POWERLESS

All HCU business taken out of Harnarine's hands


Aretha Welch


Friday, July 25th 2008(T&T Express)


picture
ENOUGH ASSETS: Hindu Credit Union president, Harry Harnarine during a press conference at HCU's administrative centre in Edinburgh Village, Chaguanas, yesterday.-Photo: STEVE McPHIE


The future of the Hindu Credit Union and its subsidiary companies looks grim, says HCU president, Harry Harnarine.

The HCU group which employs over 800 employees has, among its assets, several plots of land, housing settlements, two radio stations, a medical centre, a tertiary-level institute and a security firm.

HCU board president, Harry Harnarine said at a news conference in Chaguanas yesterday, that around 7 p.m. on Wednesday representatives working on behalf of the Commissioner of Cooperatives visited the company's main branch in Chaguanas and ordered the guards out. They then proceeded to take over the premises and all HCU subsidiary offices, he said.

The Commissioner of Cooperatives, Charles Mitchell, applied to the High Court and got several orders on Wednesday, taking full control of HCU.

Harnarine said it would be hard for the group to regain credibility after the incident and the credit union and all other associated HCU companies would now be closed indefinitely, as all power has been taken away from the board while the official audit which the Commissioner of Cooperatives ordered continues.

Harnarine said the two radio stations were now in auto-pilot, as employees could not put together newscasts under the circumstances. Harnarine said he could not say much concerning the job security of the workers at this time as all company business has been taken out of his hands.

When the Express visited the HCU's main office in Chaguanas yesterday, the gates were padlocked and a few customers stood outside. One woman who wished to remain anonymous told the Express, "I came yesterday, they told me they would be open today."

However, no one was there to greet her. She added, "I have a little change with them but I can't afford to be coming here everyday."

Harnarine said the company's customers have been very patient thus far and if the HCU's assets are liquidated soon they could expect to get their deposits back within the next six months.

Harnarine described the incident in which the board was locked out on Wednesday night as a "hostile takeover" and questioned why the authorities acted in such a manner and did not wait for the company's cooperation the next day, as he claims a meeting with the HCU and the liquidator had been scheduled for yesterday morning.

On Wednesday evening Harnarine's lawyer, Odai Ramishand, told the Express he was pleased that a liquidator had been appointed but Harnarine said the pleasure ended once they received a copy of the High Court order and understood that it meant all employees and board members would be forced to stay away from the group's offices. He told the Express he was disappointed and would be going to court to have the injunction discharged.

The injunction claim form states that the defendant's (HCU) employees, agents and management are "restrained". It also said they could not refuse the entrance of the auditing company, Ernst and Young, which has been commissioned to do an audit of the company's records from entering the premises.

HCU officials have also been warned against deleting, destroying, tampering with or defacing the books, accounts, records, securities and/or cash which the credit union has in its possession, while the audit continues.

Harnarine said from the company's calculations the group fell short of meeting their overall liabilities by $153 million, though their asset base stood at an estimated $776 million.

Last laugh for Enill?


Ria Taitt Political Editor



Friday, July 25th 2008(T&T Express)



Six years ago Conrad Enill, then the freshly minted Minister in the Ministry of Finance, caused a major furore which turned into a spirited demonstration by Hindu Credit Union members outside the ruling party's Balisier House headquarters, resulting in a closed door meeting between Prime Minister Patrick Manning and HCU head Harry Harnarine, and a public apology from Enill to Harnarine.

Enill had made the mistake of saying that the HCU was under investigation, a statement which Manning described as "unfortunate" and Harnarine as "reckless".

Eventually Enill apologised. Standing amidst some 300 employees and members of HCU, he put his hand around Harnarine's shoulders and said: "If this is what it has caused then I do apologise. I never meant to cause any destruction. I am about building the credit union sector".

Was Enill today having the last laugh? Speaking to the Express yesterday, Enill explained that at that time, although he had sent a team from the Ministry of Finance to the HCU, they were not allowed entry.

"So when I made the statement that they were being investigated, which were the instructions that I had given at the time, there was no public officer in there. In those circumstances I had to indicate that the HCU was correct there was no investigation.

Did this denial of entry to the Ministry of Finance officials tell a story? Enill replied: "I don't know what it tells us. But those are the facts".

Did Government act correctly in dealing with the HCU? He said the Government knew that it needed to change the governance structure, and it started with insurance companies and was moving to the credit unions. He said the fact that Government had developed a policy position and draft legislation on the issue, suggested that the Government was "in the process of doing what it needs to do".

