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‘Ask Ewart, ask Dookeran’

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Unanswered questions about Clico..
Published: 
Sunday, April 28, 2013
The Lawrence Duprey Files: Part Four
Chairman of United Clico Policyholders Angeli Gajadhar, left, executive member Harry Boodoosingh, secretary Vinood Singh and treasurer Stacy Williams speak with attorney Ramesh Lawrence Maharaj, centre.

It was the second time I was flying into Fort Lauderdale and I hadn’t taken two things into consideration. The first was it was the Spring Break weekend and the second was that the airport was really an international airport and there would be long lines in Immigration and Customs. And so I tormented myself in these lines and hoped that Lawrence Duprey, who had agreed to meet us at the airport, would not become impatient and go away. 

 

 

We had conspired only on the Internet and I didn’t have a phone number for him. More than that; our e-mails had not always been friendly and misunderstanding his silence I had not been tactful and had called him an ugly name. But the son-of-a-b---- had seemed to have forgiven me and said that he would meet us. He had also made arrangements for Rhona and me to stay at the Comfort Suites at 1800 South Federal Highway in Fort Lauderdale.

 

 

I guessed he did this because he hadn’t made up his mind about my request to write a sequel to the book we did on his uncle, Cyril Lucius Duprey, in 1986. But the truth is I had no idea what motivated him to see us because he was so fixed on the idea that journalists could not be trusted to be nice to him.

 

Frankly I was embarrassed. Air Caribbean flight 480 had been delayed in leaving Piarco International Airport and the long lines in Immigration and Customs kept us in the terminal for nearly two hours. I had no idea how busy he was and how curious he was to find out if there was more that we had in mind than a memoir of his work at Colonial Life. Even his Internet responses had failed to reveal any real desire to meet me and it was only once he had shown any interest in the project.

 

 

However, it was when his wife, Sylvia, wrote me asking for my home phone number did I feel he would condescend to talk with me if I were to appear on his doorstep. I hadn’t been one of the members of the media in Trinidad that they disliked and believed they couldn’t trust. Our absence, in China from 1998 to 2010, had insulated me from their distrust and anger.

 

I think I was shocked by the layout of the Customs area; it reminded me of airport terminals in poorer West Indian islands and I was surprised by its primitive character and the need to form lanes against the walls. When we were finally free of the humbug of officialdom and we walked towards the exit, I wondered even more if Lawrence Duprey had kept his word. He had.

 

 

We recognised easily the overweight former chief executive officer of Colonial Life Insurance Ltd and the CL Financial Group of Companies, dressed in long-sleeved cotton shirt and trousers and wearing brown loafers. No socks. At no time during the seven days we were with him did he appear in more formal wear.

 

“The flight was late in leaving Trinidad,” I apologised. “I hope you haven’t been here for hours.” He was nonplussed and nonchalant. We hadn’t met in over 14 years and he seemed the same giant of a man. I had always felt that he had the physique of a Sumo wrestler. I wondered about his blood pressure, which I think is one of the fatalities we meet in growing old. Is everyone else, at 80, as fit as you are? But I wasn’t really and was recovering from the flu I had picked up in London over the Christmas holidays.

 

“No trouble at all,” he said. “I just sent away my driver. This is a no-parking zone. I have called him already and he will be back soon. Are you hungry?” “We are not,” Rhona assured him. “Good. After we get you to your hotel, we will find a restaurant. Do you have anything special you would like to eat?”

 

There was nothing in his manner or speech to suggest nervousness or pomposity. He was a regular guy meeting friends. It seemed to me bizarre that lawyer or friend would want him to stay away from Trinidad and from the Colman Commission. This was where his voice, making the case for his innocence, should be the loudest. “No. Anything will be just fine. It’s just been a long day. And Owen refuses to eat anything on a plane anymore.”

 

“Don’t worry. We will find a good restaurant near your hotel. Here comes Jimmy. I had to send him away because we didn’t know how long it would take you to clear Immigration and Customs.” “We are sorry.” “Forget it. Let me take your bags.”

 

 

The AIG Story
I had stalked him but I was still wondering why he had agreed to meet us in spite of his distrust of the media. There was of course our proposal to him to write his story to show How the Colonial Life Insurance Company could be re-invented to satisfy policy-holders, affiliates and governments in the Caribbean. But I didn’t have in mind a public relations stunt; I was after Duprey  Part Two.

 

 

This time, however, I felt I should be paid for the work I was prepared to undertake. So I had suggested a fee to meet the costs of research, writing, printing, marketing and distribution of the book. I knew that travel to places in the Caribbean where Colonial Life operated would consume most of this money.

 

 

But I projected that this money would be recovered from the sale of 3,000 copies of the book, which I thought was a reasonable expectation because of the present public interest in CL Financial. And in one of my recent e-mails to him I had outlined what I thought were costs that he should underwrite.

 

He didn’t bite; he thought the reality of book publishing in the Caribbean supported his pessimism. “There are things I want to say to dispel the rumours in the region about me and I believe full-page advertisements in newspapers in Trinidad and Barbados would serve me better than any book.” But he didn’t back off and I felt I had work to do still on winning him over to Duprey Part Two.

 

At the time I had no knowledge of Hank Greenberg’s American International Group story and it was only when he left us that night, after dinner at Trattoria Pizzeria Panaretto on 17th Street not far from our hotel, that I had my first encounter with Mr Greenberg. “Read the Preface,” Lawrence said, taking a copy from his briefcase. “It is what I have in mind for my own book. When we meet tomorrow I will be taking back my copy from you. Later we could pick up a copy at Barnes & Noble if you want to have your own copy.”

