An­tho­ny Wil­son

In the past week, in pri­vate con­ver­sa­tions, two busi­ness ex­ec­u­tives ex­pressed great doubt to me about the like­li­hood or the will­ing­ness of the Gov­ern­ment to re­cov­er enough as­sets from the CL Fi­nan­cial em­pire to en­sure that tax­pay­ers are not left out of pock­et with re­gard to the bailout of the busi­ness em­pire that Lawrence Duprey built. This ex­treme cyn­i­cism at the abil­i­ty of the Gov­ern­ment to en­sure that the tax­pay­ers of T&T do not suf­fer as a re­sult of the mul­ti-bil­lion dol­lar bailout of CL Fi­nan­cial came as a sur­prise to me be­cause, as far as I am aware, the Gov­ern­ment has tak­en steps to re­cov­er every cent that the State has spent on the bailout.

At the an­nu­al meet­ing of An­gos­tu­ra on April 27, CL Fi­nan­cial chair­man Ger­ald Yet­ming, in an­swer­ing ques­tions from a share­hold­er, said that the Gov­ern­ment will be mak­ing a claim on CL Fi­nan­cial to re­cov­er the bil­lions of dol­lars that the con­glom­er­ate has re­ceived from the State since the sign­ing of the Mem­o­ran­dum of Un­der­stand­ing on Jan­u­ary 30, 2009.

Ac­cord­ing to Yet­ming, in or­der to fa­cil­i­tate the claim that the Gov­ern­ment is go­ing to make on CL Fi­nan­cial, there was an ex­pec­ta­tion that the share­hold­ers of CL Fi­nan­cial would agree to the ex­ten­sion of the June 2009 Share­hold­ers Agree­ment (which agree­ment ex­pires at mid­night on Tues­day com­ing).

At the spe­cial meet­ing of the CL Fi­nan­cial share­hold­ers on May 14, it was agreed by a unan­i­mous vote that a com­pa­ny with two share­hold­ers as di­rec­tors would be em­pow­ered, on be­half of the 360 or so share­hold­ers of the con­glom­er­ate, to ne­go­ti­ate the terms of the Gov­ern­ment's claim on CL Fi­nan­cial.

Ac­cord­ing to my cal­cu­la­tions, the gross claim would be $16.3 bil­lion and count­ing, com­pris­ing:

• The $9 bil­lion in cash and ze­ro coupon bonds for 20 years that the own­ers of the short-term in­vest­ment prod­ucts is­sued by Cli­co and British Amer­i­can (Trinidad) have al­ready re­ceived in lieu of giv­ing up their rights to any fur­ther claims on ei­ther of the two in­sur­ance com­pa­nies. My un­der­stand­ing of this is that the Gov­ern­ment would stand in the shoes of the pol­i­cy­hold­ers, ac­cord­ing to Cli­co chief ex­ec­u­tive Car­olyn John, which would mean that the Gov­ern­ment would take the place of all the pol­i­cy­hold­ers, who ac­cept­ed the bailout, in re­la­tion to the Cli­co statu­to­ry fund;

• The $5 bil­lion in cash and bonds that the Gov­ern­ment pumped in­to Cli­co in 2009 and 2010, most of which was con­vert­ed in­to pref­er­ence shares ac­cu­mu­lat­ing in­ter­est at four per cent a year and con­sti­tut­ing the Gov­ern­ment's 49 per cent stake in Cli­co;

• The $2.3 bil­lion that the Gov­ern­ment made avail­able to pay en­sure that all of the in­di­vid­ual, third-par­ty de­pos­i­tors of Cli­co In­vest­ment Bank re­cov­ered all of their de­posits in the failed fi­nan­cial in­sti­tu­tion.

As far as I am aware, from the $16.3 bil­lion and count­ing, the fol­low­ing would need to be sub­tract­ed in or­der to cal­cu­late the Gov­ern­ment's claim on CL Fi­nan­cial:

• The val­ue of the Gov­ern­ment's 49 per cent stake in Cli­co. While the in­sur­ance com­pa­ny's 2010 ac­counts have not been pub­lished as of Wednes­day morn­ing, Cli­co has con­sid­er­able as­sets, in­clud­ing its 56.4 per cent stake in Methanol Hold­ings (Trinidad) Ltd (MHTL), its 51.7 mil­lion shares in Re­pub­lic Bank worth $95.66 a share and its 67 mil­lion shares in An­gos­tu­ra worth $8.50 a share. Cli­co's stake in MHTL, which is the sub­ject of ar­bi­tra­tion pro­ceed­ings in Lon­don brought by mi­nor­i­ty share­hold­ers, would be par­tic­u­lar­ly valu­able;

• The val­ue of CMMB, which was ac­quired by First Cit­i­zens in 2009 for $1, would al­so need to be de­ter­mined and net­ted off the $16.3 bil­lion.

