“I think your answer to the commission was it was already done and there was no chance of getting it back,” Glasgow said to Maharaj. “Precisely so,” said Maharaj, who would go on to spend close to five hours giving testimony. “With the benefit of hindsight, even retrospectfully, to let these members’ money sit in investments they had no knowledge of…Was that right?” Glasgow asked.

“I remember attending a board meeting outlining how these companies are to report,” Maharaj said. “Only three I was concerned with. To make them manageable, the plan was there was $250,000 in seed money and they could get additional capital from other sources.

“There was a model for the companies to report to the board and the board would have monthly oversight. That reporting was thrown aside.” He said the HCU had registered in total 29 private companies, among them HCU Home Furnishings Ltd, HCU Autocare Services Ltd and HCU Security Services Ltd.

Maharaj told the commission: “I said until I see reports, there should be no extra funding for these companies.” “Twenty-nine companies,” the white-haired Glasgow stated. “No, I don’t know about them, sir,” Maharaj replied. He added that there were also a charitable foundation and HCU World Travel Ltd. Glasgow asked Maharaj: “And you had been told nothing at all about them at that time?”

Maharaj: “No, sir.” Maharaj said HCU went ahead and registered these companies without informing the commission.

Urgent ministerial report on HCU

Glasgow told Maharaj that only when he had received a letter from the permanent secretary at the Ministry of Labour and Small and Micro Enterprise “urgently requesting a report on HCU, on your own officers thrown out or given five minutes, only when the permanent secretary of the line minister writes to you that something is being done.”

To this, Maharaj replied: “There were regular reports on HCU going to the ministry…” Glasgow: “I put it to you that not until you personally received an urgent request from the permanent secretary that anything started to happen. Do you think at that point, the HCU was a no-go area?”

Maharaj: “There was regular interaction with the HCU by officers of the (Co-operative Development) Division.” Glasgow told Maharaj after receiving a May 23, 2003, letter from the permanent secretary requesting a report on HCU, its board and staff, he sent it to his deputy commissioner. Pause. Maharaj, muttered, “I…somewhere, sir, I remember somewhere these were sent to the permanent secretary…”

Glasgow: “He’s asking you what is going on and you’re simply forwarding it to the deputy commissioner?” The deputy commissioner at the time was Hyder Ali, who passed away in December 2010. Sir Anthony interjected to ask Maharaj, “Why did you delegate? Why?”

Maharaj: “Sir, it is impossible, the workload of the commissioner, especially during that period, was very, very heavy. The deputy commissioner has responsibility for the credit unions. The commissioner could not go into credit unions…” Sir Anthony: “You’re the head of a whole organisation. Everybody is answerable to you, requiring your earliest attention, you might need information from the deputy…”

Maharaj: “Sir, as far as I remember, a report was sent to the permanent secretary…” Glasgow told Maharaj that he knew from HCU’s financials that the society was “undertaking unlawful investments.” He said the Ministry of Finance had issued a press release stating it has overall responsibility for all financial institutions and it was monitoring credit unions, including HCU.

“Surprisingly, that provoked newspaper comment,” Glasgow said. “Two days later, HCU finally gets around to telling you about their subsidiaries, requesting permission to form these companies, a little belatedly. Mr Harnarine—former HCU president Harry—was pretending it was all your fault.”

Maharaj: “Yes, there was a great pressure on me.” Glasgow: “Mr Harnarine said your office was tardy in granting such approvals. Mr Harnarine was trying to blame you and your office and your deputy.” Harnarine was seated in the back of the inquiry, which is being held at Winsure Building, Richmond Street, Port-of-Spain.

HCU member writes Prime Minister

Earlier in his testimony under questioning by Reginald Armour, lawyer for the Commissioner of Co-operatives, Maharaj said he won’t describe the private companies HCU registered as subsidiaries, but as wholly-owned companies. Glasgow read out parts of several letters from angry and worried HCU depositors, addressed to the then prime minister Patrick Manning, the Minister of Finance, the Attorney General, the Director of Public Prosecutions and the Commissioner of Co-operatives, detailing their concerns.

One member said Harnarine walked around with a team of bodyguards, that he and an entourage travelled first-class to Miami, that the HCU wanted to set up offices in Miami, New York and Toronto to generate foreign direct investments for T&T. One such letter, dated March 5, 2002, copied to Manning, the Auditor General and the media, spoke of an “unaccountable” amount of private companies being registered, lack of accountability, the relationship between HCU and Clico.

Glasgow: “Do you remember that letter? Do you remember it, sir?” Maharaj: “I may have seen it. I don’t recall the letter.” Glasgow: “It’s a very serious letter. Surely, you’re not telling the commission a letter like this was not brought to your attention…?”