With respect to the HCU, he said while the Ministry of Labour was monitoring agency, "when one looked at an organisation like the HCU and the way it is being run...there is nothing that tells you there is a problem, unless you actually go in, and in many instances there must be a requirement under the law before you can do that". He said therefore the "appropriate Ministry took the appropriate action".



"appropriate Ministry took the appropriate action"

really means "Let them cook in their own fat".

Sat: Family has foreign property

...action nothing to do with race


Anna Ramdass


Friday, July 25th 2008(T&T Express)


Secretary General of the Sanatan Dharma Maha Sabha Sat Maharaj has written to Ernst and Young, Commissioner of Cooperatives Charles Mitchell, as well as provisional liquidators R Rampersad and Company, identifying international assets of the Hindu Credit Union (HCU).

"I have written to Mr Rampersad, Ernst and Young and Commissioner of Cooperatives and included all the properties owned by family (of HCU head Harry Harnarine) and board members of the Hindu Credit Union," said Maharaj in an interview with the Express yesterday.

"We have in our possession documents showing the amount of properties that members of their family own in Miami. Dozens of expensive properties," claimed Maharaj.

Maharaj said he wanted to make it quite clear that this has nothing to do with race. "It has to do with mismanagement and Harry Harnarine taking advantage of his own people," he charged.

Maharaj said the action by the Commissioner of Cooperatives to obtain an order from the High Court to freeze the assets of the company was long due.

"He should have acted more expeditiously, almost three years people have been complaining that they cannot get their money which has matured," Maharaj said.

"For more than three years people have been receiving bounced cheques and they refused to act. The issuance of a bounce cheque is a criminal offence, when they went to the police, the police refused to act," said Maharaj.

Maharaj added that this issue has nothing to do with Indian or African. "Mr Harnarine has boasted that his membership is a mixed membership of Afro Trinidad and non Hindus," he said.

He claimed the authorities have acted because they saw the HCU as an insolvent institution which mismanaged the affairs of its members.

So even with a booming economy in T&T and a famed business acumen how it is that the "Hindu credit union" is now insolvent?

quote:

Originally posted by Eric's_Revenge:
So even with a booming economy in T&T and a famed business acumen how it is that the "Hindu credit union" is now insolvent?

???? Liabilities = $ 153 Million and Assets = #776 Million... that's a healthy ratio of 1:5 or approx. 2:8, No?

wanna take a look at the USA balance sheet...

Minister: Govt not sure of giving HCU $$


Aretha Welch


Saturday, July 26th 2008 (T&T Express)


Though the Government has now taken over the Hindu Credit Union, Minister of Finance Karen Nunez-Teshiera has said her Ministry can give no assurances as to whether or not they will be giving the credit union extra money, if its needs more funds to pay back its depositors.

During a press conference at her Ministry in Port of Spain yesterday the Minister said, "I cannot commit the Government beyond saying that we are looking at it very closely."

She said when her Ministry has all the information she will come back with a policy.

The Minister said until they know for sure (based on an audit) how many depositors and deposits are involved in the situation she cannot say what the course of action will be.

Earlier this week the Commissioner of Cooperatives, Charles Mitchell, applied to the High Court and got several orders on Wednesday, taking full control of HCU.

However, she assured the thousands of depositors who have funds in holding at the HCU that the government is very concerned and the matter will not be stalled.

She said she understands that many of the members of the credit union are not rich people and thus they are working quickly to come up with a prescription for the problem.

She admitted that based on the interim audit that has been done by the Ernst and Young company that the matter does involve some level of insolvency.

She said the funding for the enquiry and court hearing thus far has come from the Ministry of Finance and this should be an indicator that the Ministry wants the matter resolved. The Minister said in the meantime she does not want citizens to lose faith in the credit union system.

quote:

Eric_racist: So even with a booming economy in T&T and a famed business acumen how it is that the "Hindu credit union" is now insolvent?

As PNM's representative on GNI the better question would be: why T&T has booming and rising incidence of crimes in spite of the lowest unemployment rate in its history? Over to you Mr. PNM.

I hope they jail these suckers and throw away the key!

quote:

Originally posted by TK:
As PNM's representative on GNI the better question would be: why T&T has booming and rising incidence of crimes in spite of the lowest unemployment rate in its history? Over to you Mr. PNM.

