Asha Javeed

Lawrence Duprey dreamed of es­tab­lish­ing a rum em­pire. And, ac­cord­ing to for­mer group fi­nan­cial di­rec­tor Michael Car­ballo, he would let noth­ing stop him. Rum, he of­ten told Car­ballo, was a sleep­ing gi­ant which he felt he could awake, said Car­ballo, in tes­ti­mo­ny at the Com­mis­sion of En­quiry in­to the col­lapse of CL Fi­nan­cial and Cli­co, which re­sumed yes­ter­day. "When Lawrence trav­els to all these coun­tries, he's not sleep­ing at night. Late at night. All 3'o clock in the morn­ing, just dream­ing up these vi­sions of these num­ber one spir­its mar­ket," he told the Com­mis­sion of En­quiry yes­ter­day. "The con­sump­tion of rum was lim­it­ed. The con­sump­tion of scotch was high. And he want­ed rum. He saw rum grow­ing to a lev­el and he want­ed to be the num­ber one man in it," he said.

Duprey's vi­sion led to risky in­vest­ments, which streched the CL Fi­nan­cial em­pire with its de­mands for loans and liq­uid­i­ty. Be­ing the "last man stand­ing" Car­ballo said it was in sup­port of this "spir­its" pil­lar to com­ple­ment CL Fi­nan­cial's oth­er three-re­al es­tate, fi­nan­cial sec­tor and en­er­gy, that led to a se­ries of poor de­ci­sions which in­clud­ed-high un­se­cured, in­tra-com­pa­ny loans, a lever­ag­ing of An­gos­tu­ra be­yond its ca­pac­i­ty and to CLF be­ing bled by Duprey's spir­its com­mer­i­cal ad­vi­sor Arneaud Tra­buc.

Car­ballo out­lined a se­ries of bad in­vest­ments-

Burn Stew­art Dis­tillers which at­tract­ed Duprey be­cause he want­ed to add a scotch to his spir­its port­fo­lio but which didn't turn a prof­it af­ter five years;

The short­lived ac­qui­si­tion of 'big fish' Belvedere, a French vod­ka com­pa­ny, in which the com­pa­ny lost about $200-300 mil­lion. Car­ballo ex­plained that Duprey had been out­smart­ed af­ter CL Fi­nan­cial had ac­quired a 68 per cent of the com­pa­ny be­cause they were not able to par­tic­i­pate in man­age­ment;

The set­ting up of a of­fice in Hong Kong in which three ex­ec­u­tives were sta­tioned but did not re­turn any mon­ey to the com­pa­ny and had to sub­se­quent­ly be shut down.

Car­ballo said the fail­ings arose from a lack of due dili­gence on the com­pa­nies be­ing pur­sued, the use of Cli­co's cash to sup­port Duprey's ven­tures and loose gov­er­nance stan­dards. He said CLF's debt to Cli­co was $3 bil­lion, which was an un­com­fort­able sit­u­a­tion of a par­ent com­pa­ny own­ing a sub­sidiary.