A company with a minority shareholding in CL Financial (CLF), which has put forward a proposal to clear the conglomerate’s remaining debt to the Government, has lost its bid to obtain its audited financial records for the past three years.
Delivering an oral decision at the Hall of Justice in Port-of-Spain yesterday, High Court judge Kevin Ramcharan ruled that the National Energy Vehicle Infrastructure Corporation of T&T (NEVICOTT) was not entitled to the documents, which it claims is necessary to secure US$2 billion from foreign investors.
Ramcharan stated that conglomerate’s liquidators were not required to produce such records considering the current state of the company and that the costs associated with such an exercise outweigh the potential benefits.
He also suggested that he had concerns over the viability of NEVICOTT’s proposal.
“The information does not satisfy me that there is a strong possibility that action would be successful in bringing the company out of liquidation,” he said.
Ramcharan did note that the conglomerate’s joint liquidators admitted that they had issues with finding the company’s audited financial records for between when the Government bailed it out in 2009 to when it (the Government) successfully applied to liquidate it in 2017.
“I make no comment on the failure of the board but that is what might have landed the company in the position it is in now,” Ramcharan said.
As part of his decision, Ramcharan dismissed NEVICOTT’s parallel application for an injunction seeking to block moves by the joint liquidators to dispose of CLF’s stake in Methanol Holdings (Trinidad) Limited and Holiday Inn in Trincity.
His decision now clears the way for the liquidators to complete the transactions.
In a brief interview afterwards, NEVICOTT’s lawyer Peter Taylor admitted that Ramcharan’s decision derailed its plans to clear the debt and retake control of the conglomerate’s remaining assets.
“Yes, it does affect our proposal because we would have needed the audited financial statements. No one was going to invest in a company if they do not know its health,” Taylor said.
He also said that he and his client were disappointed by the outcome.
“Transparency must be at the core of any investigation, liquidation or any type of disposing of assets. What we have found as shareholders, is that any time you are withholding information, it means you have something to hide,” he said.
Taylor said that he planned to meet with his clients to decide whether to appeal the decision based on a case decided, last month, in which High Court judge Frank Seepersad ordered the Ministry of Finance to disclose the specific sums of money paid to creditors since Government’s $26 billion bail-out.
He also noted that his clients were also currently considering bringing a judicial review lawsuit over the failure of the Central Bank to relinquish control of CLF’s subsidiary Clico.
In a letter sent to Central Bank Governor Alvin Hillarie, last month, Taylor quoted several relatively recent reports from the Central Bank, in which it stated that it planned to give up control of the bank after it achieved a positive net worth of over $600 million in December, last year.
NEVICOTT’s involvement in the conglomerate began last year when it acquired 5,878 shares in CLF from attorney David Hannays.
The sale had to be approved by Ramcharan, who granted the Government’s move to put the group in liquidation in 2017 and approved its joint liquidators.
NEVICOTT has claimed that it has a financial arrangement with an investment firm, registered in the Cayman Islands, to provide US$ 2 billion to clear the group’s remaining debt to Government.
In response to the application, the joint liquidators contended that the court should not stop the sales as it would mean that the group may incur more legal liability as the deal for the sale of the hotel was struck before the challenge was mounted.
The liquidators also questioned the company’s ability to prove it has the funding and are contending that remaining debt is more than twice what the company claims it has to inject.
NEVICOTT was also represented by Felix Celestine.