Afra: Make Sagicor offer for Clico/BAT public

THE sale of the traditional insurance portfolios of Clico and British American Trinidad (BAT) has come into question after the Central Bank, on Monday, announced that Sagicor Life Inc was selected as the preferred bidder for the assets. Sagicor Life is a subsidiary of Sagicor Financial Corporation.

The Central Bank stated the “transparent, competitive and rigorous bidding process” – as part of the resolution strategy to stabilise the activities of the institutions – was conducted by Clico/BAT and was consistent with “independent valuations.”

The bank did not disclose the value of Sagicor's offer which industry observers on Tuesday said was a question that has to be answered.

Chartered surveyor Afra Raymond said it was surprising that the amount offered by Sagicor for the Clico/BAT assets and the basis of the decision were not made public.

“One would expect that in keeping with a better standard of disclosure the public would be informed of the amount paid by Sagicor and the assessment carried out in making the decision.”

He said the sale marked the end of the Central Bank's “questionable control of those companies even after the legal conditions for ceasing that control had been satisfied.”

“The Central Bank TT was to have relinquished control once the companies were out of the financial peril which necessitated the regulator's intervention in the first place and of course those companies have been reported as profitably operating for some time now.”

In March, during a press conference, Finance Minister Colm Imbert had said there was "a little glitch" as the recommended buyer had offered the lowest bid for the Clico portfolio. He did not disclose then the bidder, how much had been offered and did not comment on BAT.

"The argument being made is the company that made the lower bid is a strong, substantial company and the risk of that company failing in the future is lower and the view is we should go with the lower bid because it is being assigned to a very stable local company," Imbert had said.

"The other view is that the other company is not as stable as the first one and won't be able to manage the portfolio and there will be a higher risk to policyholders. The Central Bank (which has responsibility for the portfolio) is concerned about selling the portfolio to a company unable to manage it... I have to protect the public interest and (get) maximum return for the country to make sure as much of that $23 billion that was put out (is recovered)."

Reports had indicated that four companies had bid for the Clico portfolio, but that eventually came down to two: Sagicor, the preferred bidder, and Maritime Life – a subsidiary of the Maritime Financial Group.

Express reported on Tuesday that Sagicor's offer for Clico/BAT was $300 million less than Maritime's which it said had issued a pre-action protocol letter to the Central Bank last Friday.

A financial services source questioned if CL Financial – the parent company (owner) of Clico/BAT, in which Government had a shareholding after the 2009 bailout– had any role in the sale of the assets.

"Who really sold the assets? The owners or the directors? The directors are from the Government,” said the source.

“If they (directors) did, then the Government decided (to sell) because there will be a liability on the directors of the company, if they sold it for $300 million less.”

The source said the Central Bank would have complied "with any general or special directions of the minister and shall act after consultation with the minister.”

Sagicor's acquisition of Clico/BAT is not yet official as "schemes of transfer" of the assets must first be done and meet regulatory approvals which is expected to take several months, the Central Bank said. Until then, Clico/BAT will continue to administer their portfolios.