I: #tobepooristhecrime

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That opening stanza is my tweet of a witty friend’s remark at Ferdie Ferreira’s booklaunch and 85th Birthday celebrations on Wednesday 14 June 2017. It was not surprising to see Lawrence Duprey and Carlos John sitting together at that event. We may be seeing Duprey more and more, the way this fiasco is unfolding. There were some media reports that John was suing Duprey for some money owed, but the case now appears to have been resolved by agreement. I took little note of that case, except for one aspect, explained in the sidebar.

By now, we know that Duprey intends to regain control of the CL Financial empire which was bailed-out by the State after its failure in January 2009. There have been reports about Duprey’s legal demands that the State remove its Directors from the CL Financial board, with the State having asked for more time to respond. That contest for control of CLF is not the topic of this article, I am concerned here with the apparent failure and/or refusal of the Central Bank to apply its fit and proper regulations to the CL Financial chiefs.

Two criticisms of my position on the fit and proper regulations are that:

1. nobody has been convicted of, or even charged with, any criminal act, and that
2. I am placing too much reliance on the words of various politicians.

I actually base the fit and proper case against Duprey and the other CLF chiefs in the CLF letter of 13 January 2009 to the then Minister of Finance, Karen Nunez-Tesheira. That letter, signed by Duprey as CLF’s Executive Chairman, admitted that the group had failed and requested ‘urgent liquidity support’ from the Central Bank, as ‘lender of last resort’. CLF owned and controlled three banks – Barbados National Bank, Clico Investment Bank and Republic Bank – yet was forced into in an illiquid situation. Just imagine that.

These sections of the fit and proper rules as issued by the Central Bank in May 2005 speak to the issues –

The ‘Good Character’ test #8 at pg. 5 states –

8.1.5 Whether the person has been the owner, manager or director of a company, partnership or other organization that has been refused registration, authorization, membership or a licence to conduct trade, business or profession, or has had that registration, authorization, membership or licence revoked, withdrawn or terminated;

8.1.7 Whether the person has been a director, partner, or otherwise involved in the management of a business that has gone into receivership, insolvency, or compulsory liquidation while the person was connected with that organization or within a reasonably short period (e.g. one year) after the person’s departure from the institution;

One can also refer to the Central Bank’s May 2011 letter to financial institutions, which states –

“…Further, enhanced due diligence should be applied when considering persons for the position of an officer or director if such persons were previously employed or involved with a failed or failing financial institution. In such circumstances, the registrant should give due consideration to inter alia, the position that the person held and his/her role and function in the previous organisation…”

8.1.10 Whether the person has not been fair, truthful and forthcoming in dealings with customers, superiors, auditors and regulatory authorities within the past ten years and has been the subject of any justified complaint relating to regulated activities;

8.1.11 Whether the person demonstrates a readiness and willingness to comply with the requirements and standards of the regulatory system and other legal, regulatory or professional requirements and standards.

Finally –

10.2 In determining a person’s financial soundness, all relevant factors should be considered, including but not limited to:… 10.2.2 Whether the person has made any arrangements with his creditors, filed for bankruptcy, been adjudged bankrupt, had assets confiscated, or has been involved in proceedings relating to any of the aforementioned.

Any one of those sub-sections would disqualify all the CLF chiefs, but taken together, the case for fit and proper bans on all of them is irresistible, clear and compelling. That is my view.

So what is the Central Bank waiting for? This is a question that is yet to be answered. It is interesting to consider who are these other CLF Chiefs. Very interesting indeed.

II: The Other Chiefs

The two big chiefs are clearly Lawrence Duprey and Andre Monteil, but there were other chiefs in the CLF empire who still hold important positions in this country. So, who are those persons? This article will give some of those names, but makes no suggestion that any of those persons illegally enriched themselves or performed any of their duties in an improper manner.

First to be noted, the Central Bank does not need to wait for prosecutions or rely on the words of politicians. All the required evidence is in CLF’s 13 January 2009 letter to the Central Bank requesting a bailout – the one signed by Lawrence Duprey, who was then its Executive Chairman.

The State bailout started on Friday 30th January 2009, when the Memorandum of Understanding was signed. The companies which were to be bailed-out were: CL Financial Ltd (CLF); Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British American Insurance Company (Trinidad) Ltd (BAICO).

For those who would say that certain of those companies did not become insolvent here are the Terms of Reference of the Colman Commission of Enquiry, which were published in the Trinidad & Tobago Gazette of 17th November 2010 – No. 144 in Volume 49. This is the first sentence in the second paragraph –

…And whereas the President on the advice of the Cabinet has deemed it advisable and for the public welfare that a Commissioner be appointed to enquire into the failure of CL Financial Limited, Colonial Life Insurance Company (Trinidad) Limited, CLICO Investment Bank Limited, British American Insurance Company (Trinidad) Limited, Caribbean Money Market Brokers Limited and the Hindu Credit Union Cooperative Society Limited with a  view to ascertaining why such events occurred…” (emphases are mine)

Referencing section 8.1.7 of the ‘Good Character’ part of the fit and proper guideline cited above, a time-limit for involvement is specified as “within a reasonably short period (e.g. one year) after the person’s departure from the institution.”

So, the regulations apply to those who were Directors or Managers of financial institutions at the time of failure and also to those who had served in those offices up to one year before the failure.

The Names and details here are drawn from the public record, as well as online searches of the filings in the Registrar General’s Department –

• Faris Al Rawi was listed as a Director of CIB in its 21st January 2009 filing, having been appointed on 16th November 2006. Al Rawi is an attorney at law who previously served as an Opposition Senator in the 10th Parliament. He currently holds the office of Attorney General.
• Dr Bhoendradatt Tewarie was listed as a Director of CLF in its 17th February 2009 filing. Tewarie is former Minister of Trade and Industry during the NAR government and served as Minister of Planning and Sustainable Development during the PP government. He was also Principal of UWI’s St Augustine campus, after which he went on to be Executive Director of the Arthur Lok Jack Graduate School of Business and UWI’s Institute of Critical Thinking. Tewarie is now the UNC MP for Caroni Central.
• Ram Ramesh was listed as a Director of CMMB in its 19th February 2009 filing, having been appointed on 20th October 2008. Ramesh is Chartered Financial Analyst (CFA) who has served as CEO of the T&T International Financial Centre Ltd and was also Adviser to then Central Bank Governor, Jwala Rambaran. He is author of the Financial Analyst’s Indispensable Pocket Guide (2000) and is now Chairman of the Caribbean Centre for Leadership Development.
• Robert Mayers was CMMB’s Managing Director until his retirement in November 2008. He was listed as a Director of CMMB in its 28th February 2008 filing, having been appointed at inception on 9th September 2002. Mayers is a former Deputy Leader of the Congress of the People (COP) and is currently Chairman of both COLFIRE Ltd (which is an insurance subsidiary of the CLF group) and KSBM Asset Management.
• Michael Carballo was listed as a Director of CLF in its 17th February 2009 filing. Carballo is a Chartered Accountant, who was appointed as Group Financial Director of CLF after Andre Monteil’s resignation on 31st March 2008.
• Vishnu Ramlogan was listed as a Director of BAICO in its 27th June 2008 filing. He was also listed as a Director of CMMB in its 19th February 2009 filing, having been appointed on 20th October 2008. He is a former Chairman of Caroni (1975) Ltd, First Citizens Bank and TIDCO President.

I maintain that the Central Bank needs to act on the fit and proper regulations.