Did former T&T Finance Minister break her oath over CLICO insider trading?

CL Financial bailout – Swearing an Oath

by Afra Raymond

The former Trinidad and Tobago Minister of Finance, Karen Nunez-Tesheira (photo above), is once again in the news, due to her dispute with the Integrity Commission as well as her expected testimony at the next session of the Colman Commission.

The former Minister has had to defend against allegations of insider trading related to her early withdrawals from CLICO Investment Bank (CIB). There was a lengthy address to the Parliament on Wednesday 4th February 2009. The March 2009 revelation in the Guardian newspaper, that Nunez-Tesheira was a CL Financial shareholder was also the cause of further defensive statements (PDF) to Parliament on 27th March 2009. In the first wave of defense, there was silence as to the fact of Nunez-Tesheira’s shareholdings in CLF.

In November, her attorney attempted to challenge my position on this at the Colman Commission, but I maintained that ‘If the genuine attempt was to address the perception of corruption in a forthright fashion, all the information should have been given’.

In the second wave of defense, there was no mention of the fact that the insolvent CL Financial group paid a dividend to its shareholders after writing that fateful letter to the Central Bank for financial assistance. Again, through the unfolding scandal we are witness to responsible officials who chose to be selective in making the required full and frank disclosure.  All to the detriment of the tax payer.

Those attempts to defend against the allegations were only partially successful, since there is little doubt that Nunez-Tesheira’s reputation has been damaged by the entire episode. 

CL Financial, CLICO bailout: The rot is deep, the corrupt keep their Code of Silence

“There was no agreement.  None at all.  For a loan exceeding one billion dollars…

Just imagine the Chairman who presided over the meeting of Clico Investment Bank’s Board which approved that loan… attempting to explain just what they were doing dispensing with depositors’ funds in that loose fashion.  I can scarcely wait.”

by Afra Raymond

Testing the Code of Silence

The Code of Silence has formed the subject of several columns in this series.

I am referring to the unwritten agreement amongst the leadership group in our society to maintain silence in matters of white-collar crime.  The guiding principle of the Code being that the members of that group must never be exposed to the same scrutiny and penalties as the common criminal.

That Code of Silence is poisonous to the progressive development of our society.  Unless we can bury the notion that white-collar crime pays, our society is doomed to lurch from crisis to crisis.  White-collar crime will never be truly challenged until the Code of Silence is tested to destruction.  I welcome anything which would dismantle the Code of Silence.  Literally anything.

The Commission of Enquiry into the various financial collapses which have beset us – Clico, British-American, Clico Investment Bank, Caribbean Money Market Brokers, the CL Financial group and the Hindu Credit Union – was announced by the Trinidad and Tobago Prime Minister in her 1^st October address to Parliament.

CL Financial bailout: “Amazing scenes were witnessed”

“A glaring example of the kind of wanton wrongdoing at the heart of this mess…  Clico Investment Bank fails to file its Corporation Tax returns for three years, yet keep their banking licence and arrange for the taxpayer to bail them out when it all goes sour.”

Where are the two-years past due audited accounts for CL Financial?

by Afra Raymond

The new situation is charged with peril and one is reminded of Naipaul’s father, the intrepid journalist from ‘A House for Mr. Biswas’ whose favourite tagline was ‘…amazing scenes were witnessed…’.

Trinidad & Tobago Finance Minister, Winston Dookeran, addressed Parliament on the Finance Bill (No. 2) 2010 on Wednesday 24^th November.  It was a lengthy and detailed statement, which put things into a necessary perspective.  For me, it was important that Dookeran gave priority to the claims of the contractors and of course, the last item being the claims being made by the various groups representing Clico policyholders.

The Finance Minister held his position as set out in the 2011 budget, which was no surprise when one considers his statement that the various submissions received from the policyholders’ groups did not withstand scrutiny.  I only had two significant concerns in terms of outstanding items which require proper attention.

