GEORGETOWN, Guyana, CMC -Guyana has started legal proceedings to recover more than US$34 million from the Trinidad-based CLICO Investment Bank (CIB) Limited, which has been in compulsory liquidation.
Attorney General Anil Landall SC and the CLICO Life and General Insurance Company (South America) Limited, also in liquidation, have launched the lawsuit naming CIB as the defendant.
According to the lawsuit, the issue dates back to the financial collapse of CLICO Group, which includes several companies operating throughout the Caribbean and controlled by Trinidad-based CL Financial Limited and its principal, Lawrence Duprey.
The lawsuit states that the collapse, which started around 2007, caused significant financial losses throughout the Commonwealth Caribbean, especially in Guyana, where CLICO Life and General Insurance Company suffered greatly.
The statement from the Office of the Attorney General said the claimants are asking the court for several declarations and orders, including the enforcement of a 2019 decision against CL Financial Limited, that they are now attempting to apply to CIB.
They are asking the court to substitute CIB as the defendant in place of CL Financial Limited and to permit the execution of a money judgment against CIB’s assets in Guyana. Among the most significant claims is the allegation that CIB, a subsidiary of CL Financial Ltd., was involved in transferring over US$34 million to CLICO Bahamas Ltd. This sum was irrecoverable following the collapse of the group.
The claimants argued that this transfer was made because it would cause financial harm to CLICO Life and General Insurance Company and its policyholders in Guyana.
They also allege that CIB and its parent company engaged in a series of fraudulent activities, including insider loan fraud, and participated in a pyramid scheme. They claimed that CIB borrowed extensively from other companies within the group, including CL Financial Limited, with no intention of repaying these debts and granted loans on favorable terms that contributed to the financial collapse of the entire group.
According to the lawsuit, the financial crisis within the CLICO Group had far-reaching consequences for Guyana, noting that (One Guyana dollar=US$0.004 cents) to the National Insurance Scheme (NIS) to prevent its failure due to the losses incurred from the collapse of the CLICO Group.
The government is now seeking to recoup these funds from CIB, and the claimants also accused the CIB of breaching its fiduciary duties, acting dishonestly, and participating in the unlawful and improper transfer of funds.
They argue that CIB, its parent company, and other subsidiaries operated as a single, integrated economic unit, disregarding their separate corporate identities to the detriment of creditors and policyholders.
According to the statement of claim, the collapse of the CLICO Group was exacerbated by corporate mismanagement, financial impropriety, and the concealment of the group’s true financial state from regulators and governments.
The claimants said that the corporate structure was a facade designed to obscure the group’s financial realities and to evade legal obligations.
They are seeking various remedies, including an order that they are entitled to trace the sum of US$34,069,057 together with interest thereon into the monies being held by the Registrar of Deeds in Guyana, have an equitable title to it and that the said sums are being held in trust for them.
According to the claimants, CIB was party to certain debentures with two companies incorporated in Guyana: Bosai Mineral Group Guyana Inc. and Bosai Mineral Guyana Services Inc.
They are arguing that the monies due to the defendant under the debentures amount to approximately US$20 million and are currently being held by the Registrar of Deeds to their credit.
According to the lawsuit, the defendant and other members of the CLICO Group are prevented from recovering the sum held by the Registrar of Deeds. Last month, Justice Navindra Singh of the Demerara High Court denied CIB’s request to start accessing US$20 million that was placed in escrow.
In addition, the judge prohibited the company from bringing similar cases in the Guyana High Court without the court’s permission.
The claimants seek several declarations and orders, including for equitable contribution, damages for fraud and conspiracy, restitution, and any further orders the court deems just. They also request that the court declare CIB liable to account for all assets acquired or derived from them and indemnify them for the losses suffered.
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