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Gonsalves wants TT equity for BAICO

Published:Friday | July 23, 2010 | 12:00 AM

St Vincentian Prime Minister Dr Ralph Gonsalves says he expects Trinidad to get involved in the formation of a new entity to replace the financially troubled British American Insurance Company (BAICO).

The company is a subsidiary of collapsed CL Financial group, a conglomerate domiciled in Trinidad.

"I do not expect the government of Trinidad and Tobago to walk away," Gonsalves told reporters.

BAICO has been placed under judicial management, and the Organisation of Eastern Caribbean States and other regional governments are partnering with investors to form a new company to assume its liabilities.

Gonsalves appears to be seeking from the Kamla Persad-Bissesar administration similar commitments to that made by her predecessor.

The Patrick Manning administration, he said, had agreed to contribute US$100 million, in addition to the US$50 million it has given from the Petroleum Facility, to aid with the capitalisation of the new company, which will need an estimated US$400-million injection.

"The fact of the matter is this, it is clear that CL Financial took resources from British American and invested it in several places, including in Trinidad and Tobago," Gonsalves said.

The Eastern Caribbean Central Bank said it is working with the judicial managers to assess "whether BAICO is able to recover funds from certain individuals or organisations who may have contributed to BAICO's financial and other problems".

"The relevant authorities within each of the Eastern Caribbean countries, where BAICO conducted business, may also need to evaluate and pursue potential criminal activity regarding BAICO," the statement said.

It warned, however, that legal action, whether criminial or civil, may lead to the recovery of more assets, but "is a long and often costly road".

The prime minister said he is awaiting a meeting with the Trinidad's Finance Minister, Winston Dookeran, after sending a request on June 4 to determine what support might be forthcoming.

- CMC