Dookeran: Auditor General report shows breach in Act
Anna Ramdass anna.ramdass@trinidadexpress.com
Friday, June 25th 2010
The Auditor General has been asked to review the accounts of the Unit Trust Corporation (UTC) which indicate the corporation may have violated its own rules with respect to investments it made, Finance Minister Winston Dookeran has said.
But the Unit Trust responded yesterday that the investment was restructured and the issue already corrected, so the corporation would not violate a ten-per-cent investment rule.
Dookeran, speaking at the post-Cabinet meeting at the Prime Minister’s Office, St Clair, said he received the report into the UTC which was fair and met international financial and reporting standards as at December 31, 2009.
However, he said the Auditor General drew attention to Section 13:3 of the Act which states, ’Investing in securities, the board shall not invest more than ten per cent of its fund in any one scheme, in the purchase of securities in any one company or the other corporations nor shall the investments in all unit schemes established by the board include at any time more than ten per cent of the securities issued by any company or other corporations.’
Dookeran said it was pointed out as at December 31, 2009, one Unit Trust investment exceeded ten per cent of the securities issued by a particular entity.
He said notes in the report indicate ’there is an issue as to whether the bond issue was of a sovereign nature or not, but notwithstanding the resolution of that issue, there was still variation from the policy of the board to invest in one entity more than ten per cent of its securities’.
In a statement, the Unit Trust said it had in its portfolio a bond that was considered sovereign debt, and its participation was in excess of ten per cent of the securities issued.
But the Auditor General said this was not considered to be in contravention of Section 13 (3) of the UTC Act.
The bond was restructured in 2009, and it is expected the restructured facility will allow for a selling down of the UTC’s participation to below ten per cent, the corporation said.
’It should be noted that the investment in question represents 0.35 of one per cent of the total assets of one scheme and 0.17 of one per cent of another scheme. This has had no adverse effect on the UTC’s fund performance, and management is seeking to regularise the matter,’ the UTC said.
From Trinidad express Newspaper.com published on June 25, 2010
