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$1.1bn transferred

Published: 
Saturday, July 29, 2017
Liquidators to track Angostura profits—Imbert
Former Chief Executive Officer and Managing Director of C L Financial Limited, Marlon Holder leaves the Hall of Justice, Port-of-Spain on Wednesday. PHOTO: ANISTO ALVES

Finance Minister Colm Imbert says approximately $1.108 billion of Angostura’s profits was siphoned off to Scottish firm CL World Brands (CLWB) over a period of several years.

But Imbert assured that this CLWB matter will be tackled vigorously, and the exact amount of money lent, what it was used for and the beneficiaries in the transactions will be unearthed.

He made the disclosure one day after Prime Minister Dr Keith Rowley said Government had discovered that “substantial profits” from one of CL Financial (CLF) subsidiaries—Angostura Ltd—had been transferred to CLWB, creating a pool of funds outside of T&T.

“We found out in recent weeks that the Angostura profit was going to a company in Scotland called CL World Brands, purportedly owned 100 per cent by shareholders who were bailed out by the Government,” Rowley said during a statement to the nation on Thursday.

Having examined the facts, Rowley said they realised that the shareholders did not in fact own 100 per cent of the company. Rather, he said 60 per cent of Angostura belonged to CIB and Clico, while the remaining 40 per cent was owned by the Scottish company. Rowley also indicated that Government was alarmed by this development, but discovered that one person was responsible for facilitating this activity and took action.

The PM’s statement came two days after the Government was given the green light by the High Court to appoint provisional liquidators to preserve the assets of CLF, as it seeks to recover a $15 billion debt following its bailout of the conglomerate in 2009. Government has bailed out CLICO and CLF related companies to the tune of $23 billion, but to date only $7.5 billion had been repaid.

When asked in an email yesterday exactly how much of Angostura’s profits CLWB had received, Imbert wrote, “In Mr (Vishnu) Dhanpaul’s affidavit (Permanent Secretary in the Finance Ministry) in the application to the court to appoint provisional liquidators, its is stated that $1.108 billion was taken from CL World Brands and “lent” to CL Financial.”

The transfer, Imbert said, was done over a period of several years.

Asked how the Government eventually discovered the profits were being transferred to CLWB, since there was no audited financial statement provided to Government through its board members, Imbert said the figure of $1.108 billion “lent” by CLWB to CLF was recorded in CLF’s April 30, 2017 management accounts.

Asked if the Government can now retrieve the substantial sum, Imbert said they had applied for the appointment of provisional liquidators to preserve and protect the assets of CLF.

“This CLWB matter will be addressed when the provisional liquidators determine the exact amount of money “lent” by CLWB to CLF and what it was used for, and by whom, and who the beneficiaries of this money were,” Imbert wrote.

Imbert, however, refused to identify who was the person identified as the facilitator of the siphoning of the funds.

In the winding up petition filed in the High Court by Dhanpaul on July 11, it was suggested that former managing director and group CEO of CLF Marlon Holder may have had a role in the matter.

In his affidavit, Dhanpaul sated that Holder was terminated on the grounds that he caused the sum of $403,750 to be paid to the United Shareholders Ltd (USL) for professional and business consultancy fees without invoices for those services. The petition document also stated that Holder, who began working at CLF on February 25, 2016 and was fired on June 28, caused or facilitated the write off of inter-company debt without board approval, caused dividend from Angostura Ltd to be transferred to CLWB and or CLF without prior notification to the board, engaged in Pricewaterhouse Coopers purportedly on behalf of CLF for the preparation of Project Rebirth without authorisation and failed to report to the board any details of the project.

Under the headline CLWB in the petition, it stated that CLF had taken a number of unsecured loans from Scottish subsidiary CLWB.

“According to a report submitted by the chairman of CLF dated June 20, 2017, over the past three years CLF has borrowed a total of US$138.6 million to pay inter alia debts of subsidiaries and other creditors, but not the Government of T&T,” Dhanpaul wrote.

The petition stated that these were long term loans with five-year moratorium for payment.

“CLF’s shareholding in CLWB is one of its assets that it had proposed to be applied to settle its indebtedness to the Government,” the petition stated.

Issue picked up in 2016

Fired managing director and group CEO of CLF Marlon Holder, who is challenging his dismissal in court in a filed affidavit dated July 24, says it was Angostua chairman, Dr Rolph Balgobin, who first brought to his attention CLWB board approval for two loans made from CLWB to CLF.

“The corporate secretary confirmed that there had been approval for one loan and that she was unsure at the moment about board approval for the second loan. All monies borrowed from CLWB were used to pay taxes and other loans due to Government related entities,” Holder stated in his affidavit.

Holder explained that Ingrid Lashley, nominee of the Government of T&T, then raised the issue of not ever seeing the accounts of CLWB since their appointment to the board in 2016.

“She indicated that the Government nominees knew nothing about CLWB. I responded that CLWB was on the list of companies that were assigned board members including Balgobin,” Holder stated in his affidavit.

Holder said Lashley enquired about the signing off by him of the 2015 accounts of CLWB without board approval.

“I told them that I was asked by KPMG that same day, then Jennifer Frederick (CLF’s corporate secretary) said that if I did not sign off the CLWB accounts they would miss the filing deadline and CLWB would be subject to being absorbed by the UK Treasury,” Holder said in his affidavit

Holder said he did not have time to call an audit committee or board meeting in the circumstances.

“My main concern was that CLWB, which had about US$13 million or thereabouts in cash, would be lost to CLF and that I wanted to act immediately as the filing deadline was that day and KPMG had just finalised the accounts,” Holder wrote in the affidavit

Holder said that then enquired about the impairment of the loan to CLF on CLWB books.

“I said it was the auditors KPMG who impaired the CLF loan on the basis that CLF could not repay the loan. The impairment figure was £71 million. I said that CLWB is a 100 per cent owned subsidiary of CLF. To correct the impairment is for CLWB to receive payment from CLF and simultaneously CLWB pay CLF a dividend (a net off transaction),” Holder said in his affidavit.

After being interrogated by the Government nominees whilst they ate pizza, Holder said he was asked by Balgobin to leave the room.

Calls to Holder’s cellphone went unanswered and he did not respond to a text message yesterday.

Also a female who answered former CLF chairman Lawrence Duprey’s phone said he was not available for comment.

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