Government has ordered a full forensic audit to determine exactly how much taxpayers' money was pumped into the bail out of Colonial Life and CL Financial in light of billion-dollar discrepancies, Finance Minister Colm Imbert said yesterday.
Speaking at a post-Cabinet press conference at the Diplomatic Centre, St Ann’s, Imbert said the exact cost of the bailout Colonial Life and CL Financial was still uncertain.
He said so as he noted CL Financial’s majority shareholder Lawrence Duprey’s intention to take legal action against the Government to block Government’s proposed sale of CLF assets, which was reported exclusively in yesterday’s T&T Guardian.
Imbert said he had in his possession a letter, dared March 22, written by Duprey and sent to the governor of the Central Bank.
In the letter, Duprey had asked for consideration to be given for him to have a role in the divestment of the Clico assets.
In response, however, the Central Bank said it was unable to treat with it. Imbert said he also received a letter, dated the following day, regarding suggestions on the way forward for CL Financial, which was being examined.
“However, a lot of these details with respect to the takeover of Colonial Life and the agreement between CL Financial... a lot of these things have been shrouded in secrecy over the last five years and there have been a number of variations to the original agreement and extensions to the share,” Imbert said.
Imbert added there have been some 16 extensions to the shareholders’ agreement between CL Financial and the Government.
He said the latest one was a heads of agreement entered into on May 24, 2013, between the former finance minister Larry Howai and Roger Duprey, who represented the United Shareholders’ Company Ltd with respect to the disposal of all of the assets and a way forward.
“In that document it states that Government had advanced, by way of financial support to the affected subsidiaries, $19.6 billion,” Imbert said.
Saying there was disagreement between CL Financial representatives and the United Shareholders Company Ltd on the figure, Imbert added:
“Based on the discrepancies between what is in this agreement and the information that is in the public’s domain, Government is owed approximately $24.5 billion... and this document speaks to $19.6 billion. There is confusion as to how much of taxpayers’ money was put into this bailout,” Imbert said.
He also sought to clarify what appeared to be confusion in distinguishing the difference between Colonial Life and CL Financial.
He said Colonial Life was taken over by the Central Bank under the emergency powers.
“And it is the Central Bank in pursuant of that responsibility that is disposing of the assets of Colonial Life, which would include policies, shares in Republic Bank and Angostura.
“CL Financial is a holding company that owns shares in Colonial Life, Angostura and Home Construction and companies like CL Marine,” Imbert added.
He said Colonial Life owed the Government $16.9 billion, of which only $4 billion was repaid.
Imbert said within the next three weeks a note would be sent to Cabinet on plans regarding the recovery of monies.
Imbert also said recent meetings with the International Monetary Fund and the World Bank dealt with discussing technical assistance and not imposing any financial restrictions on T&T.
“There was no meeting per say to go drilling down into what’s going on in T&T and to impose conditions. We simply met with experts to advise us on certain matters,” Imbert said.
He said the IMF meeting in particular was to advise on the oil and gas taxation regime and transfer pricing where multinational companies avoided paying taxes.