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British American to lose building

British American to lose building


The dream headquarters of the local branch of British American Insurance Company Ltd presently under construction at Egmont Street, Kingstown, looks set to become the property of the government of St Vincent and the Grenadines.{{more}}

About a month ago, work on the $15.5 million building that was to house the local operations of the insurance company came to a standstill, as the liquidity problems facing its parent company, CL Financial Group of Companies, started to have its impact.

Investors, spurred into action by word of CL Financial’s woes, started surrendering policies, which added to the cash flow problem that already existed in the various companies of the group.

Now British American, like the other CL Financial companies, is in need of an injection of cash so that it can meet the demands of matured or surrendered polices and investments.

Therefore, even if the funds, which had been allocated to the building project, were available, a company source explained to SEARCHLIGHT, continuing a large building project in the current circumstances is not in the company’s best interest.

In Parliament last Thursday, March 28, Prime Minister Dr Ralph Gonsalves announced that British American had a shortfall of $50 million in the statutory fund at the end of 2007.

The company had a total of $190 million in insurance liability, while they had only pledged $140 million to the fund.

The pledge should have matched the liability dollar for dollar, according to Legislation governing the operations of insurance companies here.

Speaking to SEARCHLIGHT earlier this week, Dr Gonsalves said that he has issued instructions for the property to be evaluated and for arrangements to be made for the government to purchase it and put the money in the statutory fund.

In Parliament, the Prime Minister further elaborated on plans that have been put in place by the regional governments to deal with the ongoing liquidity crisis that has gripped the member companies of the Trinidad and Tobago based CL Financial Group of Companies.

In relation to CLICO Barbados, Dr Gonsalves explained that the Barbados government has made BDS$10 million available to deal with payments for matured policies and annuities in the OECS.

A further BDS$12 million has been repatriated from the Caribbean Investment Bank (CIB) to CLICO to further assist with the liquidity crisis.

Meanwhile, according to the Laws of Trinidad and Tobago, only policy holders residing in the twin-island state can get payment from that country’s statutory fund.

The Trinidadian government has, however, given the assurance that the other policyholders with CLICO Trinidad, including those in St Vincent and the Grenadines, will receive payments on matured investments from assets that are outside of the statutory fund.

Last Saturday, at a rally held at Cumberland to celebrate the eighth anniversary in government of the Unity Labour Party (ULP), Dr Gonsalves announced that the Cabinet of Trinidad and Tobago voted to channel US$50 million from the CARICOM Petroleum Fund to assist with the British American liquidity problem in the OECS territories.

A meeting of OECS Ministers of Finance with those from Barbados and Trinidad and Tobago was scheduled for Antigua and Barbuda yesterday, Thursday, April 2nd, to “iron out” some issues regarding the money.

Advice has also been sought from the World Bank and the International Finance Cooperation to help ensure that such a meltdown doesn’t happen again.(KJ)