A Kaiso title for the Election season. And yes, we are told that CL Financial will rise again. The picture is even more clouded than a year ago and the rumours abound.
The latest developments are –
- Press conference of 24th March – Following a front-page Express story, on the impending lawsuit by Justice Carlton Best to recover his $57,000 CLICO deposit – see ‘I want my Cash’ at http://www.trinidadexpress.com/index.pl/article_news?id=161613671 – the Governor of the Central Bank held a press conference that very day to tell us that those waiting for the return of their deposits would have to hold strain – see http://guardian.co.tt/news/general/2010/03/25/delay-your-redemptions. The further shocking news, after all the emphatic official statements that the group had good assets, was that if those were liquidated there would only be 10 to 15 cents in the dollar available to pay claims. Now how could that possibly be the case? How are we to reconcile these conflicting accounts of the situation with CL Financial’s assets? Is it that they are fully-pledged, over-pledged, or is there actually any ‘headroom’ within which the taxpayer can have a chance to recover the huge sums advanced so far? Which is it? Please note that this is not an isolated situation, as shown by another threatened lawsuit from a former Attorney General of Guyana for the recovery of over $500,000 from CLICO – see http://www.kaieteurnewsonline.com/2010/03/27/former-attorney-general-threatens-to-sue-clico-trinidad/
- Post-Cabinet Press Briefing – The Minister of Finance confirmed the Governor’s position to the media the next day, as reported in this paper – http://guardian.co.tt/business/business/2010/03/26/tesheira-clico-policyholders-be-patient. In that article, the Minister is reported to have affirmed, again, that “…“The CL Financial Group had sound assets that were valued at more than $100 billion…” Both the Governor and the Minister took steps to recover their own funds before the group’s financial troubles were public knowledge and that sits awkwardly, in the public mind, with their current appeals for patience.
- Dr. Euric Bobb – At a Central Bank press conference on 31st March, resigned as Chairman of CLICO and as a Director of CL Financial, of which he was the Chairman, until his resignation late last year.
- Governance – His statements as to the poor governance at CLICO, the leading company in the CL Financial group, were astonishing, to say the least – see “Governance was an alien term in CLICO’ at http://guardian.co.tt/business/business/2010/04/01/bobb-governance-was-alien-term-clico. No reconciliation of the company’s bank accounts. No audit committee. Those are serious shortcomings in the basic accounting and governance controls in any company. For one which had investment as its centrepiece, those are shocking. They give the impression of unprofessional and haphazard management of a significant part of our nation’s savings. They detract from the reputation of the CL Financial chiefs. Surely these shortcomings found their way into the Management letter from the Auditor to the Board and Shareholders? Was the Central Bank aware that these elementary controls were absent? Even if there are serious shortcomings in the financial procedures at CLICO, are we not entitled to rely on the Supervisor of Insurance or Inspector of Financial Institutions to resolve those in favour of the investing public?
- Marlon Holder – At the same press conference, we heard that he resigned his job as Executive Director of the Unit Trust Corporation to become CEO/MD of CL Financial and Chairman of CLICO – see http://guardian.co.tt/news/general/2010/04/01/utc-boss-takes-over-clico-chairman. Mr. Holder has had a high-profile career in the financial services industry at Citibank, FCB and the Unit Trust Corporation, before this latest move and we await his recovery strategy.
- Reporting the changes – Both the CL Financial Chairman and the new CEO/MD recently confirmed that one of their leading priorities was to furnish a report on the state of the group and the progress towards its re-structuring. That report is anxiously awaited and must include the audited accounts for 2008 and 2009. As stated before, this is not negotiable and will be most revealing as to the apparent discrepancies in the asset values.
- The Private assets – We also read recently that former CL Financial chief, Lawrence Duprey, had taken steps to limit the information he was required to furnish to the liquidator of CLICO (Bahamas) as to his private assets, allegedly acquired with CLICO funds – see http://www.trinidadexpress.com/index.pl/nart?id=161623489.
Hence this week’s title. We await the audited figures.
SIDEBAR: Leading Lawsuit
There were reports in the Sunday Express of 11th April that the Central Bank had initiated legal action against Andre Monteil and Richard Trotman, both formerly of CLICO Investment Bank, for the recovery of huge sums allegedly obtained improperly in the HMB takeover – see http://www.trinidadexpress.com/index.pl/nart?id=161626823 and http://www.trinidadexpress.com/index.pl/nart?id=161626819
Those moves by the Inspector of Financial Institutions represent, as far as I am aware, the first time that legal action is being taken on this scale to tackle those accused of ‘white collar’ crime. It is a decisive step to tackle the widespread impression that jail is not for the rich or lettered class in this society. The course of this trial will be closely observed as it is the first step in a very long and necessary journey.
Our notions of development are rooted in the aspiration toward equality and opportunity. Those worthwhile concepts must be extended to include true equality under the law.
One of the really fascinating aspects of this unfolding financial debacle, which includes the UdeCOTT collapse, is the idea that those accused of this sort of wrongdoing have extensive rights. That kind of consideration is seldom offered to those accused of run-of-the-mill crimes. If nothing, else, the CIB trial will be a kind of long-overdue ‘Open University’ course in the boardroom dealings which are masked from most of our people.