CL Financial bailout – the Caribbean Connection

My previous article examined the November 2007 appointment of Karen Nunez-Tesheira as our Minister of Finance by then PM, the late Patrick Manning. For whatever reason, the consternation over the appointment of Christian Mouttet to investigate the #ferrygate imbroglio is reminding me of the confusion many people felt when PM Manning made that appointment. An eerie echo from the past, in this, The Season of Reflection.

This article appears the day before the anniversary of T&T’s 55th Independence Day. This week I examine the recent claims by the CLF group and its supporters as to its Black origin and so on. Those claims can be summarised as:

‘CLF is a black-owned and controlled conglomerate which has fallen into some difficulty and had to seek a bailout…it would be a tragedy to have such a company destroyed by liquidation or otherwise by the sitting black government’

This is emerging as a key element in the Duprey campaign, so it has to be seriously scrutinised by looking at the origins of CLF, the current stance of its shareholders and the pan-Caribbean aspects of this issue.

duprey-book
Subject of a biography, CLICO founder Cyril Duprey
colonial bank
The Colonial Bank

In 1936, CLICO was founded as an indigenous financial institution by persons of African descent. That much is clear from the records, but I also delve into the motivations and values which must have driven Mr Cyril Duprey’s pioneering efforts. At that time of great social turmoil amidst the 1937 Labour uprising, the local finance sector was dominated by foreign companies – the original being The Colonial Bank (founded in 1837) which became Barclays Bank – of course that is now the CLF-controlled Republic Bank. The Canadian banks now known as Royal and Scotia Banks opened here in the early 1900s.

penny bank
The Penny Bank

Locally, the other pioneers were Trinidad Building & Loan Association, founded in 1891, and the Trinidad Co-Operative Bank (The Penny Bank) founded in 1914. Both those institutions were founded by persons of African descent, with only the former surviving and thriving to this day. According to the Caribbean History Archives, Cyril Duprey was President of both TBLA and The Penny Bank in the early 1960s, at the same time as he was leader of CLICO. That triple achievement contrasts with contemporary concerns over the destructive nature of CLF’s ‘excessive related-party transactions’.

In the 1930s, the nascent insurance sector was ruled by Canadian companies, Sun Life and Standard Life. It was into that gayelle that Cyril Duprey and his cohort descended, so it is important to reflect on the name chosen for the new insurance company ‘Colonial Life‘. From what I understand, at that time, the word ‘Colonial’ was used to denote African or Indian subjects within the British colonial order. To have chosen that name, to my mind, was tantamount to founding a finance company today with the name ‘Nubian’. Such was the measure of those bravé danjé pioneers, led by the 38-year old Mr Cyril.

Hear one of the early salesmen, George Kangalee:

“…People thought we were joking when we started to sell insurance. They slammed their windows in our faces. A negro man coming to sell insurance! At that time, only the big people and the big companies sold insurance…”

Hear are the prescient words of Cyril Duprey:

“…While I agree that the creole people do not like creole business, there is one thing you fail to realize. If you give a man value, if you give a man service, irrespective of his background, he is going to support you. And I intend to give both…”

In 1961, the then Premier, Dr Eric Williams, gave the feature address at CLICO’s Silver Jubilee Convention at Queen’s Hall, these remarks are seminal –

“…When the decision was taken to form the company in 1936, it could only be that the founding fathers had a vision of the future, not only in Trinidad, but of the unborn Federation of the West Indies…”

Well yes. This leads us directly to the CARICOM issues.

CLF was built by harvesting investments and premium payments from the Caribbean region – the group had branches throughout the Eastern Caribbean: Guyana; Surinam; Belize; Barbados and The Bahamas.

The CLF group amassed revenues from policyholders and investors in the region, which were in turn used to develop its diversified portfolio of international investments. The central point being that the growth of the CLF group was financed, to a significant extent, by the contributions of our Caribbean brothers and sisters.

This table estimates the current liabilities of the CLF group arising from the 2009 collapse:

Country/Grouping Estimated Liability in $TT
Eastern Caribbean Currency Union (ECCU) 2.0 Billion
Guyana 210M
Surinam 131M
Belize Unknown
Barbados 1.354 Billion
The Bahamas 7.4M
ESTIMATED TOTAL 3.702 Billion

The ECCU members are: Antigua and Barbuda; Dominica; Grenada; St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines. The 2009 bailout agreements do not explicitly recognise the claims of the Caribbean investors, but then PM Patrick Manning made a 2010 pledge to pay $100M USD to meet those claims. In my estimation, that is less than one-fifth of the totals owed, but only $50M USD of the pledged amount has been paid, thus far.

I have heard no serious attempt to meet those Caribbean claims, from either our political leaders or the CLF shareholders now fighting to regain control of the group. There is an inescapable obligation to meet the claims of the Caribbean investors, especially within the context of the 1973 Treaty of Chaguaramas which requires ‘non-discrimination‘ in our policies.

Against that background, there is an arguable case that the agreements themselves, while satisfying requirements of form and authority via signatures and so on, are fundamentally inequitable since they effectively ignore valid claims.

Can T&T truly aspire to be regional financial centre while those claims from our Caribbean brothers and sisters are being effectively sidelined? Do the current CLF shareholders even recognise the contribution of those Caribbean brothers and sisters?

This deplorable situation is a good example of why in some parts of the region we are called ‘Trickydadians‘.

In my view there can be no sound claim by any of these leaders to either Black or Caribbean Leadership if these claims are not properly addressed.

Anything else is dangerous games of the most irresponsible type, which is how this whole mess started. You see?

© 2017, Afra Raymond. All Rights Reserved

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5 thoughts on “CL Financial bailout – the Caribbean Connection

  1. “I have heard no serious attempt to meet those Caribbean claims, from either our political leaders or the CLF shareholders now fighting to regain control of the group. ” Mr. Raymond as much as I agree that the Caribbean claims should be honored, I feel uncomfortable to the point of annoyed, when the onus is ‘insinuated upon’ our political leaders’ to treat with this. In my opinion we are all victims in this CL fiasco. T&T government saw it fit to recuperate public funds through the ordered dissolution, which I believe is a stellar move, the other victims Caribbean et al. should probably follow suit and organize through legal measures their piece of the barra, rather than sit by and expect the prevalence of memory, benevolence and integrity from the CL shareholders.

    1. Hello and Happy Independence, Camille…

      The key persons against whom I was aiming that charge are Lawrence Duprey and his cohort who are seeking to garner support by claiming the black leader posture. ..in any case, I am aware that the CARICOM claims have been formulated…I don’t know if any have been filed as yet…stay tuned…thanks

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