Why Unit Trust cannot be merged

THE EDITOR: The Government of Trinidad and Tobago does not own the Unit Trust Corporation and to describe the UTC as state-owned as occurred in several news reports, is entirely incorrect and misleading.

In fact, the Government does not own one single cent of Unit Trust whose owners are more than 400,000 unit-holding citizens of Trinidad and Tobago. As such, the Government cannot decide on the future of UTC, nor on the matter of its going public. That is entirely for the Board and the unit holders of the Unit Trust Corporation. I write this as a concerned and reasonably informed citizen of this country in response to news stories of a proposed “merger” between First Citizens and the Unit Trust Corporation. Because UTC is a trust owned by unit holders — and is not traded on the Stock Exchange — it cannot legally be merged with a banking corporation like First Citizens Bank. The situation is complicated by the fact that FCB is totally responsible to, and controlled by the Central Bank of Trinidad and Tobago. FCB’s shares are owned by the Government but it is controlled by the Central Bank.   

The organisations, UTC and FCB are entirely different and separate organisations and are as “un-mergeable” as oil and water. Most importantly, you cannot merge a trust with anything! The articles, the memoranda, and the law do not permit it. An ancillary, popular myth that has been flying high these few hours, is that RBTT’s Peter July endorses all such mergers. This is a distortion of what July said, and such a distortion is untrue, as the RBTT banker was referring to banks, and not trusts. Another distortion and myth is that a FCB/UTC “merger” has the support of the Central Bank of Trinidad and Tobago. No where has the Central Bank made such a statement, and it cannot, because you cannot merge a trust!! The swirl of confusion does not end there. One report has it that Clarry Benn has been given a six-month extension as Executive Director, on the firm understanding that “when time for retirement comes....individuals ought to retire.”

The fact of the matter is that Clarry Benn departed as Executive Director one year ago when he attained the age of 60, so he does not have to retire, as he has already retired! Benn is now on contract, a situation largely influenced by the fact that there is a dire shortage of suitable experienced financial executives in Trinidad and Tobago. Further, a high Government source said that very senior personnel were hired in consultancy positions because they were not employed by the state. Clarry Benn is not employed by the state either.! For the records, the Unit Trust Corporation is not part of the Public Service. Its compensation, personnel and retirement arrangements are not part of the Public Service, and are based on surveys of the local community. What is sad and possibly dangerous about speculating publicly about a merger between a bank and a trust, is that it could undermine the confidence the public holds in the eminently successful Unit Trust Corporation many of whose unit holders have been panicked by the thought that their very solid investment is now going to be handed over as part of a merger with the bank. This concern needs to be put to rest immediately as such a thing cannot occur! The funds of the UTC remain under the ownership and ultimate control of the unit holders who are protected by Law from having their funds used for any purpose other than intelligent investments such as are done by mutual funds. People in high office are urged to be cautious and careful lest they make pronouncements that are grossly inaccurate and misleading and can destroy people’s lives by outlining uses of their hard earned funds that are entirely impossible.

LLOYD CARTAR
Westmoorings