Moontown

MIXED PELAU RICE; MACARONI PIE

GARDEN FISH PIE; CINNAMON FRIED PLANTAIN

 HERB BAKED CHICKEN; ROASTED PEPPER PORK

FRIED DOLPHIN; GRILLED SWORD FISH

TURKEY STEW; CHICKPEAS AND VEG SAUCE

STEAMED MEDLEY OF VEGETABLES

TOSSED SALAD; COLE SLAW

Camini Marajh

Even as former executive chairman of CL Financial Lawrence Duprey was seeking Central Bank’s help to stave off financial ruin, his corporate secretary, Gita Sakal, was said to be paying out a dividend cheque of over $1 million to Clico Investment Bank as part payment on the $78 million loan facility.

According to the Central Bank lawsuit, Sakal, under cover of a letter dated January 19, 2009, headed ’2007 dividend-First Capital Ltd’ enclosed a cheque for over $1 million representing what she described as ’the dividend’ for the CL Financial year ended 2007.

Also in the lead-up to the January 30, 2009, collapse of CL Financial, Andre Monteil, on January 12, 2009 requested payment of his $21 million deposit held by CIB, which had matured in December 2008, along with a further US$3 million or TT$18.9 million deposit in Stone Street’s name.

He has so far been unable to cash his deposits.

The lawsuit, which seeks to remedy the series of transactions which left CIB with a $106.3 million liability on its books, accused Monteil of self-dealing. It said: ’The loan involved self-dealing by Monteil in that it was a transaction which benefited Stone Street, a company of which he was the controlling shareholder, director and chairman.’

‘no knowledge of proceedings’: Andre Monteil

It also cited as irregularities the following:

1. The loan was not authorised by CIB , whether by its board of directors or its members in general meeting, before its disbursement to CIB;

2. There was no proper disclosure to CIB by Monteil of his interest in Stone Street and the making of the loan, whether to CIB’s board of directors or its members in general meeting;

3. No proper due diligence in respect of the borrower or any security was carried our or required to be carried out prior to making an advance by way of loan;

4. No lending procedures appropriate to the loan were complied with, whether properly or at all;

5. No security for the loan was required or provided, prior to disbursement of the same;

6. No documentation appropriate to the loan was required or prepared by CIB, prior to disbursement of the same;

7. No valuation of the HMB shares was required by CIB to be provided by an independent valuer, nor was such valuation provided to it by such valuer, whether before disbursement of the loan or at all.

It held that both Monteil and Trotman were guilty of breaches under common law and the Companies Act. The action contends that the loan and its disbursement were not authorised by CIB and Stone Street was not entitled to the funds.

On the issue of the two First Capitals, the lawsuit said this: ’At all material times Stone Street has held and continues to be the beneficial owner of 337,269 CL Financial shares. Alternatively, if which is denied, the share transfer form dated 31.03.08 was effective to transfer its 337,269 shares to an entity named First Capital Ltd and that entity was and/or is the holder of any of the CL Financial share certificates, that entity was and remains First Capital, St Kitts. It neither was nor could be First Capital, St Lucia since that company was not incorporated until 04.07.08.’

The lawsuit held that at no time has First Capital, St Lucia, been the owner of any CL Financial shares. It contends that the CIB’s board of directors agreement to the ’transfer’ of the loan was given by the directors in breach of their CA (Companies Act) and CL (common law) duties. The High Court action cited:

1. The failure by Monteil to absent himself from the deliberations and decision in respect of the loan transfer given his personal interest in the transaction;

2. The failure to require or ensure, before agreeing to the transfer of the loan, that independent due diligence be conducted in respect of First Capital Ltd;

3. The failure to address the question of security whether adequately or at all.

Under fire

The board of directors of CIB

- Andre Monteil-former chairman)

- Richard Trotman-director (president and CEO)

- Amjad Ali

- Anthony Rahael

- Faris Al-Rawi

- Sheldon Branche

- Gita Sakal-corporate secretary

-Camini Marajh ((Trinidad Express)

Camini Marajh Investigative Desk

CARL Hiralal, the State-appointed manager of failed CLICO Investment Bank (CIB), has sued two former high-ranking officials of the bank claiming reckless and unlawful business dealings related to the financing of a controversial block of CLICO-owned shares in the Home Mortgage Bank (HMB) to Stone Street Capital, a private investment firm owned by Louis Andre Monteil.

The civil suit, filed in the Port of Spain High Court on Friday, names Monteil, the bank’s former chairman up until April 22, 2008, and Richard Trotman, former president and chief executive officer, CIB and two Monteil-incorporated firms, Stone Street Capital and First Capital Ltd, St Lucia, as defendants.

