Newsday Editorial
Wednesday, February 11 2009
Trinidad and Tobago News Blog
www.trinidadandtobagonews.com/blog
Contrary to reports that had been bruited around that government while it had moved swiftly to bail out Clico and three other CL Financial subsidiaries had not moved to assist the Hindu Credit Union (HCU) it was revealed on Monday that Government had offered a bail out package similar to the one presented to Clico, but that this had been rejected.
Indeed the offer was made in May 2008 some eight months before the package deal was placed before Clico. Instead, the offer document in which the terms had been spelt out, was not agreed to at a special shareholders meeting called on June 20. The disclosure made by Hindu Credit Union President, Harry Harnarine two days ago of the HCU shareholders dismissal on the bail out offer must have come as a surprise to most observers, many of whom may have been inclined to believe the reports that Government had declined to assist the Credit Union.
And the general public would have been entitled to hold this point of view in the absence of an official statement. Rather, the only publicly known official actions had been the appointment of a firm of auditors and later that offer of a liquidator under the co-operative act. The duties of the liquidator it has been pointed out were to ensure that the assets of the Hindu Credit Union were sold off at the highest possible bids.
Meanwhile, a holding company later called the Hindu Credit Union Depositors and Shareholders Group Limited (DSGL) would be formed in the wake of an agreement reached at the June 2008 shareholders meeting. This company would hold shareholders rights relinquished to it. And as Harnarine stated on Monday the (assets of the HCU would be divested into a company to be formed by the shareholders).
The DSGL, the HCU president has intimated had already submitted a proposal to the Ministry of Finance for a deal to purchase the Credit Union assets for $720 million. The question must be asked, however, why was the Government’s offer of a bail out not handled and made public in much the same manner as Clico’s had been. Had this been done a considerable amount of the later rumours would not have been spread and there would have been a greater public understanding of Government’s approach to the HCU issue. Instead the Government goofed off and a different impression was conveyed.
Clearly, this was one occasion where proverbial silence was not golden. The minds of the estimated 100,000 depositors as well as those of their families would likely have been more at ease. And while a portion of the HCU depositors may have had reservations at least there would have been an official signal that Government was prepared to intervene by way of a bail out. Instead, the public perception of official action has been the move to liquidate the beleaguered Hindu Credit Union.
Government fell down on its public relations particularly when it is appreciated that the Hindu Credit Union 100,000 membership is one of the largest Credit Union membership not only in Trinidad and Tobago but in the entire Caricom community. So that its handling of the matter was clumsy. It would have been communicating its proposed intention to bail out the Hindu Credit Union to an immediate audience of HCU members as well as their families, relatives and friends and, this cannot be ignored, yet another powerful audience this time of disinterested persons.
The uncomfortable end result was that what the general public and possibly the majority of HCU shareholders perceived as the principal official intent was the liquidation of the Hindu Credit Union under the Co-operative Act.
http://www.newsday.co.tt/editorial/0,94970.html
Trinidad and Tobago News Blog’s URL for this article:
www.trinidadandtobagonews.com/blog/?p=957
I am interested in knowing what all those who accused the Governmnet of Trinidad and Tobago, of racism, for bailing out Clico and not the HCU have to say now. My expectation is that they would be totally silent. Why did the HCU wait so long to let the public know that the “PNM Government” had proposed a rescue package, which the members rejected? Did it not suit their political convenience to let their people, and all the people know this? Even that esteemed UNC-A member,Jack Warner did not seem to know this, or else he would not have offered to bail them out when they had already rejected a government bailout and the controls it would bring. Is it that they want to continue loans to Costa Rican nationals, or is it political mischief as usual?
Harnarine: What is Jack’s agenda?
The Hindu Credit Union has never asked for a bailout, says HCU boss Harry Harnarine. He was speaking with the Guardian at the HCU’s Chaguanas headquarters yesterday. Harnarine said in May 2008, Government offered the HCU $400 million in loans to get the company out of troubled waters but in turn, Government wanted control of the HCU’s assets.
Full Article…
What do you mean by “their people”? Are you referring to the the people who had money invested in the credit union or “other”?
I am assuming that Mr.Olumbeli was asking for clarification of what I meant by “their people” in the first post.
. The adjective is directly connected to the noun
“members” as it appears in the previous sentence. The decision could not have been taken by all the members, but tby those who attended the meeting, and the executive.
Their people, the members generally, were deprived of an opportunity to make a decision on this. It follows then, that the rest of the people, those who are not HCU members, are “all the people”. I hope this is clear enough for you.
HCU was going broke
Minister: Govt did not intervene because...
Finance Minister Karen Nunez-Tesheira says the Government did not intervene in the affairs of the Hindu Credit Union (HCU) in the same way it did with CL Financial because although the credit union insisted it was suffering a short-term cash flow problem, it was actually going broke.
The fact is the government offered HCU a package similar to the one it offered to CLICO and the offer was refused. I bet you if Panday was the Prime Minister the offer would have been accepted regardless of the control issue. It is obvious that the refusal was influenced by who was the Government at the time.
Like the perpetual cries to India to take them away fro predominance in the commercial sector of Trinidad and Tobago, the usual suspects wasted no time in crying “wolf” once again. What a bunch of………..