Lawrence Duprey, of the Colonial Life Insurance Company (CLICO), which folded during the global economic recession, is interested in returning to Guyana.
This news has been greeted with mixed reactions and the fact that citizens, home and abroad, have perked up and are weighing in on the matter bodes well for healthy and constructive discourse. CLICO was the insurance company that went belly-up eight years ago and resulted in policyholders and investors losing billions. Insurance, including life, pension, accident, fire and illness was wiped out. The insured lost their investments, employees lost their jobs and individuals and businesses lost their shares. One of the biggest single casualties was the National Insurance Scheme, through an investment made of $5 billion, which poses threat to its viability and longevity. Looking at this situation at face level, where there is angst towards the company, such is understandable.
Chartered Accountant, Christopher Ram, was quoted in the Kaieteur News as saying that the only meaningful apology would be to repay Guyanese. He also spoke of Guyana being able to recover the economic loss, not only the financial loss. To do so, Ram said Guyana can apply “a proper rate of exchange and a proper rate of interest and on that basis, we will determine what it is we have lost…”
According to Minister of Finance, Winston Jordan, Mr Duprey said that CLICO’s parent company, CL Financial Limited (CLFL), is desirous of returning to do business in Guyana, is prepared to apologise to Guyanese, and refund NIS its investment. CLFL has its eye set on our financial and housing markets, proposing to aid poverty alleviation, improve savings and build the solar energy and claybrick industries. Acknowledgement or rejection of the proposals should not be made in the absence of critical examination of other factors.
During 2007-2011, when businesses around the world were failing, such was happening in an environment of liberalisation of economies by governments that saw the relaxing of regulations and oversight responsibilities. This created the space for vulture capitalism to rise, where rogues and the unscrupulous were given free rein to do as they pleased. Businesses gambled with investors’ money, unperturbed about the absence of iron-clad guarantees for the protection of the funds and realising of appropriate returns.
In the wider world, for instance, Wall Street in the United States, not only saw significant falls in stock prices — people’s investments were wiped out — but some financial institutions   went out of business and others that survived had to rely on bailouts from the Federal Government. The Trinidad and Tobago Government intervened to keep CLICO alive.
There were cases like Bernie Madoff, who recklessly speculated on people’s money that robbed them out of their life savings, now serving a 150-year sentence for his Ponzi schemes. In the Caribbean, there was Robert Allen Stanford who was considered king of Antigua, sustaining its economy, and who became famous for founding and financing the 20/20 Cricket Series.  In the case of CLICO (Guyana), it needs not be forgotten that the PPP Government erred in not carrying out its fiduciary and oversight responsibility, which allowed this company and Globe Trust to fall into non-compliance. The absence of enforcing the Laws of Guyana not only created space to ‘do as you please,’ but without technical support to offer advice and direct operation things were bound to fall apart. Saying this does not free CLICO of culpability, but at the same time it does not absolve the PPP Government’s act of failing to shoulder and carry out its responsibility.
History in business has shown companies can rise and fall and rise again. Some after going into bankruptcy have re-emerged independently or as subsidiaries and at times even stronger. This is true for businesses around the world, inclusive of those within the most developed societies.  The proposed investment of CLFL, which is an indigenous company to the Caribbean Community (CARICOM), needs to be analysed within the context of the environment when it folded, the factors involved, and what it means to the Region in pursuing economic integration.
Lawrence Duprey remains a significant financial player in the Region and elsewhere and with a new approach to investment and private partnership in Guyana, it is possible that we could recover some of our losses for past imprudent deals, and move forward. Perhaps, in situations such as ours, when we are still reeling from the gamble with Treasury funds, half a loaf would be better than none. An open door would therefore not be an unnecessary risk, though the approach of analysts such as Mr Ram should be considered.