Home' Trinidad and Tobago Guardian : July 10th 2014 Contents JULY 2014 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
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On Tuesday night,
Finance Minister Larry
Howai delivered a
short address at a
cocktail function host-
ed by RBC Royal Bank
at the Hyatt Regency
In between his speech and returning to the
Senate, which was in session at the time, the
minister addressed a few topical questions
from journalists, touching on the CL Financial
issue, the SEC s probe of the First Citizens
IPO, the upcoming Phoenix Park IPO and
whether he is bringing a buy-election budget
Q: What about the Clico/CL Financial
A: That is improving day by day. The big
issue for me is what decision the arbitrators
Referring to the seventh extension of the
new shareholders agreement between the CL
Financial shareholders and the Government
to December 31, 2014 or three months after
the delivery of the Methanol Holdings
(Trinidad) Ltd arbitration decision on the sale
price of the Point Lisas-based petrochemical
facility, Howai said: "We more or less had
everything nailed down, but the shareholders
thought that they really wanted to hear what
the arbitrators had to say first before they
signed on the dotted line, which I could under-
"The CL Financial shareholders want to
know that if there is anything due to them,
they get what is due to them. I suppose some
people may differ, but I can understand their
"The thing is there has been some appre-
ciation in values (of CL Financial assets) so
that the situation keeps getting better and
better. I look forward to this being a successful
exercise and us coming out of this---everyone
as far as possible and certainly the Government
coming out of this---fully intact and made
whole in terms of what we put in.
"But, of course, it all depends on what hap-
pens when assets are actually sold. It may be
premature, so I want to be careful about what
I say about that.
"The last discussion that I had with Ernst
& Young on the values of the assets and the
liabilities of the group, I was pretty comfortable
that we are in a good place right now."
Q: Given the appreciation in asset val-
ues, is it envisaged that the Government
will need to have an ongoing relationship
with CL Financial?
A: Because the process of disposal of assets
would take some time, we would probably
want to be around during that disposal process
because there are public policy issues in the
disposal process, as well as economic and
financial issues. For example, if you decide to
sell Angostura shares, how that is done...
We are hopeful that the arbitrator will give
us a response this month and if they do, the
three months start to run and we will sit back
down with them and finalise things in terms
of where we are and look to then start the
process of how do we structure the governance
process to ensure that we get the feedback
that we need to get from the public, in terms
of the public policy issues, and how do we
ensure that we give proper thought and atten-
tion to ensuring that these public policy issues
are properly managed going forward.
Q: What s the value of CL Financial
minus the methanol companies?
A: I could not give you that number off the
top of my head. But the number looks like it
would be a total reversal of where we were a
year ago. It looks good but it depends on what
we realise when we actually start the process
of divestment of assets.
Q: How do you account for the timing
of the proclamation of the 2006 Bank-
ruptcy and Insolvency Act on May 26,
A: I was really trying to beat the World Bank
Ease of Doing Business evaluation. We were
ranked at about 140 in the bankruptcy category.
Recently, I was on a roadshow with some
bankers for some things we want to do with
the IFC, in terms of developing the financial
services sector and the first thing they raised
The lack of bankruptcy legislation has been
an issue, so that by putting this in place, we
can make a significant improvement in our
ratings as far as that specific category is con-
cerned in terms of the Ease of Doing Business.
I thought it would make an important difference
in that metric alone, apart from the fact that
businesspeople in evaluating T&T as a place
to invest look to see how do you deal with
things like insolvencies and bankruptcies.
Q: What about the Phoenix Park IPO?
A: It went to Cabinet and there were a few
areas that Cabinet wanted to change to deal
with some of the issues that had come up. I
thought we had dealt with it, but some issues
came up on whether we should cap the acqui-
sition of shares in Phoenix Park. But a count-
er-point was raised on the possibility that we
could impose a cap and then not sell all of the
shares. You would then end up with an issue
that is not fully subscribed.
Some people feel that is probably very unlike-
ly and probably we could set the cap in such
a way that...but you see it assumes that every-
body buys and if everybody does not buy, you
could run into some problems.
We are trying to figure out how we deal with
these issues so that we do not have a repetition
of what occurred with the First Citizens IPO.
It s amazing that we used the same model with
the First Citizens IPO that we used with
National Enterprises Ltd IPO more than a
decade ago and NEL went perfectly as there
weren t any issues. But I suppose that people
were less "creative" in those days than they
Q: What about the Securities and
Exchange Commission s (SEC) investiga-
tion of the First Citizens IPO?
A: The SEC told me that they continue to
work on it. We are probably a couple of months
away from getting the SEC report. When I
speak to the Canadian forensic auditors they
say that this is the length of time that these
investigations normally take. It is a great deal
of data that needs to be pulled together and
things do not always go smoothly, as with
everything else. Sometimes you figure there
is information there and when you start to dig
into it, you realise that the information is not
there and you have to do other things. That
takes some time.
And then all of the documentation has to
be cross-referenced to make sure that what is
said in one part of the report is supported by
what is said in another part of the report. Or
if it is different, why is it different and if it is
different, you would need to do some more
It could be very time-consuming in terms
of putting together a case.
Q: There is some trepidation that you
are coming with an election budget in
A: For the first half of the year, we expe-
rienced a fiscal surplus although we had some
late payments, which is a reasonably good out-
turn. But we are coming into the second half
of the year, which is when the challenge occurs.
We are hopeful that this year the fiscal results
will be better than last year, which would con-
tinue the trend of improvement.
I have not given any thought to any of the
details as yet. I have to admit that I do get
many suggestions from everyone and I listen
to all suggestions and pass them on to the very
competent staff that we have at the Ministry
of Finance to cost things and let us know what
are the cost implications.
We will put together a package at the end,
which hopefully my side as well as the other
side will support. (Laughing) It would not be
good to go into Parliament and your side votes
Minister Howai speaks out
Finance Minister, Larry Howai, left, chats with Arthur Lok Jack, chairman and CEO of Associated Brands group of companies, and Wendell
Mottley, chairman of the Unit Trust Corporation at RBC Client Cocktail event at the Hyatt Regency, Port-of-Spain on Tuesday.
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