Hiralal, this country’s Inspector of Financial Institutions, is asking the court to return to CIB some $106.3 million, in addition to unspecified monetary damages sustained by the bank as a result of a 2007 Monteil-engineered loan transaction to his private investment firm, Stone Street Capital. The monies being sought represents the outstanding $78 million loan balance plus interest payments on the February 14, 2007, CIB borrowing issued to Stone Street.

In the unprecedented Central Bank action, filed by attorney Neal Bisnath, the manager of the State-impounded bank contends that Monteil and Trotman breached their directors’ fiduciary duties and ’failed to act honestly and in good faith with a view to the best interests of the company’.

He claims the $78 million loan paid out in December 2007 to facilitate Stone Street’s acquisition of Clico’s 43.8 per cent interest in HMB breached the bank’s internal control procedures and was nothing short of an act of ’self-dealing’ by former bank chairman Monteil, who was also group financial director of CL Financial and chairman of the HMB.

ACCUSED OF WRONGFUL ACTIONS: Andre Monteil

Hiralal, who was appointed manager, CIB, following the financial collapse of the CL Financial Group in January 2009 held that: ’Monteil’s conduct as a director was not honest by the ordinary standards of a reasonable and honest director’ and that the loan and its disbursement were ’highly irregular’.

The lawsuit accuses Monteil and Trotman of a series of wrongful actions in breach of their fiduciary duty. It also takes the entire CIB board of directors to task for mishandling the situation and breach of fiduciary duties on several counts, key among them, the failure of the board at a meeting of the board of directors on June 22, 2007, to ensure that the loan was fully secured.

’At the time of the CIB board meeting on 22.06.07, the irregularities and related breaches continued,’ according to Hiralal, adding that no due diligence was ever undertaken of the HMB shares. The lawsuit also accuses CL Financial’s former executive chairman Lawrence Duprey of imprudent behaviour and a breach of his duty of care.

Specifically, the Central Bank action, in detailing Monteil’s secretly-brokered debt for the CLF share swap arrangement with Duprey, first reported in March 2009 by the Sunday Express, accuses Duprey of misrepresenting material facts related to his subsequent acquisition of the $78 million loan.

The lawsuit cites a promissory note, dated February 14, 2007, signed by Duprey, which purports to represent the $78 loan facility. The suit contends that the Duprey promissory note ’is a fabrication and was dishonestly procured by both Trotman and Duprey’, and further that ’it was not written on the date it purports to have been written’.

Of the Trotman letter, also dated February 14, 2007, and its attempt to create a new loan profile for the 2007-CIB issued loan, this time to Duprey’s privately owned company, Dalco, the lawsuit says:

’1. It is a fabrication and was dishonestly procured by both Trotman and Duprey;

’2. It was not written on the date it purports to have been written in that it is typed and signed by Trotman and countersigned by Duprey on notepaper created after April 22, 2008, when (Mervyn) Assam was appointed a director and chairman of CIB;

’3. No offer of facility therein purportedly confirmed was made by CIB to Duprey, whether on February 14, 2007, or at all and/or no such offer was authorised by CIB.’

Origins of the HMB transaction

The High Court action that seeks to recoup depositors’ money from the failed CL Financial-owned investment bank details the origins of the scheme, which saw a Clico deposit of $100 million going into CIB on February 15, 2007, one day after CIB paid out a $78 million cheque to Clico, signed by Trotman and another CIB director.

The lawsuit contends that $78 million of the $110 price paid for Clico’s HMB interest by Stone Street was ’indirectly financed by Clico itself’ since CIB did not at that time have the funds to finance the loan acquisition.

Also on February 14, 2007, Monteil’s private firm Stone Street Capital deposits $21 million in CIB (purportedly security for the loan). On March 28, 2007, two cheques related to the transaction are drawn in favour of Clico: the first, an FCB cheque for $28 million; and the second, $2 million from a company named Spreadeagle Co Ltd.

On March 15, 2007, Monteil sets up the first of two offshore companies called First Capital Ltd, this one in St Kitts.

On June 22, 2007, the CIB board of directors agrees to advance the loan facility to its chairman who absented himself from the room for this part of the meeting. According to the board minutes of that date:

’The board considered and approved the granting of a secured credit facility as detailed in an investment note, in the amount of $78 million to Stone Street Capital to facilitate the acquisition of shares in the HMB. The facility is fully secured by the hypothecation of Certificates of Deposit held at the bank as well as a pledge of the shares acquired.’

The suit said the CIB board purportedly then sought to ratify the loan and its disbursement.

