(Trinidad Guardian) Majority CL Financial shareholders intend to add two more of their directors to the CLF Board at a special July 26 meeting and they’re prepared to take legal action against Government if it tries to block the meeting, says Carlton Reis.
This, following Government’s refusal to accede to the shareholders’ June 2 request to remove its directors from CLF’s Board.
Reis is a representative of Dalco and CLF significant shareholder Lawrence Duprey. Reis is also part of United Shareholders Ltd (USL) which is dealing with Government on the Clico/CLF issue. The shareholders represent 63 per cent of company share capital.
Reis detailed majority shareholders’ latest push in their bid to regain control of CLF companies as he responded on Prime Minister Keith Rowley’s concerns about the Clico/CLF issue last Friday.
After a Caricom summit, Rowley reportedly listed several issues including Government’s objections to handing back CLF companies to parties who felt they’re “entitled to it” and payments owed by T&T to regional stakeholders concerning Government’s 2009 bailout of collapsed insurance giant Clico.
Former Clico CEO, Cladius Dacon, also took issue with Rowley’s comments.
Dacon said, “The shareholders still own the company. Is the PM saying the company has been nationalised as this is the logical conclusion if they argue the majority of shareholders don’t now own the company? “
“He can object all he likes but the shareholders’ rights are protected by T&T’s laws — or is the Prime Minister taking advice on T&T affairs from Venezuela?”
Majority shareholders’ last year began bidding to regain control of CLF companies when they approached Government to repay the debt owed from the 2009 Clico bailout. In May, Finance Minister Colm Imbert estimated it may be as much as $27 -+billion.
A shareholders’ agreement on the bailout between the Government of 2009 and the CLF parent board allowed Central Bank management control of Clico while Government held majority directorship on CLF’s board.
Government’s four CLF directors are Rolph Balgobin (chairman) Kirby Anthony Hosam, Terrence Bharath and Ingrid Lashley. CLF interests are represented by Albert Tom Yew, Fredrick Gilkes, Trevor Marshall.
But majority shareholders said the conditions necessitating the agreement no longer exist, Clico is solvent and Central Bank should relinquish management control. They submitted a repayment plan to Government last year and didn’t renew the agreement which expired last August.
They said they received no response from Government on the plan. Shareholders — via USL — wrote Government last month requesting removal of Government’s CLF directors and stating intention to hold a special meeting to add more directors.
However, Government queried USL’s status and didn’t remove its directors. With the standoff, majority shareholders are doubling down on action.
Reis added,”Our attorneys replied on USL but we’re no longer focusing on Government’s directors. Instead, we wrote CLF’s Board on June 20 seeking the special annual general meeting to add two more of our directors to the board. The board agreed to have the AGM, July 26,”
“ If Government tries to block the AGM, we’ll take them to court on the basis of oppression. The two additional directors will be myself and USL’s Kirk Carpenter,”
“Once additional directors are appointed, a due diligence study will be done to ascertain exactly how much we owe Government. We’ve always said we want to repay what’s owed— locally and regionally. We have funding. At no time, did we say we don’t want to pay . We tried to settle this since last year,”
“Government hasn’t sat with us to discuss payment. Instead Clico/CLF companies have been treated like state enterprises. But they’re private companies and their shareholders have been ignored and oppressed. We want to settle and get our plans going to stimulate the local/regional economy and create jobs,”
Reis claimed an eighth CLF board director (ex-CEO Marlon Holder) was fired “illegally” last month.
On the PM’s claim of “ parties wanting to renege now by refusing to sign”, Dacon said,
“Failing to renew a renewable contract isn’t ‘reneging.’ It’s the right of either party to the agreement. Successive administrations have reneged on unwritten commitment to bring this to an end within reasonable time.”
“Government’s failure to fulfil even the most basic objective of the agreement – honouring obligations to policyholders – has led to shareholders’ intervention. Not extending the Shareholders Agreement is the right of CLF owners.”
On Rowley’s claim “$24B of taxpayers’ money” was involved in the Clico issue, Dacon said, “Minister Imbert indicated he didn’t know the accurate figure. Is $24b the net amount owed? Is it the amount before acknowledging repayments? Has it been audited?”
“Is the figure based on Section 44 control or does it include discretionary trading in financial instruments? How much is carried in Clico’s books as being owed under the bailout? Why is Central Bank not stating their figure since they control Clico? People have been asking these questions for eight years without proper disclosures from government.”
On Rowley’s view regarding “challenges which weren’t there before”, Dacon added, “There are no new challenges. The PM either didn’t understand them or failed to deal with them,”
“ After eight years of control with no prospect of resolution ,10,000 policyholders are still awaiting payment of benefits there’s been obstruction of any attempt to obtain information by the public or company owners.”
Dacon said, “The ‘quagmire’ the PM claims exists on the issue, is of Government’s making and will continue as long as government retains control. Good governance demands this be ended, but government refuses to discuss this or negotiate,”
On claims Government took steps to bailout Clico,” he added,”This was a bailout until the Dookeran Plan. After, it became an exercise in extracting as much value as possible from the company without repaying taxpayer or policyholder.”
“The only way out of this chaos is, remove the company from Government, arrange for agreement on what’s owed to taxpayers with a plan to repay it and return the company to compliance with laws/regulations from which it’s exempt while under state control.”