Indians in the position of government are unable to show leadership, except in crime and corruption.

We want our $25m

Depositors to sue HCU for fraud:



Monday, July 28th 2008(T&T Express)




Hindu Credit Union president Harry Harnarine faces a new legal challenge as members of the failed Chaguanas cooperative society are planning to file fraud actions in court to recover $25 million in deposits.

Ten depositors who fear they will not get back savings they invested in the HCU are expected to file actions in the San Fernando High Court by Wednesday.

Several of the credit union members have held their funds in HCU accounts for several years and approached Harnarine personally to recover their money after they were turned away empty handed when they went to HCU branches.

They are being represented by San Fernando based attorney Anand Ramlogan who told the Express in a telephone interview yesterday that he was exploring the legal avenue of alleged civil fraud on behalf of his clients.

On Wednesday, Commissioner of Cooperatives Charles Mitchell obtained court orders which allowed his representatives to take over the HCU's Chaguanas offices and all its subsidiary companies.

The court orders froze HCU assets, restrained its 800 employees from entering its offices and will allow auditing firm Ernst and Young to complete their investigation of the HCU's financial records.

Harnarine has said previously that the HCU would fall short of its financial obligations to shareholders by $153 million even though it currently has $776 million in assets.

He told the Express recently the HCU had repaid depositors millions of dollars following a run on the financial institution that started three years ago.

Concerns have also been raised that the current Cooperative Act falls short of protecting shareholders of credit unions and allows for no recovery of assets owned by HCU directors that could have been bought using depositors' funds.

Harnarine, who owns a property in Florida and a mansion at Cunupia, said earlier this week he purchased the Miami property in 1998 and has been working on his home in Trinidad for years.

An inspection team from the Commissioner of Cooperatives found last year that people bought $25 in HCU shares and received $100,000 loans the same day with no guarantees while HCU directors continued to serve on the board even though they defaulted on loans, it was reported.

Harnarine yesterday did not answer several of the phones he has regularly been contacted on.

HCU officials borrowed millions



By Andre Bagoo Sunday, July 27 2008(T&T Newsday)



HIGH PLACED officials of the Hindu Credit Union (HCU) borrowed millions from the credit union which were not repaid. An official, who held only $30 in shares was lent $500,000.

Another official got a loan for $1.6 million at one percent interest, but the interest was calculated at only 0.5 percent. Another member bought only $25 in shares and on the same day was able to borrow $100,000.

And a Costa Rican who was not a member and had no shares got a loan for half a million which was not paid back.

These are just some of the widespread violations of credit union laws as well as the HCU's own by laws, which were among the grim warning signs unearthed since 2007 in a detailed report submitted to the Commissioner for Co-operative Development.

Last Wednesday, after years of concerns and complaints about the HCU the Government finally acted, obtaining an ex parte order which froze the union's assets and appointed a provisional liquidator to manage what remains of the cash-strapped, but asset rich organisation.

Today, many members of the union are fearful that they will not be able to get back the money that they invested. Delinquent borrowers, too, must now realise that they are going to be called upon to account and repay.

The Commissioner's report, dated June 8, 2007, was prepared by a seven member inspection team and submitted to Charles Mitchell, the Commissioner for Co-operative Development after the former Commissioner, Bheemal Ramroop, ordered an inspection of the HCU under Section 3 of the Co-operative Societies Act on July 4, 2006.

The report concludes: "In our opinion the HCU has not adhered to the Co-operative Societies Act, the Co-operative Societies Regulations and its by-laws. Further, the HCU has violated most of its written policies (loans, investments, etc).

"The core business of the Society (the granting of loans) was replaced by the acquisition of properties. This placed the Society in an adverse cash flow position."

The seven member inspection team examined HCU records as far back as January 2000 and visited all branches of the HCU during the period September 18 to September 26, 2006.

Among their findings were: illegal and delinquent loans to several HCU officials, mortgages in violation of company by laws, illegal loans to HCU subsidiaries, incomplete and unsigned board meeting minutes, questionable land transactions, and million dollar discrepancies in the union's financial statements.

So that the HCU story began long before the High Court order granted on Wednesday by Justice Nolan Bereaux. The Government was aware that all was not well with the HCU which, based on the 2007 report, was an organisation destined for a bad ending.

Among the findings of the report with regards to the granting of loans, there was evidence of loans to non-members as well as delinquent loans to HCU officers.

