Colonial Life Insurance Co (Trinidad) Ltd (Clico) has recently reported a hefty after-tax profit of $2.3 billion for 2023. This is certainly good news for the company in terms of financial performance.
However, the shadow of the 2009 state bailout of its parent company, CL Financial, continues to loom large with economic, legal, political, and ethical implications. The aftermath of this bailout has created a mixed legacy for Clico, with ongoing concerns that are still relevant today.
Despite the profit increase from $621.4 million in 2022 to $2.3 billion in 2023, a significant portion of this gain was attributed to the disposal of subsidiary Methanol Holdings International Ltd (MHIL) and profits from energy operations totaling $958 million. The sale of MHIL raised eyebrows, particularly due to auditors KPMG being denied access to necessary audit working papers and group reporting.
While the sale of MHIL to Consolidated Energy Ltd (CEL) was completed in December 2023, concerns linger about the history of controversial conduct at Clico and CL Financial, including previous fire sales of valuable assets. The recent transactions and appointment of a new board have made stakeholders wary of any repetition of past practices.
Despite the Central Bank relinquishing its emergency control in 2018, the repercussions of the 2009 bailout are far from over. A court case involving citizens and institutions from Antigua and Barbuda and Grenada against the TT Government over CLF subsidiary British American Insurance Co Ltd (BAICO) is pending in the Caribbean Court of Justice (CCJ), alleging discrimination and violation of Caricom treaty law.
As the CCJ reserved its ruling on April 30, these ongoing legal battles and financial uncertainties emphasize the long-lasting effects of the 2009 bailout on Clico and its stakeholders. The road to full recovery and rebuilding trust will undoubtedly be a challenging one for the company.
