Nadaleen Singh

The Cli­co and CL Fi­nan­cial de­ba­cle should not have oc­curred, says Robert May­ers, chair­man of KS­BM As­set Man­age­ment Ltd. KS­BM ex­e­cutes re­pur­chase agree­ments in both TT$ and US$ and pro­vides in­vest­ment man­age­ment ser­vices to pen­sion plans and in­di­vid­u­als. May­ers is for­mer man­ag­ing di­rec­tor and a found­ing mem­ber of CL Fi­nan­cial sub­sidiary Caribbean Mon­ey Mar­ket Bro­kers (CMMB). In an in­ter­view with Busi­ness Guardian on Mon­day at KS­BM's Sweet Bri­ar Road, St Clair of­fice, May­ers said Cli­co could have been re-mod­elled to pre­vent any col­lapse. Re­fer­ring to the de­ci­sions tak­en by Lawrence Duprey, ex­ec­u­tive chair­man of CL Fi­nan­cial and chair­man of Cli­co, to ac­quire com­pa­nies, May­ers said those were not pru­dent as the prac­tice was to bor­row mon­ey to pur­chase com­pa­nies. "You bor­row mon­ey from Bar­clays to buy Bar­clays shares, you bor­row mon­ey to pur­chase Methanol Hold­ings (Trinidad) Ltd. At some point, you have got to pause; let the in­vest­ment work for you. Even if they are pay­ing bet­ter cash flows than your oblig­a­tions, it means that you can build a re­source pool, rather than say, this is pay­ing me more than I am pay­ing for it, so I will just go and buy some­thing else.

"In my own view, it didn't have to end this way." Asked what should have been done to pre­vent the de­ba­cle, May­ers said the CL Fi­nan­cial could have down­sized. "It would not have been the size that it was when it col­lapsed, ei­ther way, you would have had a sol­id con­glom­er­ate go­ing for­ward." May­ers dis­miss­es crit­ics who say that Cli­co in­vestors should have known bet­ter. Their ar­gu­ment, he said, is not sol­id be­cause the Cen­tral Bank was re­spon­si­ble for is­su­ing the li­cense for Cli­co to op­er­ate. May­ers, one of Cli­co's stock­bro­kers who was in­volved in the ac­qui­si­tion of such com­pa­nies as: Re­pub­lic Bank Ltd (RBL), Home Con­struc­tion Ltd (HCL) and Val­park Shop­ping Plaza Ltd, said the RBL ac­qui­si­tion stood out for him. "The Re­pub­lic one I en­joyed the most be­cause that one was done on com­plete ig­no­rance on the part of the ex­ec­u­tives of RBL. In the case of Val­park, in the case of HCL, we ac­tu­al­ly met with the boards of those com­pa­nies and in­di­cat­ed that we want­ed to ac­quire. "This was the largest in­sur­ance com­pa­ny in the coun­try ac­quir­ing the largest com­mer­cial bank in the coun­try and it was un­be­knownst to all of the se­nior ex­ec­u­tives of RBL.

"They didn't know un­til it hit them. The world was a dif­fer­ent place then, com­mu­ni­ca­tions tech­nol­o­gy and all of that. A lot of things now can­not be kept se­cret be­cause of com­mu­ni­ca­tions tech­nol­o­gy." One Wood­brook Place-the triple-tow­ered, bil­lion-dol­lar CL Fi­nan­cial/HCL project-was an in­vest­ment that should not have hap­pened. "I am just a lit­tle both­ered as to how it got to where it got to. I think the killer was One Wood­brook Place. I think that took every­thing out of them and put them in a se­ri­ous hole but, at the time, all of those com­pa­nies were prof­itable. "HCL went off the deep end with the project. It was a huge project re­quir­ing a hell of a lot of re­sources, which they didn't have. Then again that hap­pens when one has vi­sions of em­pire. "In a way, they can ar­gue when they went in­to methanol, that al­so re­quired a huge amount of re­sources." Asked if he sup­port­ed the Com­mis­sion of En­quiry in­to Cli­co and the Hin­du Cred­it Union, May­ers said there is no ob­jec­tive be­hind a en­quiry if the wrong­do­ers are not held cul­pa­ble for their ac­tions.

