An­tho­ny Wil­son

As part of his glob­al am­bi­tions, for­mer ex­ec­u­tive chair­man of CL Fi­nan­cial Lawrence Duprey set up a com­pa­ny called CL World Brands in 2003, short­ly af­ter he pur­chased the Scotch dis­tiller, Burn Stew­art.

As far as can be de­ter­mined by ex­am­i­na­tion of the an­nu­al re­ports of the com­pa­ny, Mr Duprey and Fras­er Thorn­ton, the man­ag­ing di­rec­tor of Burn Stew­art Dis­tillers, served as the two CL World Brands di­rec­tors dur­ing 2008.

CL World Brands's 2009 ac­counts state that Mr Duprey re­signed as a di­rec­tor of the com­pa­ny on Ju­ly 22, 2009, leav­ing Mr Thorn­ton as the on­ly CL World Brands di­rec­tor who held of­fice at De­cem­ber 31, 2009 and served through­out the year.

Mr Thorn­ton served as the on­ly di­rec­tor of CL World Brands be­tween Ju­ly 22, 2009 and No­vem­ber 3, 2010, when one An­drew Mitchell and Wayne Yip Choy joined the board, ac­cord­ing to CL World Brands's 2009 and 2010 ac­counts.

The dates of Mr Thorn­ton's ap­par­ent ser­vice as CL World Brands's sole di­rec­tor are im­por­tant.

On April 29, 2010–the same day that he signed off on the com­pa­ny's 2008 ac­counts–a share pur­chase agree­ment was signed by CL World Brands for the pur­chase of six com­pa­nies owned by Groupe An­gos­tu­ra SA, which is a whol­ly owned sub­sidiary of CL Fi­nan­cial. Some 58 per cent of CL World Brands is owned by CL Fi­nan­cial, while the bal­ance is held by Cli­co.

Un­der the terms of the agree­ment, CL World Brands "paid" �19.24 mil­lion to Groupe An­gos­tu­ra (Su­isse) SA for the share cap­i­tal of CL World Brands Glob­al Du­ty Free, E&A Scheer, An­gos­tu­ra SA, S Fass­bind, Fass­bind Com­panie Su­isse de Dis­tri­b­u­tion et d"ex­por­ta­tion and Paragon Vin­ters Ltd. E&A Scheer was sold for �4 mil­lion in Ju­ly 2010.

The con­sid­er­a­tion, for what was de­scribed in the CL World Brands 2010 ac­counts as a ma­jor non-cash trans­ac­tion, was sat­is­fied by an in­ter-com­pa­ny loan.

The con­sid­er­a­tion was al­so sat­is­fied by the as­sign­ment of third-par­ty debt, with CL World Brands buy­ing out loan val­ues amount­ing to �9 mil­lion, which were pre­vi­ous­ly ow­ing to Groupe An­gos­tu­ra (Su­isse) SA. CL World Brands en­tered in­to an assig­na­tion of debt owed by Groupe An­gos­tu­ra (Su­isse) SA to Cli­co In­vest­ment Bank, which was placed in liq­ui­da­tion by the High Court on Oc­to­ber 17, 2011, for the amount of �11.55 mil­lion.

The trans­ac­tion took place at a time when not much at­ten­tion was be­ing paid to CL Fi­nan­cial: For­mer Prime Min­is­ter Patrick Man­ning dis­solved Par­lia­ment on April 8 and called the gen­er­al elec­tion on April 16, which means that the Min­is­ter of Fi­nance would have been oth­er­wise oc­cu­pied.

One ob­vi­ous ques­tion is this: Who in the Gov­ern­ment in April 2009, pro­vid­ed the pri­or ap­proval for this trans­ac­tion?

This ques­tion is asked in the con­text of the fact that the Jan­u­ary 30, 2009 Mem­o­ran­dum of Un­der­stand­ing signed by then ex­ec­u­tive di­rec­tor of CL Fi­nan­cial, Lawrence Duprey, re­quired the com­pa­ny to make "full and fair" dis­clo­sure of all CL Fi­nan­cial com­pa­nies and their as­sets and li­a­bil­i­ties.

The MOU al­so stopped "any new in­ter-com­pa­ny trans­ac­tion, any in­creas­es in salaries of di­rec­tors and se­nior of­fi­cers, any pay­ments of div­i­dends, bonus­es, share op­tions and any dis­pos­al of as­sets with­out a sched­ule pro­vid­ed to the Gov­ern­ment for its pri­or ap­proval."