Sir Anthony butted in at this point to ask: “How many letters in which the primary addressee was the Prime Minister have you received, addressed to the PM and copied to you? Maharaj: “Very few. It should have stuck in my mind, sir.” In putting it to Maharaj that the HCU was a “no-go area” to him and his staff, Glasgow pointed to a letter from Sat Maharaj, a founding member of the HCU, who said:

• He had a benefit in protecting the HCU’s good name.

• The HCU was a credit union in name only.

• Its board was “totally out of control.”

• Its president had no regard for the Co-operative Societies Act.

• Its president decided on all investments without technical or expert advice.

• The president undertook massive, $25 million land deals without requesting valuations, but these properties were not worth more than $10 million.

“Yes, sir,” Maharaj replied. Glasgow: “Employees were frightened of Mr Harnarine.” “Yes, sir, I would think so,” Maharaj said.

HCU staff bused to meetings

One HCU member complained in a letter that the credit union held meetings without members’ knowledge. Glasgow asked Maharaj if he was aware of Harnarine closing HCU offices and busing employees to meetings. Maharaj: “No reason to believe it was untrue.” Earlier, Reginald Armour, representing the Commissioner of Co-operatives, asked him what control would the commissioner have over the HCU’s activities.

“To put back in the investments in these companies, to put back in an investment already made, how practical would that be?” Maharaj asked. Armour asked Maharaj whether he was aware of the Central Bank’s “fit and proper” criteria as part of the Financial Institutions Act in May 2003, when he submitted on request his opinion in support of the HCU’s application to the Central Bank to operate a Bureau de Change.

Maharaj: “No, I was not.” Regarding some of the private companies HCU went ahead and registered, Sir Anthony said to Maharaj some of those companies were “1,000 miles from the conduct of a financial institution,” labelling them “pretty bizarre.” “I’m not making excuses for a runaway horse like HCU. I stopped at seven,” Maharaj said, referring to his approvals of seven HCU subsidiaries.

About the HCU’s relationship with Intercommercial Bank, Maharaj said that never came to his attention. One concerned HCU depositor pointed to HCU wanting to buy Intercommercial Bank, but before the credit union buys a bank, investigations should be made into the spending by HCU officials, their investments and accountability to its members.

“I think your answer to the commission was it was already done and there was no chance of getting it back,” Glasgow said to Maharaj. “Precisely so,” said Maharaj, who would go on to spend close to five hours giving testimony. “With the benefit of hindsight, even retrospectfully, to let these members’ money sit in investments they had no knowledge of…Was that right?” Glasgow asked.

“I remember attending a board meeting outlining how these companies are to report,” Maharaj said. “Only three I was concerned with. To make them manageable, the plan was there was $250,000 in seed money and they could get additional capital from other sources.

“There was a model for the companies to report to the board and the board would have monthly oversight. That reporting was thrown aside.” He said the HCU had registered in total 29 private companies, among them HCU Home Furnishings Ltd, HCU Autocare Services Ltd and HCU Security Services Ltd.

Maharaj told the commission: “I said until I see reports, there should be no extra funding for these companies.” “Twenty-nine companies,” the white-haired Glasgow stated. “No, I don’t know about them, sir,” Maharaj replied. He added that there were also a charitable foundation and HCU World Travel Ltd. Glasgow asked Maharaj: “And you had been told nothing at all about them at that time?”

Maharaj: “No, sir.” Maharaj said HCU went ahead and registered these companies without informing the commission.

Urgent ministerial report on HCU

Glasgow told Maharaj that only when he had received a letter from the permanent secretary at the Ministry of Labour and Small and Micro Enterprise “urgently requesting a report on HCU, on your own officers thrown out or given five minutes, only when the permanent secretary of the line minister writes to you that something is being done.”

To this, Maharaj replied: “There were regular reports on HCU going to the ministry…” Glasgow: “I put it to you that not until you personally received an urgent request from the permanent secretary that anything started to happen. Do you think at that point, the HCU was a no-go area?”

Maharaj: “There was regular interaction with the HCU by officers of the (Co-operative Development) Division.” Glasgow told Maharaj after receiving a May 23, 2003, letter from the permanent secretary requesting a report on HCU, its board and staff, he sent it to his deputy commissioner. Pause. Maharaj, muttered, “I…somewhere, sir, I remember somewhere these were sent to the permanent secretary…”

Glasgow: “He’s asking you what is going on and you’re simply forwarding it to the deputy commissioner?” The deputy commissioner at the time was Hyder Ali, who passed away in December 2010. Sir Anthony interjected to ask Maharaj, “Why did you delegate? Why?”

