CL Financial (CLF) made Gita Sakal, a teacher, turned lawyer, into a million-dollar lady.As former corporate secretary, she earned a multi-million dollar salary and multi-million dollar bonuses.Sakal, at yesterday's hearing of the commission of enquiry into the collapse of Clico and the Hindu Credit Union admitted that she approved payments, which ranged from hundreds of thousands to millions, to herself.
That, she said, was the practice at CLF, observing that while he was finance director at CLF, Andre Monteil also paid himself."There were no policies and procedures put in place to prevent such a thing from occurring," she told the commission.Through her company, Corporate Consultants, Sakal earned $17 million a year, tax-free, from the Lawrence Duprey-led conglomerate.That excluded emoluments which in 2008 amounted to $12.25 million.
These were paid to her other company, Discreet Logic Limited, through CLF/Clico's inter-company account.Sakal, who explained to the commission she earned her salary by providing legal services to CLF and its subsidiaries on demand, said she did not understand why her salary was made an issue as they were in line with other CLF executives.She told the commission Duprey often kept the "competitive" compensation packages of his executives to himself "to prevent envy and a situation like this.
"It was not good practice but that was the only one there was," she added.To substantiate her claim, Sakal observed that Ram Ramesh, who was hired in January 2008 as chief financial advisor to the chairman, earned US$45,000 a month while former CLF finance director, Michael Carballo, earned US$35,000, exclusive of benefits.Both salaries, she said, were significantly higher than her US$20,000 a month.Sakal also revealed that CLF directors, pre and post- Memorandum of Understanding (MOU) with the Government of Trinidad and Tobago in January 2009, CLF directors were well-compensated.
CLF directors pre-MOU earned US$5,000 a meeting.Sakal told the commission Government appointed "representatives to the CLF board (which included the permanent secretary in the Ministry of Finance) increased and extended board meeting fee to US$10,000 for the chairman; US$8,000 for ordinary directors (which included Carballo) and US$2,000 for committee members."
Further, as corporate secretary to Methanol Holdings (MHTL), Sakal told that post-meltdown, at the insistence of Government-appointed directors, "MHTL for the first time introduced directors' fees: chairman US$10,000 and US$5,000 for ordinary directors."Sakal's revelations, though, did not distract from being probed on whether she thought she deserved such lucrative compensation, Sakal directed that question to CLF, pointing out that it agreed to retain her services.
Her US$5 million "part payment of her termination package" also was brought up for scrutiny by attorney for the Clico Policyholders Group (CPG), Terrence Barrath.That, she said, was paid "in accordance to the practice at that time."Barrath questioned how CLF, which had approached the Government for help because of their liquidity challenges in January 2009, could have written a cheque to Sakal for $30 million in April.For her part, Sakal maintained it was a sum agreed to by Duprey, as his was one of the two signatures, hers being the other which were needed to approve the cheque.
She told the commission, after her compensation was published in the media, she returned the cheque after being "harassed" and "threatened" by Carballo.Questioned by Bharath on why she did not try to deposit her $30 million Republic Bank cheque, Sakal said it was her practice to deposit several at a time."You are the only person to hold on to a $30 million cheque and not put in the bank to earn interest," said Bharath.
"Banks are not giving interest anyway," replied Sakal.Sakal's attorney, Justin Phelps, intervened, stating that his client was subject to an "oppressive" and "unfair" cross-examination which could damage her reputation.Colman ruled that material could be admitted by establishing a relevant evidential premise.Sakal replied: "I now understand why people are paying a $2,000 fine and buying tickets to go out of the country."The former corporate secretary, who admitted to initiating talks on the sale of Clico's lucrative Clico Energy to Proman Holdings, said the US$5 million was sourced from the sale of Clico Energy Limited (CEL).
Clico energy sale
Sakal told the commission she was approached by Duprey to initiate talks with Joseph Cassidy for the sale of CEL.She explained that CLF was facing a liquidity crisis and, pursuant to the MOU, she was comfortable with the asset sale.She said: "Clico Energy shares were the only asset of any real value that I knew of which CLF could sell almost immediately. "Proman had a right of first refusal under the terms of the shareholders agreement." Sakal said while she felt comfortable selling 25 per cent of CLF's 34 per cent portion of CEL, she thought Clico's portion (17 per cent) had restrictions because of the MOU.
"I had no issue with CLF's sale of its 34 per cent. It was a direction given in the MOU that "CLF shall sell other assets" and CLF needed the cash. My issue was one of procedure per the MOU," she said.The final decision, she said, belonged to Duprey.She added: "The chairman asked that I keep the matter of the proposed sale of CEL shares confidential, which I did. "It is important to note that at about this time the chairman had raised concerns about a "leak" at the CLF board level."What is more, in my view, a sale by CLF of one of its main and most valuable assets would have fed rumours that could potentially have had a negative impact on the group.
"I complied with Mr Duprey's request for confidentiality on this basis."I was working on instruction from Mr Duprey." She maintained it was her suggestion to open an escrow account to protect Clico's 17 per cent interest."Of course, there were little breeches with the MOU. I agree it was not followed properly," she said.