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GHL: No conflict of interest in actuary’s Clico assignment

Sunday, June 15, 2014

Guardian Holdings Ltd (GHL) said on Friday that an issue of a conflict of interest “does not arise” with regard to the retention of its former group actuary/chief performance officer, Neil Dingwall, by the Central Bank as a special advisor on the restructuring of Clico. Questions about Dingwall’s potential conflict of interest were posed to GHL, the Westmoorings-based regional financial services company, on Friday following two statements on the English native’s role at the two local insurance companies.


In a shareholder notice dated June 6, GHL said as follows: “Guardian Holdings Ltd wishes to announce that Mr Neil Dingwall has left direct employment of the Guardian Group and as a result is no longer a member of the senior management team with effect from May 31, 2014. “Mr Dingwall has been retained as a consultant to the Guardian Group.” That statement was posted on the T&T Stock Exchange’s website last week Friday.


Last week Friday, June 6, in a statement issued to the Stock Exchange, GHL announced that Dingwall, had “left direct employment” with the financial services group effective May 31, but had been “retained as a consultant.” On Tuesday last week, the Central Bank issued a statement, which was signed by its Governor Jwala Rambarran, that it had retained Dingwall as a special advisor “to advise the Bank of the restructuring strategy for Clico.” As outlined in the Central Bank statement, Dingwall’s functions include:
• Advise the Central Bank on the review and development of Clico’s operational plan for implementing Clico’s restructuring;
• Advise the Central Bank on the preparations for the offering and sale process for Clico’s traditional portfolio including the selection of appropriate matching assets and splitting of the liability portfolio;
• Advise the Central Bank on streamlining the operations of Clico including the cessation of new business.


The Code of Professional Conduct of the Caribbean Acturial Association (CAA) states: “A member shall not perform professional services involving an actual or potential conflict of interest, unless the member's ability to act fairly is unimpaired and there has been full disclosure of the actual or potential conflict.” Dingwall is the immediate past president of the CAA.


On Thursday night, CAA’s current president, Lisa Wade of Eckler Ltd in Barbados, was asked by e-mail whether Dingwall can be retained as a consultant by GHL and, at the same time, serve as a special advisor to the Central Bank on the restructuring strategy for Clico, especially as the Westmoorings-based group has expressed an interest in acquiring Clico. She said by telephone on Friday that she would enquire into the matter and respond by this week.


A prominent regional actuary, questioned on the matter, said: “The information provided does create a perception of potential impairment of objective/independent judgment.  But I do not have all the facts, including the nature of the “consultancy”.  For example, maybe things changed between June 6 and 10.”  



Responding to a specific question on whether his company was interested in acquiring Clico’s traditional portfolio, GHL chief executive, Ravi Tewari said: “We see our core business as insurance and we see our core market as T&T. So naturally, acquiring the Clico portfolio, sanistised properly, is something that would always have appeal to us.” His comments were reported in the April 13 edition of the Sunday BG. 


On Friday, the Sunday BG asked Tewari whether Dingwall’s retention as a consultant by GHL posed a conflict of interest with his appointment as a special advisor to the Central Bank. His response was: “Further to your enquiry below in respect of Mr. Dingwall’s role with GHL and the CBTT, the issue of a conflict of interest does not arise. 


“Mr. Dingwall ceased being an employee of Guardian Holdings Limited on May 31st, 2014. As is not uncommon with specially skilled employees who may leave the direct employ of Guardian, during the month of May negotiations took place with Mr. Dingwall towards his obtaining a retainer contract with the Group. “However, on June 9th Mr. Dingwall advised GHL that he was no longer interested in pursuing a retainer arrangement. Accordingly, all related discussions with Mr. Dingwall were discontinued immediately.  


“In summary, Guardian did not consummate a retainer arrangement with Mr Dingwall. Further all parties agree that, under current circumstances, such an arrangement is not appropriate and all discussions on this matter have ceased. This negates any possible conflict of interest.” Responding to further questions from the Sunday BG, Tewari confirmed that Dingwall “has no relationship with the Guardian Group.” 


He said that when GHL issued the notice on June 6: “Mr. Dingwall had not informed us of his change of mind (I believe he was overseas for part of that week) and we were unaware of any possible appointment as an advisor to Clico.” The Central Bank is engaged in finding a buyer for Clico’s traditional insurance portfolio and has hired international professional services group Towers Watson to conduct a valuation of the insurance company, which collapsed in January 2009. 


Clico has stopped issuing new business and has informed its workforce of their termination by the end of June. Clico’s largest asset, its 56 per cent stake in Methanol Holdings (Trinidad) Ltd, is the subject of an arbitration tribunal that in November 2013 directed that the shares should be offered to MHTL’s minority shareholders. The panel is due to deliver its ruling on the price of the Clico shares by the end of July, sources told the Sunday BG last week.


The Ministry of Finance is working on concluding a new shareholders’ agreement with CL Financial, Clico’s parent company, that will outline the process by which the State will recover the approximately $20 billion injected into the group after its collapse.


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