Asha Javeed

The cred­i­bil­i­ty of for­mer CL Fi­nan­cial's fi­nance head Michael Car­ballo was chal­lenged yes­ter­day as at­tor­neys, ques­tioned his stew­ard­ship and the role he played in the failed Lawrence Duprey em­pire. He was chal­lenged at the com­mis­sion of en­quiry in­to the col­lapse of the CL Fi­nan­cial Group and the Hin­du Cred­it Union at the Win­sure Build­ing, Rich­mond Street, Port-of-Spain. Lead­ing the fir­ing line was Christo­pher Hamel-Smith, at­tor­ney for Pro­man Hold­ings, which had con­tro­ver­sial­ly ac­quired one of Cli­co's prized as­sets, Cli­co En­er­gy Ltd (CEL) on Feb­ru­ary 4, five days af­ter CLF had signed a MOU with the Gov­ern­ment of Trinidad and To­ba­go. Car­ballo had told the com­mis­sion the as­set, which was val­ued at over US$200 mil­lion, had been sold for a pal­try US$46.5 mil­lion, with the knowl­edge of three CLF di­rec­tors-Gi­ta Sakal, Ram­per­sad Moti­lal and Duprey.

CEL was one of three as­sets, the oth­er two be­ing MHTL and Re­pub­lic Bank Ltd owned by Cli­co, which CLF's 289 de­pend­ed on for cash. Hamel-Smith ar­gued that Cli­co had been in the habit of in­flat­ing its as­set prices and that, de­spite Car­ballo's re­liance on da­ta pro­vid­ed to him by Cli­co that CEL was worth US$200 mil­lion, there was a pos­si­bil­i­ty that its val­ue was much low­er. Fur­ther Hamel-Smith ob­served that Car­ballo's fig­ure did not take in­to ac­count dis­count rate and "back-up" cal­cu­la­tions. In seek­ing to jus­ti­fy Pro­man's right to ac­quire CEL, Hamel-Smith ob­served that both cor­po­rate sec­re­tary Sakal and Moti­lal, as part of CLF's sub-com­mit­tee to re­view in­vest­ments, were part of sale ne­go­ti­a­tions. Com­mis­sion­er Col­man agreed to al­low an in­de­pen­dent fi­nan­cial ex­pert to con­sid­er Pro­man's case.

Mean­time, Fyard Ho­sein SC, rep­re­sent­ing the Min­istry of Fi­nance, ques­tioned how CLF could have paid a div­i­dend to its share­hold­ers on Jan­u­ary 23 on the same day it was meet­ing with the min­istry to sort out the com­pa­ny's liq­uid­i­ty woes. Ho­sein ob­served that CLF was in breach of the Com­pa­nies Act and fur­ther, that CLF di­rec­tors could be held ac­count­able. Car­ballo ar­gued that had the div­i­dend, which was owed for the 2007 fi­nan­cial year and al­ready had been set aside, there would have been a sig­nif­i­cant up­ris­ing, giv­en the pow­er of Duprey's fam­i­ly in­ter­est. Ho­sein even ques­tioned how Car­ballo felt af­ter be­ing over­looked by Duprey, in favour of his pre­de­ces­sor, An­dre Mon­teil, to lead ne­go­ti­a­tions with the Gov­ern­ment. De­spite his ad­mis­sion that from ear­ly 2008 CLF was hav­ing liq­uid­i­ty is­sues, Car­ballo told the in­quiry that while he was "up­set" over the sit­u­a­tion, he "could not in my own con­science leave the com­pa­ny in that state."

And while hold­ing a top job in the com­pa­ny, he main­tained he had no knowl­edge of Duprey's salary even when Cli­co's at­tor­ney Neil Bis­nath point­ed out that that Cli­co had paid $1.1 bil­lion from 2004-2008. Cen­tral Bank's lead at­tor­ney Bankim Than­ki re­ferred to e-mails by for­mer Cli­co chief fi­nan­cial of­fi­cer, Karen Gardier, in which div­i­dend pay­ment from MHTL was re­quest­ed by CLF to aid in its pur­chase of Las­celles de Mer­ca­do. Cli­co, she had ar­gued, had need­ed the mon­ey to pay pol­i­cy­hold­ers. Gardier had warned that if Cli­co was un­able to pay its pol­i­cy­hold­ers it would trig­ger a run on all three in­sti­tu­tions-CIB, Cli­co and BA-with the sug­ges­tion that Car­ballo and Mon­teil, who were in­trin­si­cal­ly in­volved in Las­celles ne­go­ti­a­tions, would jeop­ar­dise the group. Car­ballo's cross-ex­am­i­na­tion con­tin­ues to­mor­row.