An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers

@guardian.co.tt

Share­hold­ers of An­gos­tu­ra Hold­ings Lim­it­ed are be­ing urged to vote against the re-elec­tion of a di­rec­tor, with a draft let­ter to share­hold­ers putting the com­pa­ny’s near­ly $1 bil­lion claim against CL Fi­nan­cial Lim­it­ed at the cen­tre of a cor­po­rate gov­er­nance bat­tle ahead of Wednes­day’s An­nu­al Gen­er­al Meet­ing (AGM).

The di­rec­tor, who is seek­ing re-elec­tion, de­clined to com­ment when con­tact­ed by Guardian Me­dia, say­ing she was do­ing so on the ad­vice of her le­gal coun­sel.

An­gos­tu­ra share­hold­er and mi­nor­i­ty share­hold­er ad­vo­cate Pe­ter Per­me­ll is urg­ing share­hold­ers to re­ject her re­turn to the board.

Guardian Me­dia ob­tained the draft let­ter, which is to be sent to share­hold­ers to­day, ahead of the Au­gust 26 AGM.

The let­ter rec­om­mends that share­hold­ers vote against Res­o­lu­tion No. 4, which con­cerns the di­rec­tor’s re-elec­tion, cit­ing her pro­fes­sion­al links to CL Fi­nan­cial and en­ti­ties con­nect­ed to the group as An­gos­tu­ra fights to re­cov­er ap­prox­i­mate­ly TT$984 mil­lion from CL Fi­nan­cial.

The dis­pute cen­tres on An­gos­tu­ra’s Proof of Debt claim against CLF, which is in liq­ui­da­tion. The claim was re­ject­ed by CLF liq­uida­tor Mark By­ers, and An­gos­tu­ra is chal­leng­ing that de­ci­sion through High Court pro­ceed­ings, Claim No. CV2017-02536.

The draft let­ter de­scribes re­cov­ery of the mon­ey as be­ing of “fun­da­men­tal im­por­tance” to An­gos­tu­ra’s fi­nan­cial po­si­tion, fu­ture and share­hold­ers.

It rais­es par­tic­u­lar con­cern over the di­rec­tor’s nom­i­na­tion to the An­gos­tu­ra board by Rumpro Com­pa­ny Lim­it­ed, which the draft says is ul­ti­mate­ly con­trolled by CL Fi­nan­cial, the en­ti­ty on the op­pos­ing side of An­gos­tu­ra’s claim.

The let­ter ar­gues that de­ci­sions in­volv­ing the lit­i­ga­tion, in­clud­ing set­tle­ment, strat­e­gy, fund­ing and the con­duct of the pro­ceed­ings, could di­rect­ly af­fect the fi­nan­cial in­ter­ests of CL Fi­nan­cial and its liq­uida­tor.

It there­fore de­scribes the di­rec­tor’s po­si­tion as cre­at­ing a “di­rect, on­go­ing, and ir­rec­on­cil­able con­flict of in­ter­est and du­ty”.

Let­ter puts CLF links un­der mi­cro­scope

The draft let­ter traces the con­cerns to the di­rec­tor’s more than 12 years at CL Fi­nan­cial, in­clud­ing her tenure as Cor­po­rate Sec­re­tary.

It al­so high­lights the ap­prox­i­mate­ly two years she spent on sec­ond­ment to An­gos­tu­ra.

At the cen­tre of the dis­pute is a let­ter she signed on June 16, 2016, while serv­ing as CLF’s Cor­po­rate Sec­re­tary.

The let­ter was ad­dressed to then An­gos­tu­ra chief ex­ec­u­tive of­fi­cer Robert Wong and con­cerned CLF’s li­a­bil­i­ty to An­gos­tu­ra.

“In ac­cor­dance with the di­rec­tive pro­vid­ed by the CL Fi­nan­cial Lim­it­ed Board of Di­rec­tors, we here­by con­firm a li­a­bil­i­ty of TT$971,792,538.12,” the let­ter stat­ed.

It added: “The man­age­ment will make arrange­ments with both com­pa­nies to de­vel­op an ap­pro­pri­ate sched­ule for re­pay­ment of this sum.”

The doc­u­ment was signed in her ca­pac­i­ty as Cor­po­rate Sec­re­tary of CLF.

The draft share­hold­er let­ter says the ac­knowl­edg­ment is a cen­tral doc­u­ment in An­gos­tu­ra’s cur­rent Proof of Debt claim.