Financial Inspector Carl Hiralal too cosy with bankers he’s supposed to supervise

(click photo for large)

Shareholders, policy holders and citizens pay the price for trusting Hiralal

Sometimes things ARE as they appear.

An August 24, 2009 photo “Banking on Republic” in Trinidad & Tobago’s Newsday shows the happy Trinidad & Tobago Inspector of Financial Institutions, Carl Hiralal, having the honour of cutting the ribbon to open a new Republic Bank branch. (Oh, did we forget to mention that Clico owns 33% of the Republic Bank?)

The promotional message is clear: T&T’s Inspector of Financial Institutions is publicly declaring his approval of the Republic Bank and the bank personnel who appear with him in the photo: Derwin Howell, David Dulal-Whiteway, Gregory Thomson and Susan Williams.

There are other improper messages being delivered too…

When did CL Financial and CLICO actually collapse? Answer: Long before it was announced…

“Virtually $5.9Bn of CLICO Investment Bank assets seem to have vanished in a mere 13 months – a weekly rate of ‘withdrawal’ close to $105M”

In his latest article, our friend Afra Raymond makes a simple observation that other news media seems to have missed or deliberately ignored.

CL Financial bailout

The House on the Corner Part II: More insights into CLICO Investment Bank

by Afra Raymond

“The most pressing issue in the financial system is the CLICO fiasco…

…This fiasco was caused by reckless corporate governance and the glaring failure of our financial regulatory institutions…

…This crisis was caused by an absence of risk management, excessive borrowing internally and externally to fund high risk speculative investments, and wrong financial reporting…”

Finance Minister Winston Dookeran, speaking on the CL Financial bailout, during his inaugural Budget Speech on 8^th September 2010

The examination of CLICO Investment Bank (CIB) continues, based on the affidavits in the Central Bank’s winding-up action.

Firstly, as an overview, I consider the various versions of the accounts and their implications –

• CIB’s 2007 audit – Was performed by PricewaterhouseCoopers (PwC) as at 31^st December 2007, with the Balance Sheet showing Total Assets of $12.587Bn and Total Liabilities of $11.699Bn.  Please note that those accounts were unqualified – PwC gave a ‘clean’ audit to CIB at the end of 2007.
• CIB’s Management Accounts – As at 31^st January 2009, showed Total Assets of $12.264Bn and Total Liabilities of $10.692Bn.  Those figures are broadly in line with the audit figures 13 months earlier, at the end of 2007.
• Ernst & Young’s Statement of Affairs – As at 31^st January 2009, that showed Total Assets of $6.387Bn and Total Liabilities of $11.080Bn.  Virtually $5.9Bn of assets seem to have vanished in a mere 13 months – a weekly rate of ‘withdrawal’ close to $105M – leading inevitably to the estimated insolvency of $4.693Bn.

CL Financial – CLICO Investment Bank scandal. Inspector of Financial Institutions Carl Hiralal part of the cover-up.

Afra Raymond calls Carl Hiralal’s affidavits “disturbing”, “unbelievable”, “stunning”

The House on the Corner

by Afra Raymond

Some insights into CIB – CLICO Investment Bank

I am starting to look at the CLICO Investment Bank (CIB) and its operations, as revealed by the ongoing bailout.

CIB is a very interesting part of the saga, because even prior to the collapse of the CL Financial group there was a widely-held view that CLICO and CIB were parts of the group which were responsible for raising finance for their ambitious plans.  Even though the interest rates offered by CLICO and CIB were incredibly high – about twice the average offered by others – it would have been much more expensive for the CLF group to borrow those funds via loans.  The view was that the group had a legitimate method of harvesting funds on terms advantageous to them.

In April this year the Central Bank applied to the High Court to have CIB ‘wound-up’, due to its insolvency, estimated in that submission to be of the order of $4.7Bn.  That application to wind-up is being opposed by the NGC and the National Insurance Board (NIB).  Those matters are still before the Courts, which I only mention because the documents filed there give a disturbing insight into the CIB mystery.