�2 If Thorn­ton was the on­ly CL World Brands di­rec­tor when he ap­proved the trans­fer of CL Fi­nan­cial as­sets to CL World Brands, on whose au­thor­i­ty and di­rec­tion was he act­ing?

�2 Did the board of CL Fi­nan­cial, which would have been chaired by man­age­ment con­sul­tant Shafeek Sul­tan-Khan be­tween Ju­ly 2009 and June 28, 2010 ap­prove the trans­ac­tion?

Some ques­tions should be asked of the ap­point­ment on No­vem­ber 3, 2010, of An­drew Mitchell as the chair­man of CL World Brands.

Mitchell is an Eng­lish QC who is one of three CL Fi­nan­cial di­rec­tors who rep­re­sent the in­ter­ests of the share­hold­ers of the group.

Re­mem­ber that the June 12, 2009 share­hold­ers' agree­ment be­tween the Gov­ern­ment and CL Fi­nan­cial al­lowed the Gov­ern­ment to ap­point four of the sev­en di­rec­tors on the CL Fi­nan­cial board with three di­rec­tors be­ing ap­point­ed by the share­hold­ers of the group, who in­clude Lawrence Duprey, the for­mer ex­ec­u­tive chair­man who con­trols a ma­jor­i­ty stake.

Mitchell, who rep­re­sents Duprey's in­ter­ests be­fore the Col­man Com­mis­sion of En­quiry, chairs CL World Brands and chaired Burn Stew­art un­til last week's sale of the Scot­tish whiskey com­pa­ny to the South African bev­er­age com­pa­ny, Dis­tell.

Mitchell was ap­point­ed to serve as non-ex­ec­u­tive di­rec­tor of Burn Stew­art on No­vem­ber 23, 2009, un­der the PNM, and he was pro­mot­ed to chair­man of the board in No­vem­ber 2010 un­der the Peo­ple's Part­ner­ship. He al­so be­came chair­man of CL World Brands in No­vem­ber 2010.

Mitchell leads five oth­er QCs and 11 at­tor­neys at the 33 Chancery Lane cham­bers in Lon­don. Quot­ing from The Cham­bers Di­rec­to­ry, his law firm's web­site de­scribes Mitchell as the "king of POCA," which is the Pro­ceeds of Crime Act, and "the god­fa­ther of the area." POCA is the law in the UK which pro­vides for the con­fis­ca­tion or civ­il re­cov­ery of the pro­ceeds from crime.

Sit­ting on the CL World Brands board as non-ex­ec­u­tive di­rec­tors are four Trinida­di­an rep­re­sen­ta­tives: Ger­ry Yet­ming and Mar­lon Hold­er, who were both ap­point­ed on No­vem­ber 25, 2011 and Robert Ram­c­hand and Joseph Teix­eira, who were ap­point­ed on Au­gust 1, 2012, ac­cord­ing to the CL World Brands 2011 fi­nan­cial re­port, which was filed with the UK au­thor­i­ties in De­cem­ber 2012.

Ques­tions:

�2 Who in the Gov­ern­ment rec­om­mend­ed and who ap­proved the rec­om­men­da­tion of the ap­point­ment of Lawrence Duprey's at­tor­ney as the chair­man of CL World Brands and Burn Stew­art Dis­tillers, two Scot­land-based com­pa­nies that are un­der the di­rect con­trol of the Gov­ern­ment un­til the ex­pi­ra­tion of the share­hold­ers' agree­ment? Clear­ly, Mr Mitchell did not ap­point him­self.

�2 Did Mr Dook­er­an, who was Min­is­ter of Fi­nance at the time, ap­prove this ap­point­ment? Was it the sub­ject of a Cab­i­net Note, du­ly pre­sent­ed, dis­cussed and ap­proved?

�2 Does the No­vem­ber 3, 2010 ap­point­ment of Mr Duprey's at­tor­ney as the chair­man of two Eu­ro­pean drinks com­pa­nies–owned by CL Fi­nan­cial and un­der the con­trol of the Gov­ern­ment–sig­nal that the re­la­tion­ship be­tween Mr Duprey and this Gov­ern­ment is not as ad­ver­sar­i­al as out­ward ap­pear­ances might sug­gest?

�2If the an­swer to the above ques­tion is yes, what does that mean for the out­come of the Com­mis­sion of En­quiry, the Cen­tral Bank's civ­il case against Duprey and oth­ers and the in­ves­ti­ga­tion by the DPP?