"Generally it was found that persons became members by purchasing $25 in shares and received huge loans in excess of $100,000 on the same day. There was little or no securities found for these loans," the report found.

"The fact-finding sheets in members' files found that although members did not qualify for a loan, the loans officers were instructed to grant these loans through telephone conversations...In some cases these loans subsequently became delinquent."

Loan payments were disbursed even though there were incomplete loan application forms, no valuations of securities offered and violations of loan agreements. There was also "a large number of unsecured loans", as well as loans granted to non-members without the approval of the Commissioner. For example, a non-member who is a Costa Rican was granted loans with a balance totalling roughly $500,000 at the time of the report.

Of the delinquent loans unearthed, the report concluded: "During the period 2000 to 2003, huge loans were granted to persons on the same day that they became members." But additionally, a great number of delinquent loans went to HCU officials.

"Huge loans were granted (over $500,000) in excess of their (the HCU officers') shareholding (with some officers holding shares of only $30)," according to the report.

Among these were:

a $1.6 million loan to an official of the HCU with a stated loan interest rate of one percent. However, review of the loan by the inspectors revealed that interest was, in fact, calculated at 0.5percent. Further, several phantom deposits of $100,000, which were withdrawn exactly one week later, were discovered on the official's statements;



...a loan to another official totalling $721,000 even though that official held $1,000 in shares;



...a loan totalling $662,165 between the period August 16, 2001 to December 10, 2002 to a member with $2,110 in shares at a rate of zero percent. These loans became delinquent by May 6, 2005 but the member was granted a further loan on that date for $150,000;



...outstanding loan balances to a member with only $25 in shares totalling $536,156. This member continued to be granted loans despite being delinquent;



...a loan totalling $305,000 for an employee who held $5,646;



...a loan for $393,000 to another official who had a shareholding of only $7,000;



...a loan totalling $268,025 to a union employee who held $30 in shares;



...similar loans, like one totalling $150,651 to a member with a $25 shareholding;



A review of all senior management loans and a random selection of staff loans found instances where approvals were not granted, but funds were disbursed; that senior managers were granted loans at varying rates of interest at the same time and that "there were instances where senior managers were granted loans, with no security offered, in excess of $500,000".

Officers employed with the union continued to serve in their posts despite delinquent loans, in contravention of credit union laws. Loans were not granted in accordance with Section 43(3) of the Co-operative Societies Act and By-Law 29 (F).

The inspectors also found illegal loans to several of the HCU's 22 subsidiaries. "There were no approvals from the Commissioner for Co-operatives for the loans granted to the subsidiaries (which should have been obtained) in accordance with Section 43 (1) of the Co-operative Societies Act.

"We found that the loans to subsidiaries were granted inappropriately...There were no repayments for the loans. However, the accrued interest was capitalised," the inspectors found.

Questions were also raised over the HCU's financial statements, particularly one recording the appreciation of investment properties placed at $25 million without independent valuation being conducted. The seven inspectors also encountered difficulties when conducting their inquiries, including the "non co-operation from management resulting in the Commissioner having to intervene on several occasions."

Such was the case this year, according to a July 18, 2008 letter from the Commissioner of Co-operatives to the HCU, after another inquiry, this time by Ernst & Young was launched by the Commissioner.

"I wish to record my alarm and to state that I am taken aback by your statement that you cannot guarantee the security of the files...in the possession of the HCU whether at all times or during the course of the inquiry," Mitchell said in his letter, just one such letter in a long exchange of correspondence between his office, the HCU board and attorneys.

In a sworn affidavit dated July 22, Mitchell noted that there have been roughly 100 complaints against the HCU by its members, as well as 1,600 disputes referred by the HCU against delinquent members.

Additionally, there have been several court judgments against the union, notably a judgment in the sum of about $25 million against the union by the Export/Import Bank of the United States. According to Mitchell, the value of HCU fixed deposits and shares exceeds $25 million.

"I am of the view that the HCU is unable to meet its financial obligations both to its members and creditors," he concluded adding that it was now, "virtually impossible for the society to engage in its core business, that is, the facilitation of credit."

And on the issue of the HCU's core business, he noted, "the core business of the HCU, which is to be a financial intermediary, was replaced by the acquisition of properties which placed the society in an adverse cash flow problem."

This would appear to include property purchases noted by the inspectors in their 2007 report, such as a purchase of the HCU Convention Centre in Princes Town for $2.5 million without a valuation report on file. The property was valued at $1 million previously.