A CIB Board Investment Committee records this:

1. An approach by Stone Street for a $78 million loan for the acquisition of HMB shares;

2. Stone Street was controlled by Monteil, a director of both CIB and CL Financial;

3. Funds for repayment would come from dividends and interest to be received on Stone Street’s investments as well as the proceeds of sale from other investments including real estate;

4. Stone Street proposed to purchase HMB shares from Clico, ’the Clico shares (being) valued at between $105 million and $120 million’;

5. A proposal that ’we’ finance 70-80 per cent of the acquisition cost by way of a loan of $78 million.

On December 20, 2007, three agreements purportedly made on behalf of CIB followed: the loan agreement, the charge of HMB shares and the charge of Monteil’s $21 million deposit.

Monteil signs off the loan agreement as the borrower behind Stone Street, Trotman signs for the bank.

The agreement contains several provisions, among them, an undertaking by Stone Street not to dispose of any assets without the prior consent of CIB.

On March 34, 2008, Trotman signs off on a letter entitled ’Reorganisation of term loan’, which confirms CIB’s consent to the ’assignment and transfer’ of the loan to First Capital, St Kitts, which he describes as a ’wholly owned subsidiary of Stone Street’.

He describes the assignment and transfer of the loan this way: ’Meant to facilitate rationalisation of Stone Street’s affairs and cash flows’.

Trotman also confirms that CIB has no objection to the substitution of Monteil’s 337,269 or 4.5 per cent interest in CL Financial to replace the ’current collateral package’.

Stone Street transfers its 4.5 per cent share interest in CL Financial to First Capital on March 31, 2008, short weeks before Monteil calls it quits at CIB. Both Monteil companies list the same Maraval address, his home.

On his way out of CIB, chairman Monteil at his last board meeting on April 22, 2008, takes part in the board deliberations, which approves the loan transfer from Stone Street to First Capital ’subject to all legal requirements being met’.

According to the board minute, Assam entered the room at 7.45 a.m. and was installed as chairman some 45 minutes after the meeting was convened.

Weeks later, on April 11, 2008, CL Financial cancels the share certificates in the name of Stone Street.

New share certificates are issued to First Capital Ltd. The certificates fails to disclose that First Capital is an overseas company.

On July 4, 2008, Monteil sets up First Capital, St Lucia. Both companies of the same name carry the Maraval address.

On July 25, 2008, four agreements were purportedly made on behalf of CIB, namely an Amended or Restated loan agreement, a deed of charge relating to the 337,269 CL Financial shares, a deed of release relating to the HMB shares and a deed of release relating to Monteil’s $21 million deposit.

The agreement is largely in the same terms as the Stone Street loan agreement but with changes reflecting an intention to switch the borrower on record and the security held.

The group’s corporate secretary, Gita Sakal, and Trotman sign the deed of release for the HMB shares.

On August 4, 2008, CIB releases the share certificate over the seven million HMB shares to Stone Street, paving the way for Monteil’s sale back to the National Insurance Board for $130 million.

On August 25, 2008, Monteil enters into a ’share transfer certificate’ arrangement with Duprey, swapping his 4.5 per cent CL Financial stock in exchange for his bank borrowings at CIB.

The loan to First Capital, St Lucia, was however, not recorded by CIB in its accounting records until September 2008 and even then, according to the lawsuit, was erroneously recorded in the name of Stone Street.

This error was only corrected in December 2008. (Trinidad Express)

Kristy Ramnarine and Camille Bethel

PRIME Minister Patrick Manning says he is on his way out of politics.

His statement came in response to a question posed by the Sunday Express asking him to confirm whether or not he told various People’s National Movement (PNM) executives during the past four days of screening that he had not intentions of remaining in politics beyond the age of 69.

With a broad grin on his face, Manning who will turn 65 on August 17 said: ’The minute you hear a statement like that you could be sure it did not come from me. I will not call an age, my lady. I said no such thing.

’I did in fact say to executives that, I am really on the way out and what we are in fact doing among other things, is ensuring that there is a proper crop of politicians in the PNM who can carry on after those of us who are present have gone. We started that two years ago, really.’

Manning, who has served as Member of Parliament for the San Fernando East constituent since 1971, insisted that the party was not out of touch with its members.

’There is never loss of touch, my lady,’ he said.

’I shall tell you that we have been meeting with all constituencies since October last year. Six officers of the constituency and other categories of managers, we’ve been meeting them every month since October of last year. So the question of out of touch is not there nor is the party out of touch with the electorate because every constituency has doing walkabouts and cottage meetings. You’ve been seeing me doing it, but I am not the only one doing it, everybody has been doing it. In fact I have done about 10 so far, there are some representative who have done, 18, 19, so we not out of touch.

