Duprey to benefit financially from CLICO deal

(Trinidad Guardian) Former CL Financial (CLF) executive chairman Lawrence Duprey will benefit financially if the Cabinet accepts the proposal by the Ministry of Finance to resolve the group’s bailout. Although Duprey is likely to be barred from serving in any official capacity in the CLF group in future, he will play a major role in the company by virtue of his ownership stake in it.

Under the proposal that Cabinet has been considering since July 11, the shareholders of CL Financial get to retain assets with a value estimated at $1.6 billion, with the Government recovering an estimated $15.1 billion from the sale of CLF assets and third-party creditors being settled to the tune of $16.3 billion.

Using median valuations for the companies in the group, the proposal would leave CLF owing the Government an estimated $3.3 billion. The Government’s agreed claim of $18.3 billion, however, is $8.3 billion short of the State’s $23.3 billion original claim submitted to CLF.

Duprey’s would derive benefits from a considerable percentage of the $1.6 billion in assets—comprising 51 per cent of Angostura, 51 per cent of Home Construction and 100 per cent of CL Marine—by virtue of him being the largest single shareholder of CL Financial. Checks yesterday at the Companies Registry revealed that in CLF’s latest annual report filing on September 10, 2012, Duprey was listed as owning:
• some 1,947,833 CLF shares comprising 25.97 per cent of the company’s issued share capital through DALCO Capital Management, whose registered office is 37 Frederick Street, Port-of-Spain
• exactly 337,269 CLF shares, equal to 4.49 per cent of the company through his ownership of First Capital Ltd, a company he bought from former CLF executive Andre Monteil
• 14.5 per cent of the shares of CL Duprey Investment Trust, which owns 1,634,335 CLF shares, in his own name and through DALCO Capital Management. The CL Duprey Investment Trust, which was established by Clico’s co-founder Cyril Duprey, owns 21.79 per cent of CLF.

The directors of the CL Duprey Investment Trust are chartered accountant Roger Duprey, attorney Leslie De Nobriga, attorney Terrence Inniss, businessman Arnold Duprey and Lawrence Duprey. CLF’s issued share capital comprises 7.5 million $1 shares. The company has a total of 325 shareholders, including Planning Minister Bhoe Tewarie, who owns 1,171 shares, and Mervyn Assam, who is Ambassador Extraordinary and Plenipotentiary with Responsibility for Trade and Industry. Assam owns 7,500 shares.

Apart from DALCO Capital Management and the CL Duprey Investment Trust, the third main CLF shareholder is the employees pension plan of the British American Insurance Company, which owns 1,066,312 CLF shares equal to 14.21 per cent of the group. The pension plan is under judicial management.

Asked if there was any discussion of the CLF resolution of the issue at yesterday’s Cabinet meeting, Minister of Communication Jamal Mohammed said: “The Minister of Finance has to go before the Cabinet with a proper presentation on the future of the CL Financial matter. But it was discussed for a few minutes.”

Asked whether he was saying that the minister had not made a proper presentation to Cabinet, Mohammed said: “Yes, he has, but further decisions have to be made and he will make a proper presentation to Cabinet.”

Sources close to Cabinet revealed that the resolution proposal, which was tabled by Finance Minister Larry Howai, has faced stiff opposition, with several ministers questioning the rationale behind the CLF proposal that it suffered a loss as a result of the manner in which the group’s Republic Bank shares were sold.

In a Letter of Intent, dated July 4 and signed by CLF managing director Marlon Holder, CLF said that it proposes: “Subject to the determination of the merits of its claim, any such loss be treated as a credit for the benefit of CLF in the discharge of the Government debt.” This proposal has the potential to diminish or eliminate the debt to Government, which the July 9 Cabinet Note estimated could total $3.3 billion, based on median valuations, according to sources.

The sources also questioned why would CLF wish to dispute Clico’s beneficial ownership of several of the assets that are due to be sold to repay the Government’s bailout. The Letter of Intent states: “CLF may wish to pursue this dispute in the course of the divestment of the assets and shall advise Government of its proposed action in this regard.”

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