�2 Does Mr Mitchell's ap­point­ment as chair­man of CL World Brands con­form with the spir­it of the June 2009 share­hold­ers' agree­ment that Gov­ern­ment-ap­point­ed di­rec­tors should be in con­trol of all CL Fi­nan­cial sub­sidiaries to en­sure that tax­pay­ers re­cov­er the $24 bil­lion that has been spent bail­ing out the con­glom­er­ate?

�2 Are there any oth­er CL Fi­nan­cial sub­sidiaries in which a rep­re­sen­ta­tive of the group's share­hold­ers serves as chair­man?

�2 Is there a con­flict of in­ter­est in Mr Mitchell serv­ing as the chair­man of CL World Brands and Burn Stew­art?

On Mon­day, by e-mail, I in­quired of Mr Mitchell if he rep­re­sent­ed the in­ter­ests of CL Fi­nan­cial share­hold­ers on the boards of CL World Brands and Burn Stew­art. His re­sponse was: "I rep­re­sent­ed the in­ter­ests of all stake­hold­ers on those boards."

In a fol­low-up ques­tion, I asked Mr Mitchell whether he con­sid­ered that it was a con­flict of in­ter­est to serve as chair­man of CL World Brands, while rep­re­sent­ing Mr Duprey be­fore the Col­man Com­mis­sion of En­quiry.

In re­sponse, Mr Mitchell wrote: "I find the tone and na­ture of your in­quiry frankly as­ton­ish­ing. The im­pli­ca­tion that I would be­have dif­fer­ent­ly be­cause of a client is as­tound­ing. The role of a di­rec­tor brings with it fidu­cia­ry oblig­a­tion which can­not, for any rea­son, be ig­nored....The sug­ges­tion that some­how be­cause I be­came chair­man of two prof­itable sub­sidiaries there is a taint is ridicu­lous. You should know there are some peo­ple in this world with in­tegri­ty...."

Clear­ly, Mr Mitchell does not think there is a con­flict. He, of course, is en­ti­tled to his opin­ion.

But what do read­ers think?

What does the cur­rent Min­is­ter of Fi­nance think?

Does Mr Yet­ming–who is the chair­man of CL Fi­nan­cial, Cli­co, An­gos­tu­ra and who was ap­point­ed to the CL World Brands board on No­vem­ber 25, 2011–share Mr Mitchell's view that there is no con­flict in his ap­point­ment as chair­man of two CL Fi­nan­cial sub­sidiaries?

Go­ing for­ward, for me the re­al test is the ex­tent to which the tax­pay­ers of this coun­try ben­e­fit from the sale of Burn Stew­art Dis­tillers to South Africa's lead­ing spir­its group, Dis­tell, for US$229 mil­lion net of bank debt of US$38 mil­lion.

There is no doubt that US$191 mil­lion (which is about �124 mil­lion) is a very good price, in light of the fact that Mr Duprey ac­quired Burn Stew­art ten years ago for �49 mil­lion.

CL World Brands is en­ti­tled to US$135.64 mil­lion from the sale of its 71.02 per cent of Burn Stew­art and an ad­di­tion­al US$24.29 mil­lion as a re­sult of its 44 per cent share­hold­ing in An­gos­tu­ra–a to­tal of US$159 mil­lion.

Will CL World Brands de­clare a spe­cial div­i­dend en­sur­ing that the pro­ceeds of the Burn Stew­art sale go back to the Gov­ern­ment to off­set part­ly the bailout?

By the way, there seems to be a dis­par­i­ty in the amount of mon­ey that An­gos­tu­ra said it will re­ceive and my cal­cu­la­tions of the same.

As a 28.91 per cent share­hold­er of Burn Stew­art, I cal­cu­late that An­gos­tu­ra is en­ti­tled to US$55.21 mil­lion from the sale of its shares. At the buy­ing sight rate on April 15, US$55.21 mil­lion amounts to $348.9 mil­lion. But An­gos­tu­ra put out a re­lease last Thurs­day say­ing that it would re­ceive $331 mil­lion in cash flow from the trans­ac­tion.

Has An­gos­tu­ra un­der-re­port­ed what it is due to re­ceive?

In at­tempt­ing to ex­plain the dis­crep­an­cy, an An­gos­tu­ra of­fi­cial on Fri­day in an e-mail said Burn Stew­art owed CL World Brands US$10.2 mil­lion (or �6 mil­lion) di­rect­ly and that this sum should be sub­tract­ed from the US$191 mil­lion, re­sult­ing in US$180.8 mil­lion.

The of­fi­cial said 28.91 per cent of US$180.8 mil­lion is US$52.3 mil­lion (which is equal to $331 mil­lion).