 

 

I recalled that in one of his e-mails to me he had said that when we meet we could discuss how to proceed on the project. The objective was still in sight. I put Mr Greenberg in Rhona’s hands. “This is your homework,” I said. “But before you start, get house-keeping to fix the bath so we could have a shower.”

 

An hour later I was making my way through P D James’ Death Comes to Pemberley when Rhona decided to test my interest in the project we had given ourselves. Lawrence Duprey she said had cut his teeth in selling insurance outside, meaning “up the islands.” He had quickly recognised the numerical disadvantage of a West Indian population of three to four million that would limit growth in the best of times and so sought answers in much the same way as did Hank Greenberg.

 

 

And, just as Greenberg had learnt from C V Starr the art of networking and giving financial support to young people, so too did the younger Duprey learn from his uncle the fine art of selling insurance, always conscious of the need to alleviate poverty. Starr developed also a tradition of giving financial support to young people and encouraging them in their education and careers.

 

 

But again the numbers crunch of incoming premiums could never redound to the benefit of all if drastic change did not occur. Radical change demanded radical moves and so in both cases the men at the top had to cut to suit. This would undoubtedly challenge die-hards and create aggrieved employees among those without the vision. In fact, the changing picture of doing business globally would pressure a company into having to raise funds to continue doing business in one country after having just established itself in another.

 

 

To stay on top of the pack, it was necessary to buy and sell in a continuing game of what may be seen as wheeling and dealing but what in the world of high finance is considered astute business acumen. It is into this environment that Lawrence Duprey, the chap from the West Indian Islands, was to find himself.

 

 

‘The darling of the times’
In the company of other CEOs from such institutions like Bear Stearns, Lehman Brothers and Goldman Sachs, Lawrence Duprey ventured forth into the financial world of golden opportunities.

 

 

“We should not be tethered to outmoded practices” could have been the new doctrine that Duprey borrowed from Greenberg as he outfitted his newly reconstructed team from the parent Colonial Life Insurance Company (Clico) that now named its dynamic project base CL Financial. Perhaps there is a similarity here too in that young Greenberg was to set up AIG apart from his mentor’s C V Starr & Co,  and he was able to return to the parent company which he now heads.

 

 

Was this Lawrence Duprey’s plan in setting up the CL Financial Group? And did he at the same time establish his other companies as a fall-back in case of any negative development?

 

Perhaps, too, like Greenberg, Duprey saw the stultifying of his uncle’s company where it would be a mistake to rely on continuing to generate income from investing money from the time premiums were received and expenses and losses were paid. This could lead only to aggressive competition in the same market.

 

 

“Expenses and loss absorb more than premiums received from year to year with an underwriting loss.” Slashing the expenses and instituting other reforms like re-insurance facilities—one company buying insurance from other insurance companies to recover part of its losses—was cheaper than maintaining capital to cover losses.

 

Another ploy of Greenberg was to move from individual policies using agents to underwriting large commercial risk in exchange for corporations using brokers. The results were phenomenal with a cut in expense ratio and a doubling of assets in four years. Now that was in 1967. Would Lawrence Duprey by 1988 have absorbed these lessons from Greenberg well enough to take his own company into the competitive advantage over the next years?

 

 

He must have learnt well, as according to Lawrence, the company performed fabulously in creating wealth for the Caribbean as well as for its governments and stakeholders. Lawrence Duprey was the darling of the times. One line that he seems to have learnt well in more recent times is with reference to the threat of new controls by regulators. “They will backfire on the insurance and finance industry,” he predicted. Over-regulation in the AIG story eventually led to the destruction of businesses.

 

“In the guise of promoting ‘shareholder democracy’, activists and regulators homogenised corporate America by imposing a one-size-fits-all governance model that often ignore the special cultures of particular businesses. The result has shifted power from corporate managers to an assortment of outsiders, including outside directors, auditors and lawyers. Outside directors now control corporate boards, though they have vastly limited knowledge compared to inside directors.

 

 

Outside lawyers un-schooled and inexperienced in business take strong leadership roles for which many are unsuited. Risk of error and other costs can be great for corporate stakeholders. This is what happened three years after Greenberg was forced to resign.” The US Government stepped in with a US$60 billion bailout to save various large banks whose interests were self-serving.

 

As Clico policyholders make a case for their claims, how will the Government of Trinidad and Tobago satisfy both them and the institution whose aim was to create wealth and to ameliorate poverty? Four years after the takeover, there still remain many questions to be answered.

 

 

Perhaps the most important one is why with so many of Clico’s assets continuing to be productive, why is it that the loan of TT$7 billion has not been repaid (or has it?) from those obvious earnings and the company restored in keeping with the Memorandum of Understanding? Why have Clico policyholders and investors not all been satisfied? Why, too, must the valuable assets of the iconic Clico now be handed out in fire sales to what may well be construed as patronage on the part of those in high places?

 

 

Surely, the State can only benefit by managing it for the citizens of Trinidad and Tobago! And finally, why must the people of Trinidad and Tobago continue to foot the enormous investigative bills without themselves becoming stakeholders in what was the original intent of Cyril Lucius Duprey and Cyril Oswald Monsanto—the original visionaries of homegrown entrepreneurship that they proudly branded Clico.

 

“Manning is no more on the scene but there are persons who could answer these questions. There are, for example, the former head of the Central Bank, Ewart Williams, and the former minister of Finance, Winston Dookeran.

 

 

And on just as important a scale there are Mervyn Assam, Bhoe Tewarie, and Gerald Yetming. The public should want to find out why the PP Government did not want me around. But how much immunity will I have if false charges are prepared against me and I am paraded as a fugitive and a felon? I don’t think I could risk this.”

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