Home' Trinidad and Tobago Guardian : April 27th 2017 Contents APRIL 27 • 2017 guardian.co.tt BUSINESS GUARDIAN
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BG VIEW ANTHONY WILSON
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What of Mr Duprey's rights?
On Sunday, I wrote an email to disclosure
activist, commentator and property valu-
ator Afra Raymond taking issue with some
comments he made in Sunday Guardian
and on CNC3 News on Saturday night that
it would be "unacceptable" if CL Financial
is returned to Lawrence Duprey.
Mr Raymond was quoted in the Sunday Guardian as follows:
"I don't think it should be returned to them. Those people
are not fit and proper to have ownership, directorship or hold
positions as officers or controlling shareholders of a financial
institution in this country. There are fit and proper guidelines
and that is one of the very issues we raised with the Governor
of the Central Bank Dr Alvin Hilaire."
The fit and proper guidelines, to which he referred, pertain
to financial institutions only.
Section 33 (2) of the Financial Institutions Act (FIA) states:
"A person who is not a fit and proper person in accordance
with the criteria specified in the Second Schedule shall not act
or continue to act as a director or officer of, or be concerned
in any way in the management of a licensed institution or fi-
nancial holding company."
Section 71 (7) of the act also allows the Central Bank to apply
the fit and proper test to controlling shareholders of licensees.
My reading of the act, especially the Second Schedule, is
that it may prevent Mr Duprey from being director, controlling
shareholder, significant shareholder or officer at Clico, Clico
Investment Bank (CIB), Republic or any financial institution
If the Central Bank were to take the view that Mr Duprey's
leadership of CL Financial and Clico was partly responsible for
the collapse of insurance company and CIB , then the Central
Bank may determine that Mr Duprey would not pass the fit
and proper test.
The Central Bank may still be of the view---expressed by its
former Governor Ewart Williams at the news conference on
January 30, 2009---that the financial difficulties at Clico and
CIB have more to do with "excessive related-party lending...
an aggressive high interest rate mobilisation strategy to finance
equally high-risk investments...and very high leveraging of
the group's assets."
It is on that basis---plus the forensic audit of Clico in 2009
and 2010 and the civil proceedings filed by the Central Bank
and Clico on June 7, 2011 against Lawrence Duprey and oth-
ers---that the bank may conclude that Mr Duprey does not
meet the fit and proper criteria outlined in the FIA.
The common sense position that flows from the above is
that Mr Duprey cannot serve as a director, controlling share-
holder, significant shareholder or officer at CL Financial if it
continues to hold 51 per cent of Clico and lesser percentages
of Republic Bank and CIB.
But the FIA does not pertain to non-financial companies
such as Angostura, Home Construction, CL Marina etc.
If CL Financial is separated from its financial institutions,
there can be no legal reason to deprive the shareholders of
the group of their property rights in non-financial companies
such as Angostura, Home Construction, CL Marina etc. That
is because the Constitution of the Republic of T&T, at Section
4, affords CL Financial shareholders the fundamental right to
"the enjoyment of property and the right not to be deprived
thereof except by the due process of law."
If the Central Bank/GORTT do not return CL Financial's
non-financial companies (or assets) to the group's sharehold-
ers after GORTT and other creditors have been repaid, that
would be a clear breach of the constitutional rights of those
To deprive the CL Financial shareholders of their property
rights in the group would tie the CL Financial resolution up
in legal proceedings for decades and would deprive taxpayers
of the benefit of the repayment of the monies advanced to the
group at a time when T&T's credit rating is being downgraded.
In other words, the Central Bank may prevent Mr Duprey
from having anything to do with Clico if it remains as an in-
surance company, but cannot interfere with his property rights
if Clico becomes a holding company for non-financial assets.
If Clico's traditional portfolio is separated from its non-fi-
nancial assets, can that be the basis of a negotiated commer-
cial resolution to the eight-year-old Clico nightmare? Such
a scenario prevents the issue ending up in litigation, which
would benefit neither the shareholders of CL Financial nor
the taxpayers of T&T.
