As part of his global ambitions, former executive chairman of CL Financial Lawrence Duprey set up a company called CL World Brands in 2003, shortly after he purchased the Scotch distiller, Burn Stewart.
As far as can be determined by examination of the annual reports of the company, Mr Duprey and Fraser Thornton, the managing director of Burn Stewart Distillers, served as the two CL World Brands directors during 2008.
CL World Brands's 2009 accounts state that Mr Duprey resigned as a director of the company on July 22, 2009, leaving Mr Thornton as the only CL World Brands director who held office at December 31, 2009 and served throughout the year.
Mr Thornton served as the only director of CL World Brands between July 22, 2009 and November 3, 2010, when one Andrew Mitchell and Wayne Yip Choy joined the board, according to CL World Brands's 2009 and 2010 accounts.
The dates of Mr Thornton's apparent service as CL World Brands's sole director are important.
On April 29, 2010–the same day that he signed off on the company's 2008 accounts–a share purchase agreement was signed by CL World Brands for the purchase of six companies owned by Groupe Angostura SA, which is a wholly owned subsidiary of CL Financial. Some 58 per cent of CL World Brands is owned by CL Financial, while the balance is held by Clico.
Under the terms of the agreement, CL World Brands "paid" �19.24 million to Groupe Angostura (Suisse) SA for the share capital of CL World Brands Global Duty Free, E&A Scheer, Angostura SA, S Fassbind, Fassbind Companie Suisse de Distribution et d"exportation and Paragon Vinters Ltd. E&A Scheer was sold for �4 million in July 2010.
The consideration, for what was described in the CL World Brands 2010 accounts as a major non-cash transaction, was satisfied by an inter-company loan.
The consideration was also satisfied by the assignment of third-party debt, with CL World Brands buying out loan values amounting to �9 million, which were previously owing to Groupe Angostura (Suisse) SA. CL World Brands entered into an assignation of debt owed by Groupe Angostura (Suisse) SA to Clico Investment Bank, which was placed in liquidation by the High Court on October 17, 2011, for the amount of �11.55 million.
The transaction took place at a time when not much attention was being paid to CL Financial: Former Prime Minister Patrick Manning dissolved Parliament on April 8 and called the general election on April 16, which means that the Minister of Finance would have been otherwise occupied.
One obvious question is this: Who in the Government in April 2009, provided the prior approval for this transaction?
This question is asked in the context of the fact that the January 30, 2009 Memorandum of Understanding signed by then executive director of CL Financial, Lawrence Duprey, required the company to make "full and fair" disclosure of all CL Financial companies and their assets and liabilities.
The MOU also stopped "any new inter-company transaction, any increases in salaries of directors and senior officers, any payments of dividends, bonuses, share options and any disposal of assets without a schedule provided to the Government for its prior approval."
�2 If Thornton was the only CL World Brands director when he approved the transfer of CL Financial assets to CL World Brands, on whose authority and direction was he acting?
�2 Did the board of CL Financial, which would have been chaired by management consultant Shafeek Sultan-Khan between July 2009 and June 28, 2010 approve the transaction?
Some questions should be asked of the appointment on November 3, 2010, of Andrew Mitchell as the chairman of CL World Brands.
Mitchell is an English QC who is one of three CL Financial directors who represent the interests of the shareholders of the group.
Remember that the June 12, 2009 shareholders' agreement between the Government and CL Financial allowed the Government to appoint four of the seven directors on the CL Financial board with three directors being appointed by the shareholders of the group, who include Lawrence Duprey, the former executive chairman who controls a majority stake.
Mitchell, who represents Duprey's interests before the Colman Commission of Enquiry, chairs CL World Brands and chaired Burn Stewart until last week's sale of the Scottish whiskey company to the South African beverage company, Distell.
Mitchell was appointed to serve as non-executive director of Burn Stewart on November 23, 2009, under the PNM, and he was promoted to chairman of the board in November 2010 under the People's Partnership. He also became chairman of CL World Brands in November 2010.
Mitchell leads five other QCs and 11 attorneys at the 33 Chancery Lane chambers in London. Quoting from The Chambers Directory, his law firm's website describes Mitchell as the "king of POCA," which is the Proceeds of Crime Act, and "the godfather of the area." POCA is the law in the UK which provides for the confiscation or civil recovery of the proceeds from crime.