According to the 2007 report, some properties were sold for less than the purchase price, some were purchased and sold to the same person and there was no sale agreement for some properties for which deeds of conveyance appeared not to have been filed.

On Friday, Minister of Finance Karen Nunez-Tesheira hosted a press conference at the Ministry of Finance on Independence Square over the HCU.

Asked why the Government had taken so long to move in on the HCU, she said: "You have to have evidence that stands up in a court of law...You can't go on hearsay allegations. And one must remember that the issue was one of illiquidity as opposed to insolvency."

The Minister, a qualified attorney, added, "we did not have the information to go to the court.

The Commissioner of Co-operatives could not go to the court. The court does not lightly grant an injunction...The court must be satisfied that it is an urgent situation and that what you have brought to them is sufficient upon which they can act. Did we have that? No."

Asked what assurances the Government will make to HCU shareholders, she said the Government was planning to table legislation to reform the credit union sector. But she could offer no guarantees, saying the facts were not yet clear as the Ernst & Young inquiry was still on-going. She assured, "we are concerned. Clearly, we are concerned." So, indeed, are the shareholders of the Hindu Credit Union.

Worried employees form group


HCU COLLAPSE


Aretha Welch


Tuesday, July 29th 2008(T&T Express)


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Locked out: Some HCU employees who were locked out of their workplace yesterday.



Employees of the Hindu Credit Union (HCU) have formed themselves into a group to protect their interest following the granting of full control of the credit union to the Government.

Early yesterday at least four dozen of these employees gathered in front the HCU head office in Chaguanas demanding that they know what will be taking place with their pay cheques, national insurance and pension plans.

Mukeesh Babooram, spokesperson for the employees, also said that many employees had personal belongings in some of the buildings which they are now locked out of and wanted to know when they would gain access to their items.

He said the high level of security on the premises of the HCU's buildings which are now in the hands of a court-appointed liquidator is causing discomfort for those employees (such as those in the group's two radio stations Radio Shakti and Radio Masala) who have been allowed to continue work.

The spokesman said they thought that the State would have taken care of them but they have not.

When contacted HCU group president, Harry Harnarine, told the Express he expected the State to act more responsibly and call a meeting with the employees to deal with matters of job security now that the company's business has been taken out of the hands of the board.

On Sunday the depositors, shareholders, and employees of the HCU Group of Financial Companies came together to form the HCU Depositors and Shareholders Group (HCUDSG), at a meeting held at the HCU Administrative Centre in Chaguanas.

According to a press release from the group , the HCUDSG's main objective is to "Protect and safeguard our assets that are owned by us-the members, shareholders, depositors, and employees of the HCU Financial Group of Companies."

The group said its main representatives will be contacting the liquidator in the matter (R Rampersad and Co) and the relevant government ministries and departments to express their concern about the valuation process and possible liquidation of "their assets."

"HCUDSG will suggest and recommend measures that will ensure that HCUDSG members obtain the maximum market value for our assets: funds, properties, and holdings," the release added.

The group said they are against the idea of a hasty liquidation of what they consider their assets and want to be involved in the valuation and possible disposal of the items.

The Hindu Credit Union has been served with an injunction and all the assets which the financial group owns have now been frozen.

Last week Wednesday, Justice Nolan Bereaux granted an application to appoint R Rampersad and Company as a provisional liquidator for HCU's assets.

Harnarine: My hands are clean


-Aretha Welch



Tuesday, July 29th 2008(T&T Express)



Hindu Credit Union president Harry Harnarine said yesterday that the properties which he owns abroad were bought with money he made as a financial consultant as well as his former jobs in other financial companies, like the Colonial Life Insurance Company.

These properties have recently become the centre of attention in the HCU's financial saga.

Harnarine said thus far he feels like discussions of the HCU matter have been one sided and he has been portrayed in a negative light, almost as a thief. However he said he is a legitimate businessman who comes from a family which has been involved in the agricultural sector for sometime and he also has private interests in the real estate sector.

He said he has never stolen money from the HCU.

Harnarine said the depositors' demands for cash returns from the credit union came after several religious groups and radio stations in the country critiqued the company's policies and made their followers believe the company was experiencing financial trouble.

He said the company's liquidity trouble came as a result of the HCU having to make bulk payments to many depositors who all demanded their returns at the same time due to these public criticisms.

He said the criticisms came about as some groups thought that he should not have non-Hindus as shareholders or board members in the HCU.

