Foolish suggestion, Mr PM

WE EXPECT that by now Prime Minister Manning has totally abandoned the dubious idea of merging the Unit Trust Corporation with the First Citizens Bank. If, as he claims, he floated the proposition for public comment, then he should be painfully and embarrassingly aware of the fierce and overwhelming opposition his proposal has provoked from the public at large. Indeed, such has been the general reaction from ordinary members of the public on the one hand and knowledgeable people in the financial sector on the other that we must wonder what prompted the Prime Minister to make such a precipitated and ill-considered suggestion in the first place.

One would expect that if the Prime Minister is desirous of  “testing the waters” with some measure his government is contemplating that, at the very least, the proposed action would have the benefit of some kind of preliminary exploration as to its basic feasibility, its legal implications and its obvious advantages for the entities involved, the public at large and the country as a whole. Unfortunately, it seems, the suggested UTC-FCB merger does not fall into that kind of positive category. To begin with,  a consensus of legal opinion makes the proposal a total non-starter, which seems to indicate the shallowness of thought behind the whole idea. The fact is that the UTC is not owned by the Government, it is not a state-owned corporation; rather, it belongs to the more than 400,000 unit-holding citizens of Trinidad and Tobago. Any decision, then, about the future course of the Trust must be a matter for the Board and its unit-holders. Sources in the financial sector tell us that, under the legislation governing the UTC, such a merger would be impossible. “At the Trust,” sources point out, “all the money belongs to unit-holders. The Trust can’t take the people’s money just like that and merge it with someone else’s. That would be a breach of trust and a breach of confidence.”

In light of that obviously correct assessment and in view of the potential damage of Mr Manning’s suggestion, we expect that the Prime Minister would now appreciate the extent of his faux pas in even contemplating and airing such a proposal and that he would make haste to clear the air of any intention to merge these two financial institutions. The public’s spontaneous and vehement opposition to this idea tells us that a loss of confidence in the Unit Trust can become a real possibility if this proposal is not categorically squashed. In fact, we find it difficult to understand why Mr Manning would even think of interfering with the excellent operation and impressive success of the UTC which, under Executive Director Clarry Benn, has been providing outstanding returns to unit-holders and repeatedly outperforming some of the leading mutual funds in the United States. The achievements of the Unit Trust since its inception is, in fact, a matter for national pride. Even if the law is changed to permit the merger, what possible benefit would the Trust derive from this change? In fact, to unite it with a lending organisation may well be a recipe for disaster. We find it impossible to believe reports that the motive behind this ill-conceived suggestion is really the desire of the Prime Minister to force the retirement of Mr Benn who attained the age of 60 a year ago, and has been retained by the Board on contract. Mr Manning and the government cannot be so determined to replace the executive director with their own candidate at the cost of disrupting and possibly damaging such an outstanding financial institution as the Unit Trust. If he believes in democracy and heeding the voice of the people, then he should have no doubt about the mandate to abandon this absurd idea.