(Trinidad Express) – Government was expected to put its demands in writing for a greater say in the management control of the troubled CL Financial Group on the table yesterday.
CL Financial executive chairman Lawrence Duprey is expected to meet Finance Minister Karen Nunez-Tesheira and top Central Bank officials, including Governor Ewart Williams, in a second round of talks in as many weeks, to hammer out a private agreement that would give the government more say in how the financially-troubled conglomerate is run, according to sources.
The first meeting was held on April 22 between top government and Central Bank officials and Duprey; the state demanded that Duprey relinquish control of key assets in the privately-owned CL Financial Group.
If the state gets its way, Duprey may be forced to give up the chairmanship of not only the Angostura Holdings and Home Construction Ltd boards but the executive chair of his CL Financial Group, according to sources, who said that the demand for a greater say in the affairs of the country’s largest conglomerate was fuelled in large part by the growing size of the statutory fund deficit in CLICO, which early estimates had put at $10 billion. Subsequent investigations, according to sources, suggest a substantially higher figure.
Sources say the Manning administration is reluctant to put more taxpayers’ money into the financially-troubled conglomerate without a tighter rein on its executive chairman, who provoked a firestorm of criticism and Central Bank-led court action on February 22 after he quietly sold off the group’s 51 per cent interest in Clico Energy Co Ltd to his long-time German partner, Proman AG.
Finance Minister Nunez-Tesheira is said to have asked Duprey to reverse the February 3 transaction, signed mere days after the company received a taxpayer bailout, and which state officials believe vastly undervalued the group’s 51 per cent interest in Clico Energy. Duprey sold the asset for US$46.5 million and has since spent almost all of the proceeds of the sale, paid out to CL Financial for its 34 per cent share interest, on operating expenses for the parent company.
Central Bank, which seized control of insurance giant CLICO and other distressed assets in the CL Financial Group under Section 44D of the Central Bank Act, is said to have placed the proceeds of the sale for CLICO’s 17 per cent interest in Clico Energy in an escrow account, pending a resolution on the issue.
Insiders report a Duprey position that the February 3 transaction was a done deal, notwithstanding Central Bank’s view it breached the January 30 Memorandum of Understanding signed between the finance minister and CL Financial’s top boss.