Why are blacks going to the Hindu Union to borrow money?

Sunday 3rd August, 2008


Disgruntled depositors brace Harry




By Adrian Boodan(Trinidad Guardian)



A few disgruntled depositors approached HCU president Harry Harnarine on Friday, asking for their money.

They were among scores of depositors and shareholders gathered at Gaston Courts in Lange Park, Chaguanas, to discuss the state of affairs surrounding the collapse of the credit union.

"Where my money, Harry? Ah want it!" said Roy Bharat, as he stood next to the table where Harnarine was sitting.

A worried look on his face, Harnarine whispered something to the infuriated Bharat as he tried to calm him. The elderly man, looking no less troubled, walked off to find a seat in the audience.

One legged Sonnyboy Doon, 54, who had approached him earlier, wanted to find out when he would be able to get back the $20,000 he had deposited at HCU.

He said he wanted the money to buy an artificial leg and fix his house at Indian Walk in Moruga, which was falling apart.

Harnarine, who was sitting at a table, hands clasped together as if in prayer, assured the man he would address his concerns when he spoke at the meeting a little later.

˜I'll answer if guilty'

When Harnarine's turn came to address the concerned gathering, he said he accepted full responsibility for what had happened to the HCU.

Harnarine said he was ready to answer to the law if found guilty of any mismanagement or corrupt actions.

He declared, however, that the HCU was not insolvent, but that the assets of the HCU were undervalued by Ernst and Young in its preliminary report.

Harnarine said he was approached by lawyers of the liquidator on Thursday, indicating that they wanted him to take control of the operations of the group.

Harnarine said he wanted a judge to decide on this matter first, and he wanted a reassessment of the assets of HCU before he moved in. He and his lawyers will meet with the provisional liquidator.

After fall of empire, Harnarine says sorry



Curtis Rampersad



Sunday, August 3rd 2008(T&T Express)




Hindu Credit Union president Harry Harnarine has apologised to shareholders affected by the operational meltdown of the Chaguanas based financial institution that once boasted of holding more than $1 billion in assets, but collapsed two weeks ago when court ordered officers moved to seize control of the HCU offices.

"Of course I'm sorry," Harnarine said in an interview earlier this week.

"I've spent a lot of time in deep meditation and when I hear the cries of people who wanted their money back, yes, I'm sorry."

The most difficult task for him, he said, was trying to console and reassure many of the elderly HCU shareholders who had invested their life savings in the failed credit union.

He said it was painful to tell them they could not get back their money because the HCU was battling a four-year financial run that would have crippled many banks.

"Imagine trying to explain to a 68 year old woman about a run against the institution," he said.

Harnarine was unapologetic, though, when it came to his actions as the head of the HCU which moved credit union deposits and savers' money into non-traditional credit union business and into prime real estate and properties, security, media and communications (including a weekly newspaper and two radio stations), a medical centre and reinsurance businesses in the name of an entity called the HCU Financial Group.

"No, I am not sorry when it comes to the business. My hands are clean and at all times my directors and myself acted responsibly and they can lock me up if you find I own one share of any company, using HCU deposits, he said.

He maintained that depositors, many of them in the million dollar bracket, as well as the HCU's and the HCU Financial Group's 800 employees continued to support him, even as Commissioner for Co-operatives Charles Mitchell got a court order and, with more than 100 security officers, moved in to take control of HCU offices to allow auditors Ernst & Young to complete an investigation of the credit union's financial operations.

Harnarine said he had the backing of the board and depositors from as far back as 1997, when he took over and when, he said, the credit union was struggling with about 400 members and only $5 million in assets.

He said he told members in 1999 that the way ahead for the credit union was to have ownership in assets and while it was a different path from what other cooperatives had done, he insisted he did not venture beyond what was allowed in the Cooperatives Act.

The expansion process started with the acquisition of Bankers' Insurance, and then branched out into real estate, properties and companies. A security firm was established as well as a medical centre the Sajeevan Medical Centre and Harnarine also got involved in a media deal that quickly soured and left the Credit Union owing a US$4 million debt to Eximbank in the United States.

That matter is still before the courts.


The investment plan for the HCU was to divide its liquidity ratio into three areas:


Keep about $100 million in short-term deposits;

Divest into medium-term ventures such as its loans portfolio, which amounted to about $625 million;

Invest in long term group investments, which stood at more than $400 million.


This was not enough to withstand the run when it came.

