What is the cost of the Bailouts? Where did all the money go?
As we enter the wrongside of the boom, it is a little like traveling to the dark side of the moon. Familiar navigation points fade from view and we are forced to use bearings that are new.
The quality of our political rulers has now joined in unholy matrimony with the sheer recklessness of their anointed deal-makers to put our economy into an entirely new and perilous place.
At these moments of turmoil and impending crisis, it is always interesting to observe closely what key people are not saying. Yes, the pauses and silences can be very instructive in these situations.
I do believe that our national appetite for melodrama, bacchanal and commess is being played upon to distract us from the seriousness of the situations facing us.
The main example is the CL Financial bailout, which was announced a little over a year ago when the first Memorandum of Understanding (MoU) was signed on 30th January 2009.
Given the subsequent revelations as to the withdrawals of funds by important people and the shareholdings of the Minister of Finance in CLF, it is impossible to say exactly when the actual bailout began. All we can say for sure is that we, the public, were told of a bailout on 30th January 2009.
There has been a cascade of bewildering and disturbing events – those are set out at my blog, www.afraraymond.com – and we are now at a position of deep confusion. The resignations of three top-level executives of the group and the subsequent bald press releases are most disturbing. They speak of disputes and jostling taking place in terms of this huge group we are now committed to rescue. For the record, those resignations were –
12th January – Steve Bideshi, CLF Group CEO, effective 31st January
19th January – Michael Carballo, CLF Group Finance Director, also effective 31st January
3rd February – Claude Musaib-Ali, CEO of CLICO, effective 14th February
Forensic Auditor’s Report due… but so what? Where are the audited accounts for these companies?
The growing sound we are hearing is that the Bob Lindquist forensic report into the dealings of CLICO etc. is to be completed at the end of February. Many people for whom I would normally hold some respect are anxiously awaiting that report to see what possible wrong-doing might be revealed.
In my view it is an error at this time for us to be awaiting the publication or selected leaking of such a document.
We need to press for the Audited Accounts of the CL Financial group as at 31st December 2008. Those accounts should be signed-off by the same professional firm which did the 2007 audit, the internationally-renowned PriceWaterhouseCoopers.
That is the most important single document, since it will fix an asset value at the end of 2008. That is –
12 months after the last audited accounts, which showed a total asset value of $100.666Bn. See – this PDF
55 days after Michael Carballo, the then-Group Finance Director, gave statements to the Business Guardian that the group had assets of $100Bn and could weather any storm. See – this Guardian story.
13 days before Lawrence Duprey, the group’s Executive Chairman, wrote to the Governor of the Central Bank to request urgent financial assistance. That letter was accompanied by a table setting out the group’s asset values – totaling $23.9Bn – and was read into the Hansard by the Minister of Finance on 4th February. See Hansard at page 628.
16 days before a dividend of $3.00 per share was paid to the CL Financial shareholders.
30 days before the historic press conference to announce the bailout, at which it was repeatedly stated that the CL Financial group had $100Bn in assets.
Despite its obvious importance in the mystery of the missing money, there is complete silence as to the progress of the 2008 audit. It is almost a full year overdue and the only accounts we hear of are the forensic and confidential ones.
The CL Financial group’s audited accounts were always published anyway, so why can we not have a clear, official statement as to when the 2008 audited accounts will be published? What is the mystery?
This country is now bailing-out a group which has failed and/or refused to provide its annual audited accounts and that is unacceptable in terms of the proper expenditure of our taxpayers’ funds. (BFP editor’s comment: To bring this a little closer to home so we slow Bajans can understand, just substitute “Barbados” for “this country” and “CLICO” for the reference to “group”.)
Let us mark this moment well, because if the 2008 audited accounts are allowed to fade into obscurity, please do not think that we, the citizens, will be treated any better with the 2009 accounts. Please take note that this is a recipe for even greater levels of corruption than what besets us now. Continue reading