Daily Archives: March 15, 2010

CL Financial bailout is a grievous attack on the very integrity of our Treasury

“We have now been bound into a long-term arrangement to restore the fortunes of one of the Caribbean’s riskiest adventurers.”

“…it seems clear that the cupboard is bare and that this CL Financial group has no unpledged assets of any value.”

“We are… advancing an unlimited quantum of taxpayers’ funds, for which no security has been provided and those funds are being advanced at ZERO interest.”

“…the State (takes) all the risk, a massive injection of capital, responsibility for management, yet even in the case of a successful outcome there is no return either by way of interest on the funds advanced or equity in the rejuvenated enterprises.”

“..where is the $5.0Bn missing from the CLICO Statutory Fund?”

These are some excerpts taken from Afra Raymond’s latest article on the CL Financial – CLICO bailout. Afra used a Freedom of Information demand to obtain the June 12, 2009 CL Financial shareholders’ agreement with the Trinidad & Tobago government – and what a scam that agreement is.

Afra explains how we taxpayers are being raped to save the skins of a few big shot friends of government – and it’s not just the Trinis.

With the full and enthusiastic participation of their David Thompson DLP government, Barbados citizens are also being raped as our Prime Minister uses our money to bail out the Godfather of his children, long-time legal client and political supporter, Leroy Parris.

Barbadians of all ages, colours and political stripes should read Afra Raymond’s articles – but they should also think for themselves as they read the original documents that are posted on Afra’s website.

Florida: Just one of the Duprey family mansions

Taxpayers take all risks while the Bigshots keep their Mansions

My friends, you don’t have to listen to what Afra says. You don’t have to listen to what Barbados Free Press says. You can think for yourself so read the original documents and make your own list of questions and demands of the elected politicians who have pledged the wealth of your nation and your future in a bailout that lets Parris and the Dupreys and the rest of them keep their mansions and offshore bank accounts.

As CLICO's lawyer, PM Thompson helped build the house of cards

Then ask Barbados Prime Minister David Thompson to show all the CLICO – CL Financial bailout documents and business records that remain hidden from the taxpayers because Barbados does not have a Freedom of Information law.

Here is Afra’s latest article published in full. You really should visit his website and read it there, but we’ll leave it up here in full because… ya never know!

COMMENTARY on the CL Financial Shareholders’ Agreement of 12th June 2009
By Afra Raymond, Chartered Surveyor

Read this article at: www.afraraymond.com

FOR YOUR INFORMATION: A copy of the official agreement between C.L. Financial Limited and the Government of Trinidad and Tobago (PDF) has finally been delivered to me per my request under the Freedom of Information Act.  The CL Financial Shareholders’ Agreement (SA) of 12th June 2009, which I requested on 16th November 2009 under the Freedom of Information Act, was sent to me by the Ministry of Finance on 11th March 2010.  My emailed response to the Minister of Finance is on the home page of this blog.

My preliminary comments are –

Quantum – The shareholders’ agreement (SA) is silent as to quantum, which would seem to mean that the group will enjoy unlimited access to taxpayers’ funds.  The 2010 budget statement on 7th September states an estimated allocation to the CL Financial bailout of $5.4Bn – but subsequent events have only added to the confusion.  To wit, the $50M USD for the British-American Insurance recovery (as per 2nd November ECCU press release) and the ‘up to $510M’ announced to be available to meet the pensions due to ex-Caroni workers.  Question being whether the $5.4Bn includes the subsequently-announced amounts or are those to be added-on?

Security – At the preamble to the SA – on page 5 – we are told that “…valuable consideration…” is being offered by CLF as per the original MoU.  Of course, given the Governor’s revelations on 7th April 2009 – see http://guardian.co.tt/business/business/2009/04/08/govt-left-empty-handed-cl-financial-bailout – that is simply not so.  Indeed, it seems clear that the cupboard is bare and that this CLF group has no unpledged assets of any value.

Interest – No mention of interest at all.  We are therefore now advancing an unlimited quantum of taxpayers’ funds, for which no security has been provided and those funds are being advanced at ZERO interest.  Given the well-established rule that late payment of taxes makes a taxpayer liable to 20% interest and the interest rate the Federal government charged AIG for their bailout funds – it was 8.5% above the benchmark LIBOR, which was at 3.0% – it is clear that this represents a massive concession to the CL Financial group.  Quite apart from the bailout itself, the 325 shareholders of this group are also benefiting from this unprecedented and unexplained facility of ZERO percent interest rate.

Accounting – Section 4 of the SA sets out the procedure for a proper system of accounts, culminating at 4.4.5 – “…shall ensure that an annual report of CLF is prepared and dispatched…in manner consistent with standard corporate practice…“.  The accepted interpretation of this language informs us that the word ’shall’ denotes an obligatory, non-voluntary duty.  If that is the case, when can we expect publication of the 2008 annual report, accompanied by audited accounts, as per ’standard corporate practice’?

The role of the Shareholders – The MoU of 30th January, at Para (c) of its preamble, spells out its aims as “…to protect the interests of depositors, policyholders and creditors of these institutions…“.  According to the second sentence of the Ministry of Finance press release of 12th June 2009 – this is the penultimate document in the ‘Quick-Guide’ in the CL Financial bailout section of this website – “This new agreement is designed to give substance to the Memorandum of Understanding (MOU) of January 30th 2009.”  The SA of 12th June 2009 was the subject of that press release.  The SA, at Para A. of its preamble, states the intentions of the parties as having been set out in the MoU of 30th January 2009 and ends by “…their stated understanding, inter alia, that certain steps be taken to correct the financial condition of CLICO, CIB and BA in order to protect the interest of depositors, policy holders, creditors and shareholders of these institutions…” (These two words are put in bold as my own emphasis).

I questioned that official version in ‘Fit and proper?’, ‘Party of parties’ and ‘Figuring it out’ – all available on this blog.  Now that we have the actual SA to work with, it is clear that the statement in 12th June press release is extremely misleading.  The SA does not just ‘…give substance to…‘ the original MoU, it in fact is an entirely different species of agreement.  The Shareholders’ Agreement constitutes a written guarantee to protect the 325 shareholders of this CLF group.

Assisting the incoming Management – Clauses 2.3.3 and 2.3.4. of the SA, require the outgoing CL Financial chiefs to render all assistance to the incoming Board and Management in terms of all records and accounts etc.  The question here is ‘Have the new Board and management been receiving the full assistance of the previous CLF chiefs?’  If not, what is being done about it?  If yes, where is the $5.0Bn missing from the CLICO Statutory Fund?

“…several important and shocking facts came to light.”

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Filed under Barbados, Consumer Issues, Corruption, Crime & Law, Freedom Of Information, Offshore Investments, Political Corruption, Politics & Corruption