At the end of the day, the Gov­ern­ment would have bought out the short-term in­vest­ment prod­uct hold­ers and would con­sti­tute the ma­jor­i­ty of li­a­bil­i­ties held by the non-tra­di­tion­al pol­i­cy­hold­ers (up to $12 bil­lion) and the State would al­so have a 49 per cent stake in Cli­co. In the con­text of all of these facts, is the cyn­i­cism about the will­ing­ness and abil­i­ty to go af­ter the Cli­co as­sets jus­ti­fied? I think the read­ers would have to be the judge of that. I have formed my own opin­ion. But ei­ther way, the re­la­tion­ship that the for­mer chair­man of CL Fi­nan­cial, Lawrence Duprey, has with cer­tain politi­cians in this coun­try needs to be fac­tored in­to the mix as well as the civ­il lit­i­ga­tion case brought by the Cen­tral Bank against him and oth­ers. At some point, giv­en the cyn­i­cism and lack of trust that abounds in this so­ci­ety, the Gov­ern­ment is go­ing to need to dis­play a great deal more trans­paren­cy and ac­count­abil­i­ty than has hith­er­to been the case.

The Gov­ern­ment's main point­man on the CL Fi­nan­cial is­sue is Yet­ming, who al­so serves as chair­man of CL Fi­nan­cial, Cli­co, An­gos­tu­ra and the Ja­maican rum pro­duc­er Las­celles de­Mer­ca­do.

In Yet­ming's ab­sence, oth­er rep­re­sen­ta­tives of CL Fi­nan­cial at­tempt­ed to re­strict the pub­lic's right to know what is go­ing on with the bil­lions of dol­lars that tax­pay­ers have in­vest­ed in Cli­co and CL Fi­nan­cial by threat­en­ing le­gal ac­tion against a jour­nal­ist who at­tend­ed the May 14 spe­cial meet­ing of CL Fi­nan­cial as the hold­er of a proxy from a share­hold­er. That jour­nal­ist re­ceived a let­ter from Mar­jorie Nunez of Lex Caribbean on the night of May 14 claim­ing that gen­er­al meet­ings of share­hold­ers are pri­vate and con­fi­den­tial "and that the in­tend­ed pub­li­ca­tion by your An­tho­ny Wil­son of the mat­ters dis­cussed at the meet­ing, res­o­lu­tions passed and pho­tographs will be a breach of com­pa­ny law prac­tice and pro­ce­dure which re­quires that mem­bers of the me­dia be ad­mit­ted to a meet­ing of share­hold­ers on­ly if the share­hold­ers present ap­prove." The threat of le­gal ac­tion was ig­nored and a short, in­of­fen­sive sto­ry was writ­ten on the meet­ing. But the at­tempt to block the pub­li­ca­tion of in­for­ma­tion that the tax­pay­ing pub­lic has a right to know is dis­turb­ing and does not be­speak an at­ti­tude of trans­paren­cy and ac­count­abil­i­ty.

As both of the busi­ness­men who spoke to me on this is­sue point­ed out, the cash and bonds that the pol­i­cy­hold­ers have re­ceived is in ef­fect tax­pay­ers' mon­ey that could be used to build roads, schools, bridges, hire more teach­ers, nurs­es and doc­tors or in­crease the salaries of pub­lic ser­vants. The point needs to be made, though, that the Gov­ern­ment has put it­self in place to se­quester the as­sets of Cli­co. If it does not fol­low through on tak­ing own­er­ship of enough of those as­sets to rea­son­ably com­pen­sate the tax­pay­ers of this coun­try, there are like­ly to be po­lit­i­cal con­se­quences. No doubt, all of the mat­ters ven­ti­lat­ed in this col­umn will be giv­en a prop­er air­ing at the an­nu­al gen­er­al meet­ing of CL Fi­nan­cial, which takes place to­mor­row at 5pm at the Cli­co Box at the Queen's Park Oval.

At that meet­ing, the share­hold­ers of the com­pa­ny will be asked to con­sid­er the fol­low­ing:

• To ap­prove the ex­ten­sion of the GORTT/CL Fi­nan­cial agree­ment for a six-month pe­ri­od;

• To elect share­hold­er di­rec­tors for the pe­ri­od end­ing De­cem­ber 31, 2012;

• To rat­i­fy the ap­point­ment of the GORTT di­rec­tors for the pe­ri­od end­ing De­cem­ber 31, 2012.