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Sunday 15 December 2019
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Cabinet approves Clico plan

THE CABINET’s Finance and General Purpose Committee (FNGP) yesterday approved the proposed plan to replace the current shareholders agreement which gives the State authority to manage the assets of CL Financial (CLF).

As such the matter is expected to return to Cabinet this week for decision, sources said yesterday.

The FNGP met at the Office of the Prime Minister, St Clair, ahead of this week’s expiration of the current agreement.

It is understood that the FNGP considered three options yesterday: 1) giving the company back to shareholders for them to sell; 2) making the company a State enterprise and 3) establishing an agreement with shareholders giving them managerial functions but for the purposes of repaying the State. It is understood the FNGP agreed with the third option. The State would hold a veto power over the disposal of assets and prices.

At an annual general meeting on July 24, shareholders of CLF agreed to give the State a 30-day extension of the current shareholders agreement, the fourth such extension. This extension is up this week.

The shareholders agreement giving the State control of CLF assets was first signed in June 2012 after reports of the unauthorised sale of millions worth of CLF group assets behind the PNM Government’s back and notwithstanding an earlier MoU of January 2009.

The original June 2009 shareholders agreement carried a term of three years and in the interval the State was to sell assets to recap bailout billions handed over to CLF and its insurance core Clico, the country’s largest insurance company. However, in June 2012 the agreement was extended for six months to December 2012. Thereafter it was extended a second time until May 2013 and then a third time.

The terms of the draft before Cabinet and its subcommittee have not been formally released, but Finance Minister Larry Howai has stated the agreement would not result in Duprey or his family benefitting.

He said the State would recoup some of its $20 billion bailout but the CLF shareholders would retain about $1.6 billion in assets for the purpose of continuing to service debt obligations to the State.

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