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Accountant at Clico probe: Vindra’s murder slowed auditing (with CNC3 video)
The 2006 abduction and murder of the chairman of Clico’s audit committee, businesswoman Vindra Naipaul-Coolman, contributed to a situation in which the committee’s work was held up for almost two years, PricewaterhouseCoopers (PWC) accountant Dwayne Rodriguez-Seijas has said.
Rodriguez-Seijas said this yesterday while being cross examined by Marion Smith, counsel to the enquiry on the second day of the 11th session of the Clico/HCU enquiry at the Winsure Building, Port-of-Spain. Smith said: “You reported that they almost always did not meet on a regular basis. What we have is that they still did not produce documents on corporate governance models by the end of 2007. But we all know that having appointed an audit, it did not function. The simple fact is there was not an audit committee.”
Rodriguez-Seijas told the enquiry after Naipaul-Coolman’s kidnapping and murder the committee, which already had difficulty holding meetings prior to that, was again affected and audit meetings were not held during that period. He added: “In 2006 there was a meeting and in 2007 there were no meetings.
“There was an unfortunate incident where the head of the audit committee was abducted and the case went on for some time and unfortunately she was found murdered and because of the effect they had not thought to appoint a new chairman until they knew results of the investigation and whether she was alive. That was my understanding.” On December 19, 2006, Naipaul-Coolman was kidnapped by armed gunmen in the driveway of her Lange Park, Chaguanas, home. The Xtra-Food owner’s body was never found.
Smith replied: “Whatever happened, there would have been nothing to stop the appointment of other members to the audit committee which is a very important function.” She also said the PWC “overstated” Clico’s strength. Throughout yesterday’s sitting, Rodriguez-Seijas said up until 2007 Clico had a strong financial performance.
“In the last month of 2008 we have a number of significant factors emerging, all of which impacts the going concern and all of which should be taken into consideration as the CLF finale. I would suggest you overstated the strength of Clico in 2007. Effectively, PWC ignored the developing picture in 2008,” Smith said. Rodriguez-Seijas replied: “I do not think I stated anything that was not factual in the financial statement. I cannot comment on any development after 2008 in CL Financial.”
Neil Bisnath, attorney for Clico, who also cross examined Rodriguez-Seijas, said negligence on the part of PWC allowed Clico to “fix the books.” Bisnath referred to documents which showed a transaction had taken place in 2006 but Clico backdated it to 2005. “Does this suggest to you that in 2006 the Floridian transaction took place and was backdated to December 2005. That is not what is suggested to you?” he asked.
“It suggests to me that the transaction was made in 2006 and then the devaluation became available, without knowing there was an agreement in place as of December 2005 that the transaction would take place at fair value. I cannot say when the transaction would take place,” Rodriguez-Seijas replied. Bisnath said the document suggested the transaction was done in 2006 but the direction from Clico Finance director Karen Gardier was May 17, 2006.
“I am suggesting to you that with respect to the accounts of 2005 and 2006 and the gain of sale of available for sale assets, which was the Floridian project and the use of the derivative instruments, those were instances to fix the books for 2005 and 2006. That is my suggestion,” Bisnath said. Rodriguez-Seijas replied: “I do not accept that suggestion.”
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