The CL Financial bailout fiasco is headed towards an epic legal mangle as Lawrence Duprey and his cohort aim to regain control of the Caribbean’s largest-ever commercial/financial group. In swift response, the Minister of Finance is making legal moves to put CLF into liquidation.
At the root of this dispute is the actual sum of Public Money spent on this immense bailout and when, or if ever, it is to be repaid. I have been involved in extended litigation to get the details of the bailout from the Ministry of Finance and the High Court ruled in my favour in July 2015, with that result now being contested in the Appeal Court.
One of the details requested by me was the audited accounts of CLF since the bailout started. This presents two serious issues for consideration.
- Firstly, one has to note that when CLF was under the control of its original owners, annual audited accounts were published every year. The last time annual audited accounts were published for CLF was for the financial year ending 31 December 2007. So why is the State unable or unwilling to publish the audits since taking control? One has to wonder, especially in light of official statements that an estimated $3.2 Billion has been spent on professional fees and other associated costs.
- Secondly, there is the pregnant question of just how much is owed? In the mid-year Budget review of 10 May 2017, the Minister of Finance stated that debt to be of the order of $27.7 Billion. It was reported in the Trinidad Express on Friday 14 July 2017 that the Minister of Finance clarified –
“…Prior to this Government coming into office the approach to that matter was less than perfect. We are the first Government since 2010, which did a proper accounting exercise using qualified accounting personnel and the records at the Ministry….one of the good things that would come out of this application is that the matter is now in the public domain and the public can see for themselves based on the affidavit of the Permanent Secretary exactly how much money was spent and on what…”
“…So the $23 billion is a base and it is anticipated that it is more. But these have not been quantified at this point in time…”
Even if one accepts this statement – ‘Why the Ministry is still pursuing an expensive appeal to suppress the very same figures?‘ The State’s refusal and/or failure to publish audited accounts will be detrimental in any negotiation with CLF or indeed, any courtroom battle.
Another issue to be weighed is that interest has only been charged (at 4.75%) on the first $5.0 Billion payment in this bailout. That’s right, the rest of the money was advanced interest-free to cover CLF’s debts.
In addition, our CARICOM partners are now demanding that T&T should now pay debts owed to CARICOM citizens who lost money in this huge collapse of CLF. T&T is now being asked to pay the balance of $50M USD owed to CARICOM citizens as settlement of its commitment to pay $100M USD against those claims. The sums of Public Money spent thus far have only been paid to T&T debtors.
This grim situation is made all the more serious by the fact that the regulatory and investigative processes appear to have been stalled. The Colman Commission of Enquiry was established to investigate the causes of CLF’s failure, but its report was effectively suppressed, reportedly at the request of the DPP. According to Dr Rowley’s statement to Parliament on 1 July 2016 –
“…This country should rest comfortably in the knowledge that the Government of Trinidad and Tobago…will do nothing to impede the flow of justice in this or any matter. And we will do everything within its duty and authority to facilitate the holding to account any and all persons who may have been found to have questions to answer. Like every other citizen, it is our expectation that as rights to fair treatment are protected, justice must always take its course swiftly…” (emphases are mine)
Yet the DPP is silent as to the progress of this matter of the highest public importance. The DPP needs to issue a clear statement on the CLF matter.
Apart from the serious concerns as to the suppression of the Colman Report, there is the role of the Central Bank in this debacle. The existing fit and proper guideline of May 2005 would readily disqualify Lawrence Duprey and his cohort from ever becoming Directors, Officers or Controlling Shareholders of any financial institution in this country, yet those rules have not been implemented, for whatever reason.
At this juncture, we are faced with the bitter reality that if the litigation or negotiations go in favour of Lawrence Duprey and his cohort, we could be faced with the return of persons described by the PM in his 1 July 2016 statement to Parliament on the Colman Report –
- “…Having perused the report myself…I can advise the population that it contains very serious allegations of criminal misconduct on the part of a handful of privileged individuals who were associated with the Clico/CLF group of companies…”
- “…a number of adverse findings of criminal misconduct of a kleptocratic nature were found…”
I tell you.
We are also now reading emphatic statements from that cohort of former CLF chiefs as to their entitlement to recover their former positions. I can scarcely imagine a more offensive and damaging conclusion than the return of Duprey and his cohort to control of CLF.