CL Financial – The bailout timeline

This is to be published on the last day of 2009 and it is intended to do two things – firstly, to provide an overview of the CL Financial bailout and secondly, to start a critical conversation on our work as writers and analysts.

The timeline of the events over the last year or so on the CL financial bailout is set out for ease of reference. The detailed material can be found in the earlier part of this series at In doing some other reading, I came across a valuable part of the story and that is the first item in the timeline.

TIMELINE – November 2008 to December 2009

  • Michael Carballo. Photo courtesy Trinidad Guardian
    Michael Carballo
    6th November 2008 – The Guardian publishes ‘Surviving the Storm’, an extensive review by Sandra Chouthi on the prospects for our local businesses on surviving whatever the global situation throws at them – see The first person interviewed for that article was Michael Carballo, Group Finance Director of the CL Financial group. Some of his quotes are remarkable, given the imminent collapse –
    • “Luckily, the group has not been impacted in any way via securities in any banks we have had to write down.”
    • Carballo said CL Financial, with $100 billion in assets, could weather any storm.
    • “We are not exposed in any one particular industry. That is our business model,” Carballo said.
  • 18th November 2008 – Publication of CL Financial’s 2007 Annual Report ‘The Next Wave of Growth’, which includes audited accounts showing profits after tax of $1.74Bn, with ‘cash and cash at bank’ of $9.486Bn.


The ‘Express element’

It is common to criticise governments on the basis that they are out of touch and seem to operate in silos. Meaning that various departments of our governments often operate without taking account of each others’ plans and actions. That is indeed so, but we also have to be willing to change if we are to have a chance of changing our world.

In saying so, we in the media have been existing in a similar place where cross-linking and critical discourse is almost extinct. If we are not able or willing to start a critical, public conversation amongst ourselves, there would also be severe limits on our own growth and effectiveness. The times are very challenging and they pose a caution for us all in the media. Our country needs a quality media of integrity.

Of course, I am speaking of the work of Camini Marajh, the respected investigative reporter from the Express. This year we have been treated to 3 high-profile exposes on CL Financial by Ms. Marajh – on Gita Sakal, Patrick Patel and most recently, the Home Mortgage Bank/Angostura deal (those 3 articles are at,,, with heavy focus on the role of the CL Financial group’s former Finance Director, Andre Monteil.

It is clear from that series of articles that Ms. Marajh has access to private documents and Michael Carballo. Is it that readers will have to remain in suspense as to the key mysteries of the CL Financial fiasco? In my view, those would have to be –

Of course, one could maintain that the focus on the other aspects of the story are of greater importance and public interest. I am just wondering, in public, whether those questions have ever been put to Carballo and if so, what did he reply. It would be a real piece of investigative tonic if Ms. Marajh were to use her access to ask these burning questions.

It also needs to be said that Ms. Marajh’s last set on the Angostura purchase of the Lascelles Mercado group in Jamaica opened two aspects for further investigation.

I do not have the kind of space the Express affords my colleague, so this will be brief.
The first of these was the fact that Home Mortgage Bank seems to have guaranteed a transaction in which Angostura took over Jamaican rum manufacturer, Lascelles Mercado at a cost exceeding $600M USD. It seems that the HMB guarantee was set out in a December 2007 document. That sum was also said to be in excess of the financing headroom available to HMB, but that is not something I am going to pursue here. My concern is that the Home Mortgage Bank was established by an Act of Parliament to provide liquidity to the secondary mortgage market. How come a mortgage company, established to provide finance for the benefit of homeowners, could issue a guarantee to a conglomerate to buy a liquor company? How come? To my mind, that seems to be well outside the intended scope of the HMB as per its own company information – There is also the interesting point that this huge deal, with all its possible implications for the stability of the HMB, was not disclosed in the audited accounts (where it ought to have appeared as a Contingent Liability) or Chairman’s Review of their 2007 Annual Report – see

The second point is that the expose mentioned that the Angostura purchase was made at twice the listed price of the Lascelles Mercado shares. It is one thing for a company to take strategic decisions, using its own shareholders’ funds and paying ‘over the odds’ for assets, if that acquisition satisfies its objectives. That is one thing, but what we seem to have here is a mortgage bank guaranteeing a massive purchase of shares at twice the value. Was a due-diligence of the transaction done? If there was none, this would be a case in which shareholders’ and depositors’ monies were put needlessly at risk.

As far as I can tell, this is the kind of behaviour which led to the collapse of the entire CL Financial group. We in the media have a responsibility to do better.


One thought on “CL Financial – The bailout timeline

  1. This is good stuff! By the way, who were the auditors for the 2007 Clico annual report? Should they not get ‘some hard questions’ as well?

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