All CL Financial's executives "were trying to make a buck for themselves," said former Group Finance Head Michael Carballo as he concluded his 91 page witness statement which covered two days at the third sitting of the Commisson of Enquiry into Clico and Hindu Credit Union yesterday.Carballo's conclusion came for a series of "self-serving, self-dealing and self-interest" manoeuvres made by top CL executives after the company, under liquidity pressure, went to the Government of T&T for help in July 2009.He lamented that executives who "thrived on the loose governing standards" of CLF did not have the company's best interest at heart.Among those Carballo identified are:
1. Andre Monteil- Carballo's predecessor, whose advice the Group frequently "leaned on" stepped in during CLF talks with the Government of T&T because of his political connections. "Lawrence said he wanted Monteil involved in the solution and he wanted everyone else to take a back seat. I was taken aback. Ram Ramesh was taken aback," said Carballo.He told the COE that Monteil had engineered a plan to sell CLF's 54 per cent shareholding in Republic Bank Limited at above market rate at $130 a share. With some 88 million in shares the deal would have secured the illiquid CLF group about $12 billion. Monteil's Stone Street would have earned a 0.5 per cent commission valued at $60 million.The CLF board subsequently rejected this proposal.But not before Monteil earned US$750,000 for his consultancy services in negotiating the MOU.
2. Gita Sakal-CLF's corporate secretary who sought a US$5 million bonus following her resignation from the company. Carballo told the COE, that Sakal's contract would have ended December 31, 2011 but prior to her breaking it, she authorised a withdrawal from CLF's Royal Bank US account for the sum of US$5 million. That sum, according to the explanatory letter, was to be paid to her company, Corporate Consultancy Limited.This, said Carballo, was done in March 2009 in preparation for her resignation. Carballo said Duprey never authorised such a payment and further, following the MOU, the chairman had said no bonuses were to be paid to CL executives. Sakal's contract provided for a $2 million annual bonus.
3. Ian Anthony-Carballo explained that attorney-at-law Anthony was brought from abroad by Duprey to re-negotiate the MOU with the T&T Government to the Shareholders Agreement. This, he said, afforded Anthony intimate knowledge of the company's operations. He said in June 2009, Anthony sought to get Duprey's signature on a letter in Miami airport, which would have appointed himself an agent for the sale of certain CLF assets. A visibly irate Carballo called on the disciplinary committee of the Law Association to investigate Anthony's ethics in relation to this matter.
4. Geoffery Leid-Carballo explained that Leid, who was a director and company secretary at Clico, formed part of a DYL consortium-Duprey, Yanapolis and Leid.DYL, Carballo told the COE, was doing project management work for a number of Clico's real estate investments in Florida.Carballo questioned how DYL, which is a private company in which Leid is a primary shareholder, charged project management fees to Clico which were readily paid and in excess of generated market rates. He also called on the Law Association to look into Leid's ethical conduct.
5. Clico Energy Limited-the sale of an asset valued at over US$200 million for a mere $46.5 million to Proman Holdings around February 4, 2010, angered Carballo, as it was done with the knowledge of three people-Sakal, Duprey and CLF director Rampersad Motilal. Carballo said he could not understand why such a profitable entity was undervalued and sold without the CLF board's knowledge, save three, the Central Bank of T&T and the Government of T&T.He said one broker, Charles Pratt, made a US$85 million commission after he negotiated the sale of Florida-based Green Island for US$300 million to British American.
At the Clico Investment Bank, Carballo said, signature bonuses were paid to the executive of CIB and commissions were paid on booking a loan.He explained that despite Duprey's agreement to cease conducting deals after the ambitious acquisition of Lascelles de Mercado, he agreed to buy out Jamaica Money Market Brokers' 49 per cent shareholding of CMMB for US$42 million. That arrangement, he said, never came before the CLF board and also increased CLF's debt to its subsidiary CMMB.Despite the company's internal feeding, Carballo said when word got out of liquidity problems being experienced by the Group, from the period November 2008 to January 2010, the CL Group of companies paid $700 million to some big depositors- Caribbean Airlines, the National Gas Company, a few wealthy EFPA policyholders.Carballo lamented that while Duprey was a "very unique individual" and having an insatiable risk appetite, he lacked an honest core-team of executives and advisors.