CL Financial's proposal
Assuming the government is still owed $10 billion by Clico,
it is my understanding that the CL Financial shareholders are
offering to make a small payment to the government (for ex-
ample $4 billion) which would allow them to regain control
of the insurance company's assets.
The shareholders would then run the company for a period
of time (say ten years) and would repay the government an
agreed sum every year until the $6 billion balance owed is
My understanding of the government's proposal is that it
wants to be in a position to sell Clico's assets until the insurance
company's debt to taxpayers is fully repaid and then return
what is left of the company to shareholders of CL Financial.
That proposal was first outlined by the Central Bank in March
2015 and was endorsed as the current administration's policy by
Minister of Finance Colm Imbert in his July 7, 2016 statement
on the Clico resolution in the Senate.
The March 2015 proposal was for the Government to be paid
$4 billion in cash and for Clico to transfer its shares in Angostura
Holdings Ltd, CL World Brands and Home Construction Ltd
to the Government for $3 billion in value.
The sum of $7 billion would have satisfied 85 per cent of
Clico's debt to taxpayers, meaning the total liability was $8.3
billion) of which the Government received $4.2 billion in cash.
In his April 8, 2016 mid-year budget review, Mr Imbert
said: "After this transfer, we will take appropriate decisions
to dispose of these assets in a sensible and productive man-
ner. With particular reference to lands owned by Angostura
and/or Home Construction, it is the Government's intention
to acquire these assets for public purposes such as housing,
tourism and infrastructure development."
Differences between Clico and GORTT
It is clear Mr Duprey and other active CL Financial share-
holders are prepared to go to court to block the transfer and/or
sale of Angostura, CL World Brands and Home Construction.
That, in my view, is the reason the negotiations between
the Government and Clico have broken down.
The bone of contention between the Government and Clico
is that the Government insists that Clico's shares in Angostu-
ra Holdings Ltd, CL World Brands and Home Construction
Ltd should be transferred to it and "disposed of in a sensible
and productive manner," while the CL Financial shareholders
maintain they should be allowed to take control of group assets
as part of the resolution.
Bridging the gap
In a July 30, 2016 exclusive, Gail Alexander reported on an
April 25, 2016 letter written by Roger Duprey---who is part of a
group of CL Financial shareholders called United Shareholders
Ltd that was set up to negotiate a settlement of this matter---to
the Minister of Finance in which R Duprey outlined a plan for
CL Financial shareholders to retain control of following six
The companies are Angostura Holdings Ltd; CL World Brands
Ltd; Home Construction Ltd; CL Marine Ltd; Colfire Ltd and
Caribbean Petrochemical Marketing Ltd.
It seems to me if the future of those six CL Financial assets is
contentious, the Government and the CL Financial shareholders
should at least agree on the assets that can be sold allowing
for taxpayers to be repaid some of the Clico debt immediately:
• The Oman-based Methanol Holdings (International) Ltd;
• CL Financial’s 80 million shares in Republic Bank, repre -
senting just over 50 per cent of the bank, should be sold and
the proceeds in excess of $8 billion shared among the Gov-
ernment, the unitholders of the Clico Investment Fund and
the creditors of Clico Investment Bank;
• Clico’s traditional portfolio;
• If Clico is holding government bonds or treasury bills
above the funding requirements of Clico's traditional portfolio,
that government paper can be extracted and retired...or sold.
• The Government can identify parcels of the group’s prop-
erty holdings that it wants---including the property in Tobago
that Prime Minister Keith Rowley insists should not be called
No Man's Land---and the valuation of that land be used to re-
duce the group's debt to the government;
• CL Financial shareholders should be allowed to take con-
trol of some or all of the companies they requested with all
of them having government-appointed directors and with
strict, legally enforceable deadlines for the payment of the
outstanding balances to the State.
See Mary King's letter on Page 10
Disclosure: The author is a shareholder in
Angostura Holdings Ltd
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