An­tho­ny Wil­son

Last Fri­day, a usu­al­ly re­li­able source told me that the mi­nor­i­ty share­hold­ers of Methanol Hold­ings Trinidad Ltd (MHTL) had dis­cussed a pro­pos­al with Fi­nance Min­is­ter Lar­ry Howai that would al­low T&T in­di­vid­u­als and in­sti­tu­tions to buy back up to 40 per cent of the methanol-pro­duc­ing com­pa­ny.

The con­text of that pro­pos­al is the fact that MHTL's mi­nor­i­ty share­hold­ers, who op­er­ate through a hold­ing com­pa­ny called Con­sol­i­dat­ed En­er­gy Ltd (CEL), ini­ti­at­ed ar­bi­tra­tion pro­ceed­ings be­fore a tri­bunal at the ICC In­ter­na­tion­al Court of Ar­bi­tra­tion against Cli­co, CL Fi­nan­cial and MHTL in May 2011.

Those pro­ceed­ings fo­cused on two is­sues:

The Gov­ern­ment's trans­fer of shares equal to 6.54 per cent of MHTL from CL Fi­nan­cial to Cli­co–in sat­is­fac­tion of a $1.1 bil­lion deben­ture–was in breach of the loan, se­cu­ri­ty and share­hold­er agree­ments by which MHTL was es­tab­lished

The di­rec­tors ap­point­ed by the Gov­ern­ment to sit on the MHTL board man­aged the com­pa­ny in a way that was op­pres­sive to the mi­nor­i­ty share­hold­ers

Ac­cord­ing to the MHTL Web site, the T&T na­tion­als who sit on the com­pa­ny's board are its chair­man Jagdeesh Siewrat­tan, and its di­rec­tors Cli­co CEO Car­olyn John, Cli­co and CL Fi­nan­cial chair­man Ger­ald Yet­ming, man­age­ment con­sul­tant Denyse Mehta and for­mer MHTL CEO Ram­per­sad Moti­lal.

Pro­man, an en­gi­neer­ing, pro­cure­ment and con­struc­tion com­pa­ny with of­fices in Ger­many, Switzer­land, and on the Point Lisas In­dus­tri­al Es­tate, is the ma­jor­i­ty share­hold­er of CEL.

The be­lea­guered in­sur­ance com­pa­ny, Cli­co, owns 56.53 per cent of MHTL.

In their claims be­fore the ar­bi­tra­tion tri­bunal, CEL ar­gued that the trans­fer of the ma­jor­i­ty stake in MHTL to Cli­co does not re­spect Con­sol­i­dat­ed En­er­gy's rights of pre-emp­tion–which means that if CL Fi­nan­cial was go­ing to trans­fer the shares, it should have of­fered them to the Ger­man mi­nor­i­ty share­hold­ers first.

They al­so claimed that the MHTL share­hold­ers agreed that it would not sell or trans­fer its shares in MHTL un­less it had ob­tained KfW's writ­ten con­sent.