Between 2004 and 2006, savers were banging on the HCU's office doors throughout the country, scrambling to get their money back.

Harnarine says the credit union paid out $400 million to angry shareholders, then offered to divest and sell off properties and businesses to satisfy others.

He says he was approached by CL Financial chairman Lawrence Duprey to iron out a $200 million deal to help absorb the HCU's financial burdens.

It involved the purchase of a Freeport property known as Savitur for $34 million, 253 acres at Penal Rock Road, the Govac building at Cunupia and the sale of the mortgage portfolio for $30 million to another CL Financial subsidiary.

It also involved the sale of two-thirds of the HCU Money Express and the sum of $100 million to be invested in the HCU Financial Group.

But Harnarine says CL Financial subsidiary Clico eventually offered $160 million in insurance premiums and the deal fizzled.

This matter is also now before the High Court.

By this time, depositors had filed more than 400 actions in the courts, demanding their money back.

Harnarine saw his empire's balance sheet tumble from more than $1.1 billion to about $890 million by the end of 2007.


Betrayed by politicians!

Harnarine's detractors have said that he has profited from the rise and fall of the HCU empire.

Harnarine says this is false.

He provided documents from his days at Clico which showed he made millions as a sales agent.

He admitted to owning a property in Florida that he said he was encouraged to buy by a successful Clico sales agent in 1999.

Although he had taken over the HCU in 1997, he said he was still attached to Clico up until 2001 and that it was earnings from that insurance company as well as other private businesses that allowed him to buy the property.

He said he was still paying off a mortgage on the place.

Harnarine said he also managed and owned other businesses a furniture business at his hometown, Rio Claro; a private investment and financial consultancy and a tyre and auto shop business in Miami that he sold after his brother and partner died. He also denies owning any property in Costa Rica, although records show that an unsecured loan was given by the HCU to a former Costa Rican official.

Harnarine is also insistent that he has been betrayed by a number of influential people and political parties and that it was this betrayal that led to the run and eventual decline of the Hindu Credit Union.

He feels he became "too powerful" too quickly for many of the Hindu leaders as well as the leaders of the opposition parties the UNC and the COP, he says.

And he claims that because he allowed non-Hindus to invest in the HCU, this angered Hindu religious leaders who continued to drag him, and the work of the HCU, down. He said he supported Government policy, especially if it included a return to developing the agricultural sector.

Harnarine said he and his family have been traumatised by the collapse of the HCU, but that this was not the end.

Sunday 3rd August, 2008



DPP sends HCU file to cops




by Shaliza Hassanali(Trinidad Guardian)



Director of Public Prosecutions Geoffrey Henderson has sent a confidential file containing information on Hindu Credit Union president Harry Harnarine to the Fraud Squad for investigation.

A dossier of confidential documents belonging to the Hindu Credit Union, some detailing alleged misconduct of Harnarine, was received by Henderson at his Port-of-Spain office some time last week.

On July 25, attorney Robin Montano also delivered several confidential documents on the HCU to Henderson at his office.

Among the documents, which Montano forwarded, was a list of properties with approximate value to the tune of $10 million.

Also included were the contents of a letter showing exorbitant legal fees charged for work done for the HCU, which had exceeded the amount owed to members by 50 per cent or more in some instances, it was learnt.

Montano, in the letter to the DPP, said the obvious question that arose was why would a credit union pay a lawyer to defend an indefensible matter more than the claim.

"There is only one obvious answer that makes sense," Montano wrote.

Also attached to the documents was a copy of a hand written letter from an attorney to HCU's CEO Ravindra Bachan, asking him to put $1.2 million for legal fees (not those already paid) on a fixed deposit in the name of another man, the Sunday Guardian was reliably informed.

"The obvious questions are who is (name called), and why was this being done?"

Montano also stated in his letter that there were serious questions to be answered by the Commissioner of Co-operative Development Charles Mitchell.

"Even if the HCU had gone "belly up," as it has, serious questions of possible fraud arise here that have to be answered," Montano penned.

"I call upon you to take immediate steps to investigate and deal with this matter," Montano told Henderson in his two page letter.

Montano also sent copies of the letter to Finance Minister Karen Nunez-Tesheria, Attorney General Bridgid Annisette George and acting Commissioner of Police James Philbert.

Yesterday, a voice message left on Henderson's cellphone was not returned.

Several attempts to contact Fraud Squad Senior Supt Glenroy Woodley on his cell proved futile.