(Trinidad Express) Geoffrey Leid on Friday described his decision to assume the role of CLICO’s corporate secretary as “probably the biggest mistake” of his life.
Leid made the statement on Friday as he took the witness stand for the second successive day at the Commission of Enquiry into the collapse of CL Financial and the Hindu Credit Union (HCU).
In June 2007, Leid assumed the position of CLICO’s corporate secretary following the resignation of Nicole Patrick.
Patrick, who had been CLICO’s corporate secretary for some two years, resigned her position because she was being asked to do transactions she felt were not “right or ethical”, Leid said, in response to a question from attorney Neal Bisnath, the lawyer for CLICO.
Patrick had replaced Gita Sakal as CLICO’s corporate secretary.
Sakal stepped down as corporate secretary of the insurance giant following a “reconfiguration” of the CLICO board.
Leid said he felt his decision to accept the role as CLICO’s corporate secretary was an error in judgment while being cross-examined by Bisnath.
Leid: I was approached to temporarily—probably the biggest mistake of my life—but to temporarily fill in for the corporate secretary until a suitable person was found.
Bisnath: The point I am getting at is that Miss Patrick left, from your understanding, for ethical reasons?
Bisnath: In that she was being asked to do certain things and she did not think that it would be right or ethical to do?
Bisnath: Is that correct?
Leid: Yes, but she never shared…
Bisnath: I am not asking you any details, but that is what…?
Leid: She told me? Yes.
Bisnath: You have no reason to disbelieve that?
Leid: No, not at all.
Leid, who on his first day of testimony on Thursday said the insurance giant did not fail, yesterday described CLICO as a “runaway freight train”.
Leid said the CLICO board, during his tenure as corporate secretary, had tried to correct the deficiencies in the insurance company’s corporate governance, but the process was a work in progress.
Leid: As I say, and continue to say, when you have a runaway freight train, you cannot just simply pull the brakes.
Bisnath: Save and except this was a runaway insurance company?
Bisnath: This didn’t runaway overnight? It was a cool, well-established, prominent insurance company in Trinidad and Tobago, so this runaway position happened after a while?
Leid: That is right, and you will have to bring it gradually to a halt.
Bisnath: That is fine once you recognise the problem, but what would have contributed to that would have been poor board governance?
Bisnath asked Leid if during his tenure as CLICO’s corporate secretary, whether there was an absence of “any proper corporate governance”.
Bisnath: Would you agree from your time there that clearly, there was an absence of any proper corporate governance? Would you accept that?
Leid: No, I would not accept that there was an absence of any corporate governance. No, I would not.
Bisnath: Would you accept that there was not proper corporate governance?
Leid: I would say there was diminished corporate governance.
Bisnath lambasted Leid and the CLICO board for spending taxpayer’s dollars on non-profitable investments.
CLICO received $5 billion in premiums from policyholders in the year before CL Financial approached the State for a billion-dollar bailout.
Leid said he felt CLICO ran into financial difficulties because the time ran out for assets to be transferred to the Statutory Fund, in addition to the fact that the insurance company was unable to withdraw a $4 billion deposit at CLICO Investment Bank.
Leid was scheduled to return to the witness stand from 10 am yesterday for a special Saturday sitting of the enquiry.