Maharaj: “Sir, it is impossible, the workload of the commissioner, especially during that period, was very, very heavy. The deputy commissioner has responsibility for the credit unions. The commissioner could not go into credit unions…” Sir Anthony: “You’re the head of a whole organisation. Everybody is answerable to you, requiring your earliest attention, you might need information from the deputy…”

Maharaj: “Sir, as far as I remember, a report was sent to the permanent secretary…” Glasgow told Maharaj that he knew from HCU’s financials that the society was “undertaking unlawful investments.” He said the Ministry of Finance had issued a press release stating it has overall responsibility for all financial institutions and it was monitoring credit unions, including HCU.

“Surprisingly, that provoked newspaper comment,” Glasgow said. “Two days later, HCU finally gets around to telling you about their subsidiaries, requesting permission to form these companies, a little belatedly. Mr Harnarine—former HCU president Harry—was pretending it was all your fault.”

Maharaj: “Yes, there was a great pressure on me.” Glasgow: “Mr Harnarine said your office was tardy in granting such approvals. Mr Harnarine was trying to blame you and your office and your deputy.” Harnarine was seated in the back of the inquiry, which is being held at Winsure Building, Richmond Street, Port-of-Spain.

HCU member writes Prime Minister

Earlier in his testimony under questioning by Reginald Armour, lawyer for the Commissioner of Co-operatives, Maharaj said he won’t describe the private companies HCU registered as subsidiaries, but as wholly-owned companies. Glasgow read out parts of several letters from angry and worried HCU depositors, addressed to the then prime minister Patrick Manning, the Minister of Finance, the Attorney General, the Director of Public Prosecutions and the Commissioner of Co-operatives, detailing their concerns.

One member said Harnarine walked around with a team of bodyguards, that he and an entourage travelled first-class to Miami, that the HCU wanted to set up offices in Miami, New York and Toronto to generate foreign direct investments for T&T. One such letter, dated March 5, 2002, copied to Manning, the Auditor General and the media, spoke of an “unaccountable” amount of private companies being registered, lack of accountability, the relationship between HCU and Clico.

Glasgow: “Do you remember that letter? Do you remember it, sir?” Maharaj: “I may have seen it. I don’t recall the letter.” Glasgow: “It’s a very serious letter. Surely, you’re not telling the commission a letter like this was not brought to your attention…?”

Sir Anthony butted in at this point to ask: “How many letters in which the primary addressee was the Prime Minister have you received, addressed to the PM and copied to you? Maharaj: “Very few. It should have stuck in my mind, sir.” In putting it to Maharaj that the HCU was a “no-go area” to him and his staff, Glasgow pointed to a letter from Sat Maharaj, a founding member of the HCU, who said:

• He had a benefit in protecting the HCU’s good name.

• The HCU was a credit union in name only.

• Its board was “totally out of control.”

• Its president had no regard for the Co-operative Societies Act.

• Its president decided on all investments without technical or expert advice.

• The president undertook massive, $25 million land deals without requesting valuations, but these properties were not worth more than $10 million.

“Yes, sir,” Maharaj replied. Glasgow: “Employees were frightened of Mr Harnarine.” “Yes, sir, I would think so,” Maharaj said.

HCU staff bused to meetings

One HCU member complained in a letter that the credit union held meetings without members’ knowledge. Glasgow asked Maharaj if he was aware of Harnarine closing HCU offices and busing employees to meetings. Maharaj: “No reason to believe it was untrue.” Earlier, Reginald Armour, representing the Commissioner of Co-operatives, asked him what control would the commissioner have over the HCU’s activities.

“To put back in the investments in these companies, to put back in an investment already made, how practical would that be?” Maharaj asked. Armour asked Maharaj whether he was aware of the Central Bank’s “fit and proper” criteria as part of the Financial Institutions Act in May 2003, when he submitted on request his opinion in support of the HCU’s application to the Central Bank to operate a Bureau de Change.

Maharaj: “No, I was not.” Regarding some of the private companies HCU went ahead and registered, Sir Anthony said to Maharaj some of those companies were “1,000 miles from the conduct of a financial institution,” labelling them “pretty bizarre.” “I’m not making excuses for a runaway horse like HCU. I stopped at seven,” Maharaj said, referring to his approvals of seven HCU subsidiaries.

About the HCU’s relationship with Intercommercial Bank, Maharaj said that never came to his attention. One concerned HCU depositor pointed to HCU wanting to buy Intercommercial Bank, but before the credit union buys a bank, investigations should be made into the spending by HCU officials, their investments and accountability to its members.