’In the selection of candidate exercise, you always have a choice and if several people come before the screening committee, we can only select one, there can only be one candidate. And if you select one candidate you will expect some disappoint from other who had been aspiring to it. So that is quite normal is just that we don’t allow these things to spill over, that’s all.’

Meanwhile, speaking to the media at the opening of a park in his constituency yesterday, Manning said the election date would be announced ’in due course, in due course we will say it, it is not long again.’. He also said yesterday that his Government was confident that by the time the new Parliament reconvenes, the Local Government legislation, which is yet to be passed, will be fully ready.

’And we are confident we will be able to bring it on time,’ he said.

He said because of a tight time frame, the Local Government elections will now have to come after the general election.

On April 8, Manning advised President George Maxwell Richards to dissolve the ninth Parliament, one day before an Opposition motion of no-confidence was scheduled to be debated in Parliament.

The dissolution of Parliament now calls forth an early general election which must, in accordance with Section 69 of the Constitution, be held within three months after the dissolution of Parliament or by July 9.

When asked to comment on statements that the country was now in auto pilot, Manning said:

’What is meant by that? That is very disrespectful of the Prime Minister, and I’m the one in charge… I go to work every day. I’m not like others you know, I go to work every day and I don’t drink on the job, in fact I don’t drink at all.’ (Trinidad Express)

Kristy Ramnarine kramnarine@trinidadexpress.com

Members of the People’s National Movement (PNM) Mayaro executive walked out of Balisier House shouting in anger yesterday after nominee Clifford Campbell was not selected by the party’s screening committee.

The rowdy bunch criticised the screening committee for asking them to bring other nominees to the table on Tuesday. Mayaro was the seventh constituency to meet with the screening committee yesterday. Campbell is one of the two persons nominated for the Mayaro seat. The other is Alderman Arvin Moonan who was out of the country and did not show.

’Manning should not do we that. We want Campbell. We going to bring him back on Tuesday, we don’t want anyone else,’ said one of the female executive members as other members of the executive shouted in support.

’Is Deborah Thomas Felix, Manning want, but we don’t want she. If they don’t take Campbell we go vote for Kamla.’

In an interview with the Sunday Express following his screening, Campbell said: ’The screening was very well actually, very well. It was much shorter than my last screening. It went pretty well for me…The executive of Point Fortin was also upset that none of its nominees, including incumbent Foreign Affairs Minister Paula Gopee-Scoon, were screened yesterday.

STILL NO DATE: Prime Minister Patrick Manning leaves Balisier House, Port of Spain, yesterday. -Photo: STEPHEN DOOBAY

An angry executive member Maximus Trotman said there was a split in the executive. He said 12 out of the 20 executive members who were present were in favour of nominee Nigel Minors, the Team Leader of the International Business Unit at Lake Asphalt, instead of the incumbent.

Gopee-Scoon said: ’We were not screened, very unfortunate. Obviously there was a discussion upstairs with the executive. It must be a question of consensus or some sort of disagreement. I didn’t try to find out but we were told that we would have to come back for screening on Tuesday.’

Other incumbents, La Brea MP Fitzgerald Jeffrey and Princes Town MP Peter Taylor were also screened but a decision is yet to be taken by the screening committee on whether they will return to contest their respective seats.

Prime Minister Patrick Manning told members of the media outside Balisier House that he believes the party’s screening will go beyond Tuesday.

When questioned about the concerns of the Mayaro and Point Fortin executives, he said: ’We just have some issues with the executive in the constituency of Point Fortin and we’ve asked them to go back and settle certain things before they come back to us.

As for his alleged favour of chairman of the Securities and Exchange Commission, attorney Deborah Thomas Felix, Manning said: ’I am not seeking anybody. The political leader is chairman of the screening committee. I screen whoever comes before me.’ (Trinidad Express)

by CHERYL HAREWOOD

SAME-SEX relationships between females at secondary schools across the island are causing authorities great concern.

According to reports, the problem has gotten so out-of-hand during the past two to three years, that some principals and teachers have had to find ways to protect first and second form school students from being pounced upon by older students who seek to recruit them into their circles.

Marcia Weekes, a counsellor who works with several schools told the SUNDAY SUN: “It is horrible at one of the older top schools, where girls make out in front each other - even on the corridors.

“Most of these are fourth and fifth formers. What is more of a concern is that they are aggressive, operate in groups, stick together and recruit younger students.”

Teachers from both older and newer secondary schools have also brought their concerns to the fore.

A senior teacher at an older secondary school said the problem was further escalated at some schools by female teachers who themselves were into these types of relationships.

