The Clico/Hindu Credit Union commission of enquiry ended four days prematurely yesterday as several scheduled witnesses were out of the country. Sir Anthony Colman, chairman of the commission, was visibly upset at this development, describing the abrupt ending yesterday as unacceptable. He was speaking yesterday at the current session of the enquiry at Winsure Building, Port-of-Spain.
A representative of the Clico Policyholders Group was supposed to give evidence yesterday but the group asked to be allowed to give an abridged PowerPoint version, as more than one witness would be overseas. Colman said it was not possible, then asked if there were any other witnesses who could testify in the scheduled period.
One of the absent witnesses was Jason Julien, a financial analyst at the Securities and Exchange Commission (SEC). Colman said it was "astounding" that a public body like the SEC could not find a substitute witness. He added: "We lost four days of hearing. This is not good."
In June, Colman complained about witnesses not showing up for scheduled hearings. Three witnesses were held in contempt of the commission, which has the same status as a High Court. They were former CEO of HCU Communications Gawtam Ramnanan, former HCU financial consultant Jameel Ali and Dave Jagpat. The next session of the enquiry will be next February.
Yesterday evening, Clico Policyholders Group spokesman Peter Permell said attorney Lynette Seebaran Suite was supposed to give a presentation on various CL Financial transactions on behalf of the group at the enquiry tomorrow. However, Permell said, Seebaran Suite left yesterday on a business trip to Miami.
Henry Hamlet at CLICO inquiry
Hamlet to the rescue
However, the day was not totally lost. Henry Hamlet, former department manager, health and life, Clico, testified yesterday afternoon. He spoke about his experience at Clico and the problems encountered, such as high interest rates, bloated salaries and other efficiencies that led to its cashflow problems.
While being cross-examined by Neal Bisnath, attorney for Clico, Hamlet pointed to some of the major problems:?High leveraging of assets, dismissal of key personnel in the company, problems in marketing and a lack of good corporate governance. He gave the example of a $68 million loss because of a deal with the HCU.
He said: "The HCU was going through some difficulties and they went into an arrangement with Clico to exchange their liabilities for overvalued property portfolio. "The property received by Clico involved buildings with limited income-generating capabilities.
"Because of this," he said, "Clico incurred $68 million in losses as a result of that transaction. Clico provided mortgage funding for the HCU Convention Centre which was outside the approval of the board." He referred to the insurance policy of former Clico director Gene Dziadyk, who enjoyed special treatment from Duprey, who approved an especially high interest rate.
He said: "I have a letter dated April 2007 from Dziadyk and it says in accordance with the amendment of the policy in 2004, and approved by Duprey, that 75.4 per cent shall be credited to this policy for the period 2004 to 2007. "At the end of April 2007, his insurance policy was worth US$12.5 million. In three years, he moved from US$2.3 million to US$12.5 million."
Hamlet's witness statement said: "After many years poor governance, unsustainable interest rates and the mismatching of assets and liabilities, Clico was no longer in a position to sustain itself." Bisnath asked Hamlet to recommend other witnesses who could also testify. Hamlet gave the names of former CL Financial executive chairman Duprey, Dziadyk and former Clico CEO Ian Garcia.