Sitting on the CL World Brands board as non-executive directors are four Trinidadian representatives: Gerry Yetming and Marlon Holder, who were both appointed on November 25, 2011 and Robert Ramchand and Joseph Teixeira, who were appointed on August 1, 2012, according to the CL World Brands 2011 financial report, which was filed with the UK authorities in December 2012.
�2 Who in the Government recommended and who approved the recommendation of the appointment of Lawrence Duprey's attorney as the chairman of CL World Brands and Burn Stewart Distillers, two Scotland-based companies that are under the direct control of the Government until the expiration of the shareholders' agreement? Clearly, Mr Mitchell did not appoint himself.
�2 Did Mr Dookeran, who was Minister of Finance at the time, approve this appointment? Was it the subject of a Cabinet Note, duly presented, discussed and approved?
�2 Does the November 3, 2010 appointment of Mr Duprey's attorney as the chairman of two European drinks companies–owned by CL Financial and under the control of the Government–signal that the relationship between Mr Duprey and this Government is not as adversarial as outward appearances might suggest?
�2If the answer to the above question is yes, what does that mean for the outcome of the Commission of Enquiry, the Central Bank's civil case against Duprey and others and the investigation by the DPP?
�2 Does Mr Mitchell's appointment as chairman of CL World Brands conform with the spirit of the June 2009 shareholders' agreement that Government-appointed directors should be in control of all CL Financial subsidiaries to ensure that taxpayers recover the $24 billion that has been spent bailing out the conglomerate?
�2 Are there any other CL Financial subsidiaries in which a representative of the group's shareholders serves as chairman?
�2 Is there a conflict of interest in Mr Mitchell serving as the chairman of CL World Brands and Burn Stewart?
On Monday, by e-mail, I inquired of Mr Mitchell if he represented the interests of CL Financial shareholders on the boards of CL World Brands and Burn Stewart. His response was: "I represented the interests of all stakeholders on those boards."
In a follow-up question, I asked Mr Mitchell whether he considered that it was a conflict of interest to serve as chairman of CL World Brands, while representing Mr Duprey before the Colman Commission of Enquiry.
In response, Mr Mitchell wrote: "I find the tone and nature of your inquiry frankly astonishing. The implication that I would behave differently because of a client is astounding. The role of a director brings with it fiduciary obligation which cannot, for any reason, be ignored....The suggestion that somehow because I became chairman of two profitable subsidiaries there is a taint is ridiculous. You should know there are some people in this world with integrity...."
Clearly, Mr Mitchell does not think there is a conflict. He, of course, is entitled to his opinion.
But what do readers think?
What does the current Minister of Finance think?
Does Mr Yetming–who is the chairman of CL Financial, Clico, Angostura and who was appointed to the CL World Brands board on November 25, 2011–share Mr Mitchell's view that there is no conflict in his appointment as chairman of two CL Financial subsidiaries?
Going forward, for me the real test is the extent to which the taxpayers of this country benefit from the sale of Burn Stewart Distillers to South Africa's leading spirits group, Distell, for US$229 million net of bank debt of US$38 million.
There is no doubt that US$191 million (which is about �124 million) is a very good price, in light of the fact that Mr Duprey acquired Burn Stewart ten years ago for �49 million.
CL World Brands is entitled to US$135.64 million from the sale of its 71.02 per cent of Burn Stewart and an additional US$24.29 million as a result of its 44 per cent shareholding in Angostura–a total of US$159 million.
Will CL World Brands declare a special dividend ensuring that the proceeds of the Burn Stewart sale go back to the Government to offset partly the bailout?
By the way, there seems to be a disparity in the amount of money that Angostura said it will receive and my calculations of the same.
As a 28.91 per cent shareholder of Burn Stewart, I calculate that Angostura is entitled to US$55.21 million from the sale of its shares. At the buying sight rate on April 15, US$55.21 million amounts to $348.9 million. But Angostura put out a release last Thursday saying that it would receive $331 million in cash flow from the transaction.
Has Angostura under-reported what it is due to receive?
In attempting to explain the discrepancy, an Angostura official on Friday in an e-mail said Burn Stewart owed CL World Brands US$10.2 million (or �6 million) directly and that this sum should be subtracted from the US$191 million, resulting in US$180.8 million.
The official said 28.91 per cent of US$180.8 million is US$52.3 million (which is equal to $331 million).