"It is al­most like a soap opera where you are dress­ing up every­day to look nice on tele­vi­sion. I can't see any ben­e­fit, quite frankly. "If there is wrong­do­ing, then peo­ple must be pros­e­cut­ed. I have no prob­lem with that." May­ers said the Cli­co sce­nario should not be com­pared with Bernard Mad­off's Ponzi scheme as you couldn't find the Mad­off's as­sets, but you can find Cli­co's. "If you are guilty of fraud and de­fraud­ing the pol­i­cy­hold­ers, your prop­er place is in jail. "I think what brought every­thing ahead in Jan­u­ary 2009 had to do with Duprey's world view and the fact that, in the face of a glob­al eco­nom­ic melt­down, he didn't think it would af­fect him be­cause in Sep­tem­ber 2008, he pro­ceed­ed to buy out the 45 per cent of CMMB. Why would any­body be look­ing to ac­quire when every­body was look­ing to con­sol­i­date and to shed?

"When I look at the be­hav­iour pat­terns, I have to con­clude he felt that he was above the glob­al sit­u­a­tion."

Trinidad Ce­ment Ltd

May­ers does not be­lieve the TCL strike-to­day makes it 67 days work­ers are on the pick­et line-is a hin­drance to mov­ing the T&T econ­o­my. He said TCL should not be al­lowed to trade on the T&T Stock Ex­change since it is hav­ing prob­lems pay­ing cred­i­tors. "I have some prob­lems that a pub­licly-list­ed com­pa­ny that tells me through a pub­lic an­nounce­ment that I have stopped pay­ing my cred­i­tors and the stock ex­change does not im­me­di­ate­ly sus­pend trad­ing in that share." He con­tends if you are not pay­ing your cred­i­tors, what is the val­ue of con­tin­u­ing to trade. "Shares are trad­ing, who is de­ter­min­ing the val­ue? Why is TCL still be­ing al­lowed to trade on the stock ex­change? This has noth­ing to do with the strike; this has to do with the fi­nan­cial con­di­tion of TCL. "To tell me that your cred­i­tors have come to some agree­ment is not help­ing me."

PURE and the T&T econ­o­my

Com­ment­ing on the first quar­ter of 2012, May­ers said he has seen no signs of growth in the econ­o­my. How­ev­er, he sees hope through the re­sump­tion of projects un­der­tak­en by the Pro­gramme for Up­grad­ing Road Ef­fi­cien­cy (PURE).

"T&T should not be wor­ried about the un­em­ploy­ment fig­ure at 5.2 per cent." Last week, the labour force bul­letin re­leased by the Cen­tral Sta­tis­ti­cal Of­fice showed un­em­ploy­ment rate de­creased from 5.8 per cent in the sec­ond quar­ter of 2011 to 5.2 per cent in the third quar­ter of 2011, a de­crease of 0.6 per­cent­age points. May­ers said T&T should con­cen­trate on grow­ing the econ­o­my to keep peo­ple em­ployed. "In­fla­tion, in my view, is not a ma­jor con­cern; it al­ways has to be on the radar. The Gov­ern­ment's con­cern should be, apart from crime-which is al­ways the num­ber one is­sue-gen­er­at­ing eco­nom­ic ac­tiv­i­ty. This is not hap­pen­ing. Re­gard­ing the award of con­tracts, May­ers said the price of the project should not on­ly be looked at, but al­so the qual­i­ty of work de­liv­ered. "It has to be a sit­u­a­tion where my peo­ple get­ting the work be­cause I'm (the Gov­ern­ment) spend­ing the mon­ey and it is tax­pay­ers' mon­ey I am spend­ing. Cost, while it has to be a con­sid­er­a­tion, can­not be the on­ly and ma­jor con­sid­er­a­tion."