Home' Trinidad and Tobago Guardian : July 2nd 2015 Contents JULY 2 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
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It s my view that those who describe
the statements at the weekend by
Lawrence Duprey, the former executive
chairman of Clico, as an "audacious
demand" a "joke" and a "distraction," are
being uncharitable and unkind to someone
whose contribution to the development of
the country is, perhaps, unparalleled.
Mr Duprey was quoted in the last Sunday
Express as issuing a threat that the Gov-
ernment either return control of Clico, the
collapsed insurance giant, to him, or he
would embark on civil action to force its
Unfortunately, the reporter did not get
Mr Duprey to comment on how soon he
wanted to get back in control of Clico. That
point needs to be made because what is
clear is that at the end of the process of
repaying all of Clico s creditors in full, the
company goes back to its original share-
holder, CL Financial.
If, therefore, Mr Duprey was referring to
the CL Financial shareholders getting back
100 per cent of Clico AFTER its creditors
have been paid in full, that is entirely in
line with the constitutional right to the pro-
tection of property and a citizen s right to
enjoy their property.
It is not an "audacious demand" for a
significant shareholder of CL Financial,
which owns 51 per cent of Clico, to signal
that the insurance company should be
returned to its owners, AFTER the creditors
have been repaid in full.
If what Mr Duprey was signalling, how-
ever, was that he is interested in getting
Clico back BEFORE its creditors have been
repaid in full, I would simply invite him to
return to Port-of-Spain to argue his case
both before the court of public opinion and
before the High Court. I am sure there are
very comfortable rooms in that place on
upper Frederick St that former FIFA honcho
and UNC chairman, Jack Warner, had occa-
sion to overnight in recently. If Mr Duprey
has a problem finding the place, he might
wish to ask directions of a serious and
upright gentleman by the name of Roger
Gaspard, who I am sure would be delighted
to assist him.
But seriously---and I hope Mr Duprey has
not lost his Trini sense of humour in the
six years and five months since he last visited
home---only last month the Governor of the
Central Bank, Jwala Rambarran, had cause
to remind the population of the following:
"After Central Bank assumed control of
Clico in 2009 pursuant to Section 44D of
the Central Bank Act, it initiated a forensic
investigation into the affairs of Clico.
This investigation was conducted by emi-
nent forensic accountant Mr. Robert
Lindquist. Based on the findings of the
forensic investigation and the advice of
Queen s Counsel received in October 2010,
Central Bank and Clico commenced a
Breach of Fiduciary Duty civil case in June
2011 against Mr Lawrence Duprey, Mr Andre
Monteil and their companies as defendants,
as they were considered to be the principal
decision makers for the affairs of Clico.
"In March 2013, Ms Gita Sakal was added
as a defendant to the case.
"This is an ongoing matter and based on
the advice of Queen s Counsel, defendants
in this civil claim, where they or their com-
panies are policyholders/creditors of
Clico,will not be paid under the terms of
the 2015 Clico Resolution Plan, until the
determination of the matter by the Court."
In other words, there is no doubt that
Mr Duprey has some serious questions to
answer about his stewardship of Clico and
CL Financial before the issue of issue of
him flying in on his magic carpet of choice
to take back Clico can even be considered.
This is not to discount the principle that
the CL Financial shareholders are entitled
to the company when its creditors have
been repaid in full.
This does not discount the contribution
that Lawrence Duprey made as the only
local businessman who ventured into own-
ership of one of our downstream petro-
chemical companies. It also does not dis-
count his stewardship of the CL Financial
group, for the 13 years that followed its
establishment in 1993.
I maintain that the reason Mr Duprey
was forced to go cap in hand to the Central
Bank in January 2009 was because he paid
too much and borrowed too much for Las-
celles de Mercado, which he ended up pay-
ing US$676 million, when he completed the
purchase of the Jamaican spirits giant on
July 28, 2008, according to CL Financial s
2007 annual report.
