Finance Minister Colm Imbert, who returns from overseas next week, will have to deal with a “blowout” given to Government four days ago by the United Shareholders Ltd (USL) about suspected Government “betrayal and deception” in the Clico matter.
In a blistering letter of concern, the USL, which has represented Clico shareholders on matters since 2012, sought answers on its suspicions that Government had “reneged, not only on your undertaking to provide us with a statement of the debt that is owed (to Government for the Clico bailout, but you’ve also reneged on your undertaking not to dispose of the assets of the Group” pending proposed discussions on it.
Making good on its contentions, the USL is now communicating with other Clico entities, headed by CLF Financial majority shareholder Lawrence Duprey, to pursue jointly an injunction to prevent Government action on the matter.
Discussions were held with Ramesh Lawrence Maharaj, SC, on Monday, followed by letters on this.
USL’s letter to Government on Monday is the latest development in the seven-year saga of the failed Clico empire, which collapsed in 2009. The then People’s National Movement government had instituted a bailout plan — the cost of which is now estimated at $22 billion — and Central Bank (CBTT) took control of companies.
The T&T Guardian exclusively obtained the letters involved in the latest developments.
The USL had signed extension agreements with the former government from 2012 onwards for repayment of the money advanced by the government to CLF and its subsidiaries, and the USL has been representing shareholders’ interests in CLF.
In the 2016 Budget, Imbert said he intended to bring the Clico matter to an amicable conclusion in the interest of all concerned and T&T and had outlined certain moves. In the April mid-year review, he gave further details on certain CLF assets and on July 7 further outlined resolution of the Clico issue.
However, Clico stakeholders in recent months have lobbied to regain control of the company, saying the circumstances which caused the Central Bank to take control no longer apply as Clico is “solvent.” Imbert, however, says it remains insolvent.
In April, CLF’s Lawrence Duprey submitted a plan to Central Bank and Imbert to regain control of the company. Last week Duprey said there had been no response to that proposal.
In May, Imbert told the T&T Guardian he had not spoken to Duprey but Government was dealing with the USL group. He said those talks were cordial.
But prior to his confirmation of USL talks, on April 25, 2016, the USL had sent Imbert an 11-page letter which noted a call by Imbert to USL chairman, Kirk Carpenter, on April 20 and Imbert’s request to “identify what the CLF shareholders want and expect and what has been previously discussed with the Government.”
The April letter stated USL agreed Government needed to have a firm plan for “full and final settlement of the long-outstanding matter” and USL had prepared proposals to deal with shareholders’ views and ensure Government was repaid.
But USL also said shareholders were “taken aback” at Imbert’s plan for CLF in the recent mid-year budget review, since the plan did not “reflect the substance and tenor of previous discussions between Government and CLF shareholders or the concrete proposals contained in the Heads of Agreement.”
Saying the group wished to settle the residual debt soonest, the April letter detailed proposals envisaging CLF would remain with varying percentages but retain control of six companies, including Angostura Holdings Limited, Colfire Ltd and Home Construction Ltd.
However, after Imbert’s July 7 statement and a T&T Business Guardian story last week on a leak of Central Bank instructions to Clico to begin making certain policyholder settlements, the USL group sent Imbert a stiff letter on Monday (July 25) regarding Government’s action and the recent proposed transfers of shares of Angostura CL World Brands and the proposed sale of Clico’s traditional book of business.
It was signed by USL chairman Carpenter, Roger Duprey (CL Duprey Investment Trust Ltd) and Carlton Reis (Daleo Capitol Management Co. Ltd.)
Govt accused of betrayal
Noting in part that an impasse had developed over the issue of the Clico assets in relation to its debt, the letter said the USL had asked Government to provide a definitive statement on what the debt was, along with evidence to support that statement.
It noted, however, that it was yet to get any statement on the quantum of the debt but “we have, however, read with great concern, reports in the press that suggest that you have reneged, not only on your undertaking to provide us with a statement of the debt that is owed, the obvious pre-requisite of meaningful discussions on the quantum of the debt, but that you have also reneged on your undertaking not to dispose of the assets of the group during the pendency of our proposed discussions.
“... Most disturbing, however, is that it appears that your undertakings were given for the sole purpose of procuring our co-operation while you proceeded on your stated course of disposing of the group's assets behind our backs and without consultation with us.
“This would, if true, be an unspeakable act of betrayal and deception. We hope that there is no truth in this and that this is all a huge misunderstanding.”
The USL told Imbert that it would take action to protect its position if no assurances were forthcoming.
The group asked Imbert for a response by 4 pm on Monday gone. Yesterday, officials said they were awaiting word on this week’s expected meeting. But Government sources said the meeting could not be held as Imbert was overseas. (See Page A19)
Imbert is in the US this week pursuing a billion-dollar bond but contacted via email on the USL’s July 25 letter, Imbert said: “I’ll deal with this when I return.”
Other Government officials assured there was “absolutely no deceit or secret moves” going on. They explained that for any relinquishing control of the companies to be done, the first steps were the ones that had been instructed and the companies had to be transferred to Government.
Allegation unfounded
“Nobody is selling Clico assets off secretly,” they insisted.
They said USL’s suspicions were unfounded and hasty and the tone of the July 25 letter was harsh and did not contribute to resolution, which they stressed would still be done properly with all.
In the 2016 Budget, Imbert said 2016 taxation measures would be supplemented by a sale of assets programme and the receipt of extra-ordinary dividends projected to yield a further $13.4 billion. He said those included partial repayment by Clico relating to Government’s financial support and other methods.
In the April mid-year review, Imbert had said Government was moving to get back the $20 billion bailout of Clico, He said he had asked Central Bank to dispose, “strictly in accordance with the shareholders’ agreement,” of remaining Methanol International Holdings Limited shares owned by Clico at the valuation price, and Clico’s traditional portfolio of insurance policies and other associated assets, valued at approximately $1 billion.
The Central Bank was requested to transfer to Government, Clico’s shares in Angostura, HCL and CL World Brands valued at $3 billion.
Imbert said once this transfer occurred, Government would take appropriate decisions “to dispose of these assets in a sensible and productive manner.”
He said Government would acquire lands owned by Angostura and HCL for public purposes, such as housing, tourism and infrastructure. Central Bank would also begin disposing of Clico’s shares in Republic Bank by 2017.