It said she was sub­se­quent­ly iden­ti­fied as a po­ten­tial key wit­ness be­cause of her in­volve­ment in the events un­der­ly­ing the claim, in­clud­ing her sig­na­ture on the ac­knowl­edg­ment.

The draft said An­gos­tu­ra’s ex­ter­nal coun­sel for­mal­ly re­quest­ed her co­op­er­a­tion and as­sis­tance with a wit­ness state­ment in No­vem­ber and De­cem­ber 2025.

The let­ter claimed the di­rec­tor re­spond­ed in writ­ing that she was un­will­ing to par­tic­i­pate in dis­cus­sions con­cern­ing the mat­ter and has main­tained that po­si­tion.

It de­scribes that re­fusal as part of the for­mal record in the on­go­ing court pro­ceed­ings.

The draft al­so points to her cur­rent po­si­tion in CLI­CO, where CL Fi­nan­cial is the ma­jor­i­ty share­hold­er, along with oth­er di­rec­tor­ships and pro­fes­sion­al po­si­tions con­nect­ed to en­ti­ties linked to the CLF group and its liq­uida­tor.

It ar­gues that her pro­fes­sion­al re­la­tion­ships, com­bined with her nom­i­na­tion to the An­gos­tu­ra board, cre­ate the pos­si­bil­i­ty of di­vid­ed loy­al­ty when the board is re­quired to make de­ci­sions con­cern­ing CL Fi­nan­cial.

The draft in­vokes Sec­tion 99 of the Com­pa­nies Act, Chap. 81:01, which it says im­pos­es statu­to­ry and fidu­cia­ry du­ties re­quir­ing di­rec­tors to act in good faith and in the best in­ter­ests of the com­pa­ny.

The let­ter ar­gues that An­gos­tu­ra’s board must be able to pur­sue the CLF claim in­de­pen­dent­ly and vig­or­ous­ly.

It re­jects dis­clo­sure or in­for­ma­tion bar­ri­ers as a suf­fi­cient so­lu­tion.

“Dis­clo­sure alone, or the erec­tion of in­for­ma­tion bar­ri­ers, can­not cure a struc­tur­al con­flict of this na­ture,” the draft states.

The rec­om­men­da­tion is that share­hold­ers vote against the di­rec­tor’s re-elec­tion.

The draft makes clear that the rec­om­men­da­tion is be­ing framed as a cor­po­rate gov­er­nance is­sue rather than a judg­ment on the di­rec­tor per­son­al­ly.

The let­ter al­so stress­es that re­cov­ery of the mon­ey owed to An­gos­tu­ra is in the in­ter­ests of all share­hold­ers.

The lat­est board­room dis­pute fol­lows a ma­jor change at An­gos­tu­ra ear­li­er this year.

On June 3, the board chaired by at­tor­ney-at-law Ter­rence Bharath and com­pris­ing Dr Ster­ling Frost, Dr Maryam Richards, Ger­ard Coop­er, Tri­cia Coos­al and Fran­ka Costel­loe re­signed.

Chair­man Gary Hunt and board mem­bers Pa­tri­cia Dindyal, Shiv­al Ma­haraj, Rox­ane De Fre­itas and Jen­nifer Fred­er­ick were of­fi­cial­ly elect­ed dur­ing a spe­cial meet­ing with share­hold­ers last Ju­ly.

Share­hold­ing bat­tle adds an­oth­er lay­er

The share­hold­ing fig­ures have be­come an im­por­tant part of the dis­pute.

Per­me­ll puts CL Fi­nan­cial’s ul­ti­mate in­ter­est through Rumpro at ap­prox­i­mate­ly 44.97 per cent, while the Na­tion­al In­vest­ment Fund Hold­ing Com­pa­ny Lim­it­ed owns ap­prox­i­mate­ly 29.97 per cent.

To­geth­er, those two in­ter­ests ac­count for al­most 75 per cent of An­gos­tu­ra’s is­sued shares.

The di­rec­tor has pre­vi­ous­ly re­ferred to CL Fi­nan­cial’s in­ter­est as 47.5 per cent.

The dif­fer­ent fig­ures cit­ed by the par­ties re­flect dif­fer­ent de­scrip­tions of the in­ter­ests in­volved, but both point to the same un­der­ly­ing re­al­i­ty: a sub­stan­tial por­tion of An­gos­tu­ra’s shares is con­cen­trat­ed among two ma­jor share­hold­ers.