The report states: "The group has raised
external debt financing in the amount of
US$450 million to finance this equity invest-
ment at rates varying between 9.5 per cent
and 10.5 per cent per annum."
In disclosing that Lascelles total assets
amounted to US$475.9 million and share-
holders equity stood at US$356 million,
as at 30 June 2008, the CL Financial annual
report made the following ashtonishing
statement: "The group is currently in the
process of seeking to ascertain the acqui-
sition date fair value of the identifiable net
assets of the company."
You are trying to find out the value of
the net assets of the company you mort-
gaged your group to acquire AFTER you
paid for the asset three years before you
And this brings me to the most important
point of this article, which is that my per-
ception of Lawrence Duprey is of a man of
vision, someone who saw how he could
connect the Lascelles acquisition with pre-
vious purchases such as Angostura and with
Burn Stewart to create a global spirits giant
that would challenge Diageo, Pernod Ricard
and Barcardi....in the same way that he
envisaged a global methanol company.
He never struck me as being a nuts and
bolts manager in the way some of the local
conglomerate managers. He never struck
me as the kind of person who would get up
early and read all of his board papers from
start to finish with a red pen in hand,
demanding more data and more facts.
Or would spend weeks negotiating a
lower price for an acquisition....and be ready
to walk away if he did not get the price he
I can almost hear the owners of Lascelles
pitching a price way beyond what the com-
pany was worth, thinking that no one would
ever pay so much for the asset...and
Lawrence telling them I ll take it," and then
calling Andre Monteil and saying: "I just
bought Lascelles for US$680 million.
Arrange the financing for it, nuh."
But is this the kind of man who we want-
ed handling the details of 15,000 payments.
And is this even something that he wants
at his age of 81?
Mr Duprey is an excellent dealmaker but
a poor negotiator, I think.
That is why he was not able to negotiate
better terms for the Memorandum of Under-
standing in January 2009. He was not will-
ing---as the Greek prime minister Alexis
Tsipras has done and is doing---to negotiate
up to the brink and the deadline and then
tell the creditors Let the owners decide.
On a related issue, with the benefit of
hindsight, it seems to me that Mr Duprey,
and his advisers including Ram Ramesh,
the former CEO of CMMB, were incorrect
in their assessment that what CL Finan-
cial/Clico was suffering from was a liquidity
situation and not a solvency problem.
In the January 13, 2009 letter to then
Central Bank Governor Ewart Williams,
Duprey argued that the group needed urgent
He said: "We are in the process of
realigning the asset-liability structure of
the group to better meet the current liquidity
situation. This is a complex action plan that
we are embarking on immediately, including
initiatives such as merger of certain entities
within the group with strategic partners
and/or sale of certain assets in order to raise
"As you would appreciate, these initiatives
would need some time before they yield the
desired results. In the event that the financial
crisis deepened in the local market, we may
need urgent liquidity support to be made
available to the group.
"In this regard, we would like to discuss
the approach of the Central Bank toward
supporting the financial sector and, by
extension, the CL Financial Group, if con-
ditions were to deteriorate."
I am subject to correction but my under-
standing is that companies are considered
to be insolvent if they are unable to pay
their debts as they fall due in the usual
course of business or their liabilities exceed
the reasonable market value of their assets.
My understanding is that companies have
liquidity issues if they do not have the cash
to pay their short-term obligations.
Clico s 2009 audited financial statement
indicates that for the year ended December
31, 2008, the insurance company had assets
of $18.5 billion and liabilities of $23 billion.
This means that two weeks before Mr
Duprey wrote to the then Central Bank Gov-
ernor, Clico had negative net worth of $4.5
billion, which more than doubled a year
Should Duprey get back Clico?
Ewart Williams,left, then Governor of the Central Bank, has a quiet word with CL Financial
executives Andre Monteil and Lawrence Duprey just before the signing of the Memorandum of
Understanding on January 30, 2009. PHOTO: BRIAN NGFATT
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