(Trinidad Guardian) While the Government was given the green light to appoint joint provisional liquidators to preserve the assets of CL Financial (CLF) as its seeks to recover a $15 billion debt, it recently discovered that substantial profits from one of CLF’s subsidiaries—Angostura Ltd—had been transferred to a foreign company, creating a pool of funds outside of T&T.
This was revealed on Thursday by Prime Minister Dr Keith Rowley at a press conference at the Diplomatic Centre, St Ann’s, as he spoke on the CLF debacle, which is now before the court.
On Tuesday, the State was given the all clear by the court to appoint joint provisional liquidators to preserve the assets of CLF while it sought to recover the debt following its bailout of the conglomerate in 2009.
On Thursday, the PM said the Government had bailed out CLICO and CLF-related companies to the tune of more than $23 billion, but to date just about $7.5 billion had been repaid.
In the last week, Rowley said the Government had been silent on the issue due to the fact that it was in the courts.
Giving the recent history of the Angostura matter, Rowley said upon assuming office his Government started to inquire about CLF although they were told the matter had been settled.
“Because we knew that one of those companies, Angostura, was a profitable company and it must have been earning substantial sums of money. Somewhere along the line, this Government started to ask what was happening to the Angostura earnings?”
Up to a week ago, Rowley said Angostura’s records showed only one payment was made to the Government as a repayment for the debt owed in the bailout arrangements. This, Rowley said, he was advised by Finance Minister Colm Imbert was $500 million. But this was all they had on Angostura’s activity.
“There was great difficulty in getting information (about CLF’s financial position) for months. There are no audited financial statements of these companies. So we couldn’t go to the financial statements and find out.”
When the Government eventually got the information, Rowley said what they received was very alarming.
“The gist of it is that Angostura, a company that was making hundreds of millions of dollars in profit…the Government was asking where those profits going because we had an interest in repaying the taxpayer money. We found out in recent weeks that the Angostura profit was going to a company in Scotland called CL World Brands, purportedly owned 100 per cent by shareholders who were bailed out by the Government.”
Having examined the facts, Rowley said they realised the shareholders did not in fact own 100 per cent of the company.
“In fact, 60 per cent of it was owned by other entities. Yet the profits were going abroad and creating a pool of funds for persons outside.”
The PM said the Government was so alarmed with this development that they took steps to take action against persons.
“One particular person was responsible for facilitating this. And we set about to ensure that there is rectification so the Angostura profits, which I think 60 per cent, belong to CIB and Clico.”
The remaining 40 per cent, Rowley said was due to the Scottish company.
He said they also gained money from the sale of a methanol plant, which went to court after its minority shareholder Proman sued over its sale because it was being done outside of the arrangements of the company’s by-laws.
“And the minority shareholder took the Government to arbitration over the Government’s intention to sell that plant without giving the minority shareholder its rights of first refusal. The Government fought that matter and lost it and the arbitrator instructed that one of the methanol plants be sold. That sale took place and the proceeds came to the Government…about $7.5 billion.”
The PM said that was the only money the state had collected.
“So it is wrong to say that the Government has been raiding these companies and using them for budget support.”
So far, Rowley said of a debt of approximately $23 billion debt, only $7.5 billion was repaid.
“So there was $15 billion unattended for years.”
Following Government’s prying, however, Rowley said the shareholders took the position that the Government must get off the board and subsequently refused to negotiate and sign a new shareholders’ agreement.