The drama continues and we learn of it in weird, spasmodic bursts. The Information Age is here. To err is human.
So many threads to pull from, but here goes –
- The Minster of Finance – Thus far, I have not touched the issues of the Minister’s shareholding, or joined the calls for her to resign. I heard for myself on radio 102.1FM, one morning recently, the aggressive statements made by the Minister of Finance and those prompted me. There are 2 aspects of this in my view –
- The first is that it is safe to assume that the Minister knew that CLF paid dividends after they had written to the Central Bank for urgent financial assistance. Did she take exception to this action by the CLF chiefs? What is her view on that? In any case, did she instruct her negotiating team to attempt to recover those dividends? Was that ever an agenda item in those MoU negotiations? Does the Minister have a view as to that decision by CLF’s Board of Directors? Is that a decision which, in her learned view, would be taken by ‘fit and proper’ people?
- The second one flows from the Minister’s defensive statements made in Parliament to explain the broken fixed deposits and so on. Without going into the details of those statements, the line of defense went like this – I, like many other citizens, knew of the problems being experienced by the CLF group; I was also advised of those by my sister, who is engaged at a senior level in the financial sector; as a result of those factors, I decided, as a matter of prudence, to withdraw the various monies held in the group; CLF did not write the Central Bank ‘til 13th January and that is when my official knowledge began. I accept the Minister’s statement as factual, but that is the very problem. To my mind, the oath of office which is taken by our parliamentarians and cabinet ministers obliges them to put country first. The first action of any responsible Minister of Finance, upon becoming aware of an impending crisis at CLF, was to seek an immediate meeting with the PM and other colleagues to discuss an urgent solution. A key cabinet Minister states openly that she was seeking her own interest first and then effectively waiting for the other shoe to drop. Utter irresponsibility and the lack of consequence writ large.
- The Governor – The Governor of the Central Bank has described the challenges of trying to regulate the CLF group in its several subsidiaries. We have no reason to doubt his account of the perils posed by the CLF business model and the Central Bank’s various attempts to grapple with those. The Governor also issued a private statement to clarify the position around the opposition allegations that he had taken advantage of his special knowledge to withdraw fixed deposits held at CIB. I also accept as true his clarification on that matter. If you accept both accounts, as I do, there is a real issue as to quality of judgment. We are contemplating that the very man who knew, more than any other ‘outsider’, of the deep challenges and high-risk business-model of CLF was also making investments with CIB. I am unable to reconcile that picture, which seems to be correct, with responsible judgment. What is the manner of man to make those investments?
- The Sakal saga – I read in the Sunday Express of 24th May an expose of the Gita Sakal story. It seems from that story that CLF has made allegations against Ms. Sakal that she attempted to obtain certain monies from the sums which were obtained by their sale of a shareholding in CLICO Energy to a German company. That sale was been agreed on February 3rd and was one of the subjects of the ongoing court action between the Central Bank and CLF. Up to that point, according to the Sunday Express story, there appears to be little dispute on the facts. That court action started when the Central Bank obtained an ex parte injunction on Carnival Sunday and the action continues, in closed hearings. The Sunday Express expose quoted Michael Carballo several times in setting out the case against Ms. Sakal. I am proceeding cautiously here since the author of the Sunday Express piece is an esteemed colleague and the entire matter is very delicate, centering on ‘Who is to guard the guards?’ Some points to consider –
- The MoU – was signed on 30th January and clause 20 of it prohibits CLF from disposing of any of its assets without the prior approval of the State. Yet, on Tuesday 3rd February CLF entered an agreement to sell its 51% shareholding in CLICO Energy to its German partners. That story was made public in this paper on 24th March at http://guardian.co.tt/news/general/2009/03/24/duprey-energy-fire-sale-raise-severance-money. What kind of person agrees on Friday to clear terms and by next Tuesday is acting in breach of the prior agreement? That is the one burning question in all this…What is the manner of man we are dealing with? Amidst all the talk of visionaries and plots and schemes for his downfall…
- One Caribbean Media – are the owners of the Express newspaper. According to their 2007 Annual Report, CLF hold a 33.1% shareholding in One Caribbean Media.
- Director – Michael Carballo, the Group Financial Director of CLF, is also a Director of One Caribbean Media – http://www.onecaribbeanmedia.net/index.pl/hdir.
- The burning question – given that my colleague had access to Michael Carballo and some key documents, is why not enquire as to the genesis of the share sale? That seminal issue appears to have been sidelined and we in the media who seek after clarity and integrity, must take special care at this time to preserve our own.
- The MoU – We are also hearing reports that both parties have agreed that the MoU is to be renegotiated. Can this be true? Will the Governor please update us on these matters? I ask again, ‘Who are we negotiating with?’
- Executive Remuneration – The new Chairman of CLICO, Dr. Euric Bobb, was reported to have recently stated that the new management would not be continuing the level of excessive remuneration which had been a pattern in the past (at CLICO). It would be good to know the previous levels of salary and benefits which led to this complete fiasco.
- CLICO – Dr. Bobb also gave recent clear statements as to the strength of CLICO under the new management and that was important. We are getting increasing reports that some of CLICO’s most productive sales agents are joining other insurance companies and, if those are true, CLICO’s future could be very challenging.
Please note that I am not, in any way, defending Ms. Sakal.
SIDEBAR: Integrity and the CL Financial bailout – the nexus
There is an interesting nexus between the Integrity in Public Life Act (2000) and the CLF bailout.
The Act obliges that public officials make a declaration of their income, assets, liabilities and interests to the Integrity Commission on or before 31st May of each year. There are penalties for non-compliance. We have seen high-profile investigations and prosecutions with the proposed amendments to the Act now being debated in the Senate.
The Integrity Commission website lists ten classes of persons in public life who must file declarations with them. That list can be found at http://www.integritycommission.org.tt/whofile.html. The ninth class of person is “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest.”
CL Financial has already signed over its shareholdings in Republic Bank Ltd. (55%) and Methanol Holdings Trinidad Ltd (56%) to the State under the MoU, and the State has taken complete control of CLICO. Will CLICO, MHTL and Republic Bank Directors be filing returns on or before 31 May?