CL Financial’s (CLF) majority shareholder Lawrence Duprey, as well as a new group called the Clico Stakeholders’ Alliance (CSA), are formulating legal action to block Government’s proposed sale of CLF assets.
This was confirmed by Duprey’s spokesman, Claudius Dacon, on Tuesday, following failed bids by Duprey to meet with Government to discuss Duprey’s plan to recover his former companies and repay the outstanding debt owed to Government from the 2009 bailout following CLF’s collapse.
This week’s development marks the culmination of efforts by Duprey, 82, over the past year to regain his former company.
Action has been brewing in the last few weeks since Duprey wrote Finance Minister Colm Imbert on March 23 offering an outline proposal to settle the Clico/CL Financial debt. The proposal had already been sent on March 22 to Central Bank Governor Dr Alvin St Hilaire.
In February, Hillaire had also received a request from Duprey for a meeting on Clico and CLF matters. Duprey had indicated that Ramesh Lawrence Maharaj, SC, and attorney Ronnie Bissessar had been retained to represent his interests.
In the March 23 letter, Duprey told Imbert: “I have assembled a knowledgeable team of legal and financial advisers and we stand ready to work with you to bring the best possible resolution of this matter in the interest of all stakeholders.”
But since nothing has been heard from Government, Dacon, former CEO of Colonial Life and Clico Bahamas, said Duprey was now in the process of formulating a pre-action protocol letter to send to Government soon.
Dacon said the CSA, an independent group headed by Tobago activist David Walker, comprises about 50 people “who don’t always agree with us but feel assets shouldn’t be sold off in a ‘fire sale’.”
The CSA includes former Clico employees and policyholders. Walker headed a Charlotteville group which successfully challenged the Tobago House of Assembly on a Charlotteville mall issue.
The parties are particularly concerned since Imbert, in his recent mid-year review, said Government was moving to recoup the $20 billion used for CLF’s bailout.
He said the Central Bank had been asked to dispose of the remaining Methanol International Holdings Limited shares owned by Clico, as well as Clico’s traditional portfolio of insurance policies and other associated assets.
Imbert said the Central Bank was also asked to transfer to Government, Clico’s shares in Angostura, Home Construction Limited and CL World Brands. He said once that was completed, Government “will take appropriate decisions to dispose of these assets” and would also acquire lands owned by Angostura and HCL.
The Central Bank, Imbert added, would begin disposing of Clico’s shares in Republic Bank by 2017. These proposals only relate to Clico and in “due course” Imbert said he would report on plans to monetise other assets held directly by CL Financial.
The T&T Guardian contacted Duprey early last week on his views of Government’s plan. He made it clear he was unhappy with that, saying the sale was a bad idea and that he could manage the assets so the companies could earn hard currency to assist T&T in its current economic constraints. He was bitter about measures taken by the last People’s Partnership (PP) government also and indicated action was ahead on the matter.
In a statement on Tuesday, Duprey stated: “I have chosen to speak now because the country needs a powerful, vibrant CLF.
“For seven long years I’ve been vilified in the media. One government minister after the other has lined up to claim the company that my uncle and I built was a Ponzi scheme.
“They and others claimed I am responsible for all the money that was taken from the taxpayer to rescue CL Financial.
“To support their claim it seems they have hidden all accounts from the public. Every administration has gone to great lengths to keep information from us. They are fighting all the way to the Privy Council to block disclosure of how the money was spent.“
He claimed: “They passed legislation making people like Gerald Yetming, Marlon Holder and all their other senior appointees immune from prosecution, apparently so that they can hide their actions.”
Duprey said the CLF rescue could not have cost TT$20 billion.
“This rescue was less complex and less costly than many in the international arena.
“Unlike many of the other rescues, our assets suffered a temporary diminution in value directly as a result of a global economic crisis. The other rescues were largely the result of bad investments in unrecoverable sub prime mortgages.
“CLF wasn’t in that position and just needed time for asset values to recover, as they did,” he added.
Saying CLF, which included forex generators, Methanol Holdings (Trinidad) Ltd (MHTL) and Methanol Holdings (International) Ltd (MHIL), were created for T&T, Duprey accused Government of selling the MHTL and MHIL companies “on the cheap, losing us a constant stream of foreign exchange.”
Duprey said CLF had “broken the effective monopoly of a small cartel of financial service providers in T&T” but the moves of subsequent governments had now eradicated that.
“The other financial services companies are once again free to exploit the market by giving negligible rates of return to savers.
“The Government’s actions allowed them to poach the CLF client base, reducing our value drastically. We created the largest and most valuable insurance infrastructure in the Caribbean.
“That included sales and support staff as well as a valuable portfolio of real estate. This has been destroyed for no good reason,” he said.
Duprey added: “I’m not to blame for this costly fiasco. My management and staff are not to blame. We created a fantastic company that should be helping T&T through this trying time in our history.
“Taxpayers could and should have been repaid within three years. We should now be generating masses of foreign exchange, offering savers sensible returns and leading T&T’s diversification efforts, as we have done successfully.
“Instead, CLF has been reduced to a bit part player that’s being stripped bare even now. CLF has so much to offer, access to accounting and other information will show that clearly.
“That is why each administration has gone to such lengths to hide the information. It is information that will set me free. They cannot stop ongoing disclosures like recent information about kickbacks ...”
He added: “We also need to return CLF to the control of professional businessmen with proud track records, away from politicians and political appointees. I have played my part in building this national treasure. I will now play my part as best possible in restoring the company to its much needed leading role.”
Legal action looms
Lawrence Duprey’s spokesman Claudius Dacon said Ramesh Lawrence Maharaj, who both Duprey and the CSA have engaged for the matter, is also a CSA member and is preparing the legal action against the Government. Dacon said Maharaj wrote to Imbert recently, informing him he was retained by Duprey concerning negotiation of CLF but received no reply.
Dacon said Duprey began talks with the past PP government in 2015 and was ready to negotiate for the return of CL Financial. He had spoken to then acting finance minister Vasant Bharath. Dacon claimed Bharath was positive but said solutions were required to say how Duprey would settle the debt and deal with negative public sentiment.
He said it was proposed that a reputable investment firm be hired to do due diligence on CLF and give a proper accounting of the debt owed. Once established and audited, he said it was proposed a firm of investment bankers would be contacted to use CLF’s assets to raise a loan to repay government.
“The problem is we don’t know how much we owe government and if they sell those assets they will never be able to recover sufficient money to repay the taxpayers and policyholders,” Dacon said.
“Lawrence left in 2009 with the assurance policyholders would get full benefits. That’s why he signed the agreement giving the previous government opportunity to seize CLF assets; he was forcefully evicted. The company always had sufficient funds to deal with its liabilities, it wasn’t insolvent. It was illiquid,” he added.
It is understood another Duprey family branch is also exploring the matter. The T&T Guardian sent emailed queries to Imbert yesterday on whether Government is considering Duprey’s proposal, if it’s feasible and whether there are any talks with Duprey or Maharaj. Imbert replied that he had no comment at that time.
Also contacted, the Central Bank stated “these matters are confidential” and that it could not comment.