That makes the par­tic­i­pa­tion of mi­nor­i­ty share­hold­ers po­ten­tial­ly de­ci­sive in Wednes­day’s vote.

Per­me­ll said the Na­tion­al In­vest­ment Fund’s 29.97 per cent, com­bined with at least 21 per cent from mi­nor­i­ty share­hold­ers, would be need­ed to en­sure the rec­om­men­da­tion against the di­rec­tor pass­es.

The is­sue has there­fore moved be­yond a ques­tion of one di­rec­tor’s con­tin­ued tenure and in­to a broad­er con­test over the di­rec­tion of the com­pa­ny and its pur­suit of the CLF debt claim.

Per­me­ll urges mi­nor­i­ty share­hold­ers to vote

Per­me­ll stressed that he would have pre­ferred the dis­pute in­volv­ing the di­rec­tor to have been re­solved in­ter­nal­ly rather than be­com­ing pub­lic.

But af­ter re­view­ing the di­rec­tors’ cir­cu­lar, he said he be­lieves the rec­om­men­da­tion to vote against the di­rec­tor is “not on­ly ap­pro­pri­ate but nec­es­sary in the cir­cum­stances”.

Per­me­ll said if the al­le­ga­tions con­tained in the cir­cu­lar are ac­cu­rate, the di­rec­tor should have re­signed last year.

He be­lieves she still has the op­tion of with­draw­ing her nom­i­na­tion be­fore Wednes­day’s meet­ing.

But if she re­mains in the race, Per­me­ll is urg­ing share­hold­ers to re­ject her re-elec­tion.

For him, the most trou­bling is­sue is the di­rec­tor’s in­volve­ment in the 2016 debt ac­knowl­edg­ment and her sub­se­quent re­fusal to pro­vide a wit­ness state­ment in the cur­rent pro­ceed­ings.

He said the fact that she was iden­ti­fied as a po­ten­tial key wit­ness is par­tic­u­lar­ly sig­nif­i­cant be­cause of her di­rect in­volve­ment in the events un­der­ly­ing the claim.

Per­me­ll al­so point­ed to the fi­nan­cial im­pli­ca­tions for share­hold­ers.

He es­ti­mates that if An­gos­tu­ra suc­cess­ful­ly re­cov­ers the debt, it could rep­re­sent ap­prox­i­mate­ly $8.20 in ad­di­tion­al earn­ings per share.

He said the share­hold­ing struc­ture makes the vote even more im­por­tant.

Rumpro, which Per­me­ll iden­ti­fies as ul­ti­mate­ly con­trolled by CL Fi­nan­cial, owns ap­prox­i­mate­ly 44.97 per cent of An­gos­tu­ra, while NIF holds ap­prox­i­mate­ly 29.97 per cent.

To­geth­er, the two largest share­hold­ers there­fore con­trol al­most three-quar­ters of the com­pa­ny’s is­sued shares.

Per­me­ll be­lieves that makes mi­nor­i­ty share­hold­er par­tic­i­pa­tion crit­i­cal.

He said NIF’s 29.97 per cent, com­bined with at least 21 per cent from mi­nor­i­ty share­hold­ers, would be need­ed to en­sure the rec­om­men­da­tion against the di­rec­tor pass­es.

He is there­fore call­ing on mi­nor­i­ty share­hold­ers who op­pose her re­turn to use their proxy votes.

Per­me­ll urged share­hold­ers to com­plete the proxy form, se­lect “Against” for Res­o­lu­tion No. 4 and sub­mit it to An­gos­tu­ra be­fore the stat­ed dead­line.

He in­di­cat­ed that the ob­jec­tive is to en­sure that share­hold­ers who can­not phys­i­cal­ly at­tend the AGM still have their votes count­ed.

“This is a call to ac­tion, not a time for com­pla­cen­cy,” Per­me­ll said.

The dis­pute will now be placed di­rect­ly be­fore share­hold­ers, with the out­come po­ten­tial­ly shap­ing both the com­po­si­tion of An­gos­tu­ra’s board and the com­pa­ny’s fight to re­cov­er near­ly $1 bil­lion from CL Fi­nan­cial.

The di­rec­tor de­clined to com­ment when con­tact­ed by Guardian Me­dia, based on the ad­vice of her le­gal coun­sel.

An­gos­tu­ra did not re­spond to re­quests for com­ment.