(Trinidad Express) Former executive chairman of CL Financial (CLF) and CLICO director Lawrence Duprey has been ordered by the High Court to reimburse more than US$139 million or approximately TT$1 billion ($947 million plus interest) to the companies for facilitating a deal to sell shares in what was then called CLICO Energy to Proman Holdings (Barbados) Ltd in February 2009.
Seventeen per cent of the US$139,416,295 that Duprey was directed to pay is to be held in trust for Colonial Life Insurance Company (Trinidad) Ltd, one of the claimants in the matter.
Making the order on Friday was Justice Devindra Rampersad in the multi-million-dollar claim brought by CL Financial and CLICO.
In October 2021, Justice Rampersad had found that Duprey acted oppressively, unfairly and with prejudices to the companies by selling the shares.
CL Financial and CLICO together owned a majority 51 per cent stake in CLICO Energy, which was sold to Proman Holdings on February 3, 2009 for US$46.5 million.
In his October 2021 ruling the judge did not immediately make an assessment of the money to be paid by Duprey to the companies but instead invited submissions from attorneys representing the various sides to file submissions on the issue.
While Justice Rampersad had ruled against Duprey, the former CL Financial chairman did not appeal the findings of the judge.
In fact, Duprey was not even represented during the trial.
The only parties to challenge the 2021 ruling of Justice Rampersad were Proman Holdings (Barbados) and Process Energy (Trinidad) Ltd (PETL).
That Appeal Court decision is still pending.
Failed to act honestly
Duprey did not file an appeal so this was what cleared the way for the judge to deliver the order yesterday.
In his ruling, Justice Rampersad stated that Duprey had acted without due care and diligence and even failed in his fiduciary duties under the Companies Act, as he failed to act honestly and in good faith with a view to the best interest of the companies.
In the case, CL Financial and CLICO argued that Duprey sold the 84,986,145 shares in CLICO Energy owned by CL Financial and CLICO, just three days after the CL Financial group was bailed out by the Government in January 2009.
Proman renamed CLICO Energy to Process Energy (Trinidad) after it acquired the company in February 2009.
As part of his 87-page ruling, Justice Rampersad ordered Proman Holdings to return the 51 per cent stake held in Process Energy to CL Financial and CLICO.
Proman Holdings was also ordered to pay CLF the dividends it collected from the shares since 2009, plus interest.
On the other hand, CLF was ordered by the judge to reimburse Proman Holdings its purchase price in addition to interest.
At the time the deal was struck, CLF controlled 34 per cent of the shares of Process Energy; CLICO, 17 per cent.
Proman owned the other 49 per cent.
Proman eventually bought out the shares held by both companies, resulting in it controlling the entire company which held a sizeable stake in Methanol Holdings Trinidad Ltd (MHTL), as well as stakes in other profitable energy companies.
The International Court of Arbitration in 2014 had ordered CLICO to sell the remainder of its shares in MHTL to Proman’s subsidiary Consolidated Energy Ltd (CEL) for US$1.175 billion.
In its claim, attorneys for CL Financial and CLICO contended Duprey did not have the authority to sell CLICO’s 17 per cent stake in CLICO Energy, which they claimed was held by CL Financial in trust for CLICO.
In addition, the companies claimed the shares sold were valued at US$130 million, way in excess of the $46 million for which it had been purchased by Proman.
In its defence, however, attorneys for Proman argued that CLICO did not have its stake registered in an attempt to avoid paying stamp duty.
However, in his ruling, Justice Rampersad had stated that the court was convinced the transfer could still be registered and all CLICO needed to do was pay the requisite stamp duty and or penalties.
The judge said he was of the view Proman was aware of a sub-committee for the disposal of assets of the CL Financial companies and “the renewed requirements for shareholder resolutions thereby curtailing Duprey’s prior ostensible authority and also failed to make any enquiry whatsoever on the evidence before this court as to whether or not he was authorised to enter into this share purchase agreement in the very unusual circumstances that prevailed at the time”.
Justice Rampersad said with the “business-savvy persons” who were involved in the transaction, “the point of this sale at this time with such haste seemed to have been designed to ensure that Proman got it at the price that it wanted rather than at a fair market value ascertained in an arms-length transaction between two equal parties.
“The fact that Duprey did not even utter a squeak in opposition is testament to the fact that he was working with Proman to do just that,” the judge stated.
Although he noted that Proman officials were wrong to go ahead with the purchase of the company from Duprey, Rampersad ruled that their conduct did not constitute fraud.
Justice Rampersad invited the parties to present additional submissions on whether Duprey, who was unrepresented in the lawsuit, should pay damages for his conduct.
CLF and CLICO were represented by senior counsel Fyard Hosein, Deborah Peake, SC, Kerwyn Garcia, SC, Sasha Bridgemohansingh and Luanne Boyack.
Proman Holdings and PETL were represented by Christopher Hamel-Smith, SC, Jonathan Walker, David Hamel-Smith and Catherine Ramnarine.