“This situation has gotten worse within the last three to four years, even among some teaching staff. Many of the female janitors at the schools are aware of the situations. They know what goes on in the toilets,” he lamented.

“One reason I believe is that the girls are being told not to get pregnant, and so are doing their own thing among themselves,” he added.

He said the growth of this type of behaviour started as long as ten years ago, but was now more prevalent.

“I’ve always felt that there is a higher incidence of lesbianism than homosexuality period, and this is the evidence,” he said.

Deputy Director of the Child Care Board, Denise Nurse, said her organisation was aware of the concerns of principals and teachers.

“We are aware of the growth of these forms of relationships, and yes, something must be done.

“It becomes a form of child sexual abuse, especially since a lot of women are also encouraging young girls to have relationships with them”.

Nurse said parents must “stop giving their children so much freedom” and watch who they kept company with.

“When they say they are involved in an activity at school, they must find out what it is all about and who is involved. It is equally important also that they talk to them about their caretakers - teachers, coaches and watch their body language when they speak about these persons.

“Check up on them, search their belongings, you’re entitled to do that,” she advised.

“They also need to look for signs. Many times, signs are there, but parents turn a blind eye . . . watch how their voices are lowered when they are on the telephones,” she added.

Nurse also called on parents to better supervise their children, to get involved in their lives and activities, teach them what was right and wrong about sex and how to be safe, and to encourage them when they did well.

“We teach our daughters how to be careful with men, but we must also teach them about being careful with women, and how to have a high self-esteem . . . .”

Acting Chief Education Officer Laurie King said they had not received reports from principals on this matter. (Nation News)

by WADE GIBBONS

STAY THE COURSE!

That is the advice concerned agents are offering to CLICO International Life Insurance Limited policyholders, who might be opening up themselves to considerable risk by abandoning their policies.

The SUNDAY SUN sat down with several senior agents of the company who collectively have over 100 years of experience, commitment and service to CLICO and especially their wide cross-section of clients.

The company is currently going through the throes of financial difficulties. But the agents all gave assurances that not only would CLICO rebound successfully, but that policyholders were completely safe with an institution that has been one of the most successful in Barbados and the Eastern Caribbean under the management of executive chairman Leroy Parris.

Special agent John Collymore advised policyholders who had coverage - whether for disability, sickness, death or other peril - not to be swept away by panic and cancel or cease paying their policies since it would leave them “wide open to catastrophic risks”.

Cost factor

“Another thing of paramount importance is that persons would have had insurance for several years. By the time they go to apply to another company to take out a new policy, chances are there might be health challenges that they have and they might not be insurable. Secondly, there is the cost factor, because you would have progressed in age and the cost to you will be much higher,” he explained.

Collymore stated that since the CLICO saga started he had been keeping up-to-date records, and it was interesting that in The Bahamas, CLICO policyholders continued to make their payments despite the insurance company’s collapse there. CLICO is under liquidation in The Bahamas.

“If people in The Bahamas see the necessity to maintain their premium payments, what we want to do in Barbados is to let our people know that we are neither under judicial management nor in liquidation. But it is for their benefit and their families’ benefit that they maintain premium payments that under the Insurance Act of Barbados are protected. CLICO is not insolvent,” Collymore stressed.

Highlighting the strength and resilience of CLICO’s Barbados operations, Collymore said the records showed that since January 30, 2009, when events with CL Financial unfolded in Trinidad and Tobago, Barbados had held its own among the other competitors.

He added that as events further progressed, people were still purchasing insurance even more than before. He explained that prior to the company being barred from writing insurance, the figures showed that CLICO was on track to having an outstanding year.

CLICO sold approximately 800 policies in just two months prior to the decision of the Supervisor of Insurance.

Special agent Leroy Harris said that one of the critical things which policyholders might not be aware of was that once an individual was insured by a company, whether one left that company or not, as soon as you applied to another company it was incumbent on the policyholder to declare whether he or she had prior or existing insurance.

He added it was at this stage that the second company could determine whether one was a good or bad risk.

Harris noted he and his colleagues were overwhelmed that many of their clients were calling to find out how the agents were faring in the prevailing situation, and were not seeking to be negative in their relationship with them. He said the majority of their clients had indicated they would not leave CLICO.

Special agent Fabian Bishop said he was heartened CLICO agents were still getting calls for business. In some instances, he indicated, people were querying whether they could acquire additional policies when “everything is settled”. He noted requests for medical, mortgage and life insurance were still coming in daily.

Bishop stated that contrary to political comments and suggestions, there were hundreds of people with policies who had no desire to cancel them. He said the agents were the “soldiers” on the frontline dealing with clