From: Afra Raymond <email@example.com>
Date: Sun, Oct 18, 2009 at 4:19 PM
Subject: ICATT and the CL Financial bailout
To: Anthony Pierre, President
Dear Mr. President,
I am writing to you, as President of the Institute of Chartered Accountants of Trinidad & Tobago, to urge your involvement in the calls for greater transparency and accountability in the bailout process involving the CL Financial group.
Anthony, on the many occasions on which we have interfaced, I developed considerable respect for your integrity and sense of purpose. Most recently, I took note of your critical intervention on the proposed new regulatory regime for the credit union movement.
I am of the view that we citizens and civil society organisations, such as ICATT, need to be active in promoting higher standards of professional and public conduct. I know that those are values within which we can find common ground, because in so many respects we can do better. Yes, we can.
As you know, I have been publishing a critical review of the CL Financial bailout in the pages of the Business Guardian and that now forms the core of my blog at www.afraraymond.com. The collapse of the CL Financial group is certainly the largest financial crisis to beset our nation and the first MoU of 30th January 2009 was widely welcomed as offering relief to depositors and policyholders. I expressed doubts on the grounds that we seemed to be ignoring moral hazard.
The second MoU, signed on 12th June 2009, has now apparently been deemed ‘confidential’. That designation is inimical to vital concepts such as transparency and good governance, both of which form important themes of ICATT’s work generally and in this Accountants’ Week in particular.
I appreciate that your time is very limited, so there are only two articles to which I would invite your attention, both available on my website – ‘Finding the Assets‘ (published on 23rd August) and ‘Open letter to the Minister of Finance‘ (published on 5th October and also in that issue of the Trinidad & Tobago Review). For ease of reference, I have attached copies of these articles.
My specific questions to the Minister of Finance, on which I am here lobbying for ICATT’s support and involvement are:
- CL Financial 2008 Audited Accounts – When are these to be published? What is the reason for the delay in doing so?
- The second MoU with CL Financial – The first MoU was published on the Ministry of Finance website on 9th April, 9 weeks after it was signed. Using even that slow timetable, the new MoU is overdue for publication. Some 18 weeks have now elapsed. What is the reason for its omission from the Ministry’s website? The second MoU creates new and onerous commitments for the country and its publication must no longer be delayed. I emailed the Minister of Finance on 19th September to request clarification on this, but there has been no reply.
- Forensic Audits – We have seen various official reports of forensic audits being carried out at CL Financial and some of its subsidiaries. Have these been completed?
- The interest rate – What is the interest rate being charged to CL Financial for this open-ended financial assistance?
- Status Reports – We have had no interim reports as to the disbursement of State funds or the disposal of CL Financial Assets. When does the Ministry of Finance intend to start providing regular reports on the progress of the bailout to the public?
- The equity position – How is the equity position of the shareholders being adjusted in this deal? Has their shareholding been diluted to reflect the position? Has the State now taken an equity position in the group? If not, what is the upside for the State in all this?
For the avoidance of doubt, given the recent confusion amongst our learned friends, please note that this is being published to my website.