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PWC official at Clico/HCU Enquiry: I can’t comment on CL $1.8b deal
Colin Wharf, senior partner of Price Waterhousecoopers (PWC) has denied having first-hand knowledge about CL Financial’s $1.8 billion acquisition of property in Florida in January 2008 known as the Green Island Transaction. Lynette Seebaran-Suite, attorney for the Clico Policyholders Group, cross-examined Wharf yesterday on the opening day of the eleventh session of the Clico/HCU Enquiry at the Winsure Building, Port-of-Spain.
PWC was group auditor for CL Financial Group when it collapsed in 2009. “Are we to understand that the group acquired property for TT$1.8 billion?” Seebaran-Suite asked. Wharf replied: “These financial statements are prepared by one of the other witnesses. I am unable to comment on the contents because I was not the auditor.” She responded by calling him an “expert” and asked him to interpret the actions of CL Financial’s management in this acquisition.
He said he could not do that. Throughout yesterday’s session, Wharf kept insisting he was not an auditor at the group level at that time so could not comment or did not have knowledge of what occurred during the period of CL Financial’s collapse. “At the risk of sounding unhelpful I will really like to have another witness to be able to provide a far clearer explanation as I will not be able to do that,” he said.
Wharf told Neal Bisnath, attorney for Clico, it was only in 2010 that he became a senior partner in PWC. Bisnath said if PWC is auditing the entire group it would be expected that they would have “oversight” in terms of how they relate financially. He argued if one entity of a group transfers money to another entity then the auditors should be aware. “With Clico we are not speaking about $100 but billions of dollars,” Bisnath said.
“I am not aware that we audit almost all of the companies. This audit of the CL Financial Group is in the region of 60,000 hours,” Wharf replied. Bisnath then told Wharf it is a fact that under PWC’s watch that the group collapsed. “First of all I am not sure what you mean ‘under the watch’ of. My response is that business failures do not equate to audit failures,” he replied.
Attorney for the commission, Edwin Glasgow, QC, asked Wharf if in hindsight he thought CL Financial’s actions were risky. “It is not a judgment I could make and the reason for that is that I would be required to go back in time and space. That would be for the engagement leader to make,” he replied. Glasgow then said: “One of the sad things of being the man in charge is that he picks up the responsibility of yesterday.”
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