Lawrence Duprey and the other CL Financial chiefs could soon be regaining their positions, which is a public concern at this time. I consider that to be an unacceptable prospect and that was stated in my joint open letter to the Central Bank Governor on 31 January 2017. Both Anthony Wilson and Mary King took issue with those views of mine in the Business Guardian of 27 April 2017.
The arguments coming from Wilson and King emphasise Duprey’s property rights as the major shareholder of CLF. Wilson, who is the Business Guardian editor, appears to agree with me that the CLF chiefs could not satisfy the central bank’s ‘fit and proper’ rules which apply to those who direct, manage and hold controlling shareholdings in financial institutions. He also made the important point that there are companies in CLF which are not financial institutions and therefore Duprey ought to be able to regain control of those, provided the bailout sums are recovered. The main non-financial companies in the CLF group are Home Construction Ltd., Angostura, CL World Brands and CL Marine. I am still unclear, from Mary King’s article, whether she holds the view that the CLF chiefs are still fit and proper persons.
Mary King explained the CLF model of harvesting short-term, low-risk capital via EFPA etc for diverse long-term, high-risk international investments, by drawing on the ‘Plantation Model’ as originally rendered by the late Lloyd Best.
What is really going on here is that the CLF bailout and its subsequent handling has been so badly done that one is now forced to contemplate that these chiefs could reclaim their former positions, if the money is repaid.
There are four reasons why we are in this position –
- Accounts – No audited accounts have ever been published for the group since the start of the bailout. One therefore has to wonder where can reliable figures be found. It is entirely unacceptable that we should only be getting unverified figures from various public officials. The latest estimate of Public Money owed by CLF is $27.7Bn, as disclosed at pg 38 of the Minister of Finance’s ‘Mid-Year Budget Review‘. Public Money is meant to be managed and accounted for to a higher standard than Private Money. If we don’t really know the real numbers, what are we actually discussing? How can we be discussing repayment of an uncertain debt? It seems to be carefully crafted confusion and in my view, the lack of accounts is to the detriment of the State’s position in this critical issue.
- Interest – Virtually-Zero Interest is being paid by CLF on these vast sums of Public Money which were advanced for the bailout of CLF. If proper interest were paid, the prospects for Duprey regaining control of anything would be slight, if any. I have to say that Mary King’s attempts to invoke the Wall Street bailout etc are risible, given that all those troubled financial institutions paid punitive interest. In the case of AIG, which King cited, they paid interest of almost four times the base rate and relinquished 85% of their shares. Duprey is paying less than 1% interest on the huge sums of Public Money borrowed and kept his shareholding, hence this painful discussion.
- The Courts – The Civil Suits and Criminal Prosecutions appear to have either been halted or delayed.
- The Central Bank – There has been no application of the Fit and Proper rules, so there is every danger that Duprey could regain his position, whatever Anthony Wilson and I might appear to agree on.
This situation calls for utmost vigilance. Plantation Model, my foot.
SIDEBAR: Back Tax?
On 13th November 2011, the Trinidad Express published
‘BIR files claims on CL Financial ‘fat cats’ No PAYE paid on million$‘.
This is from the first two sentences –
…Top executives in the disgraced CL Financial conglomerate made off with tens of millions of dollars in consultancy fees and commissions for which no taxes were paid while raking in fat annual pay deals with generous perks which included a luxury car, club membership and corporate credit card, among other things.
The group’s former top three corporate bosses, Lawrence Duprey, Andre Monteil and Gita Sakal, and Duprey’s personal chauffeur Rupert Superville were paid a whopping $80.3 million in consultancy fees and commissions for which no taxes were paid to the Board of Inland Revenue (BIR), according to a Pay-As-You-Earn (PAYE) BIR tax assessment for income years 2007 to 2009…
(emphases are mine)
SIDEBAR: Fit and Proper?
On 15th April 2017, the Trinidad Express published ‘Duprey sells his shares but holds on to MotorOne‘ in which it was disclosed that –
…IT has been 18 months since Kallco Ltd…paid US$4.5 million (TT$30 million) for a 62 per cent shareholding in MotorOne Insurance.
Industry insiders told the Sunday Express they are aware of the transaction, but in all its official documents, MotorOne remains in the hands of its principal owner, Lawrence Duprey…
A source close to the transaction explained to the Sunday Express it was “ironic” that Duprey, a person not qualified to meet the Central Bank’s present “Fit and Proper” guideline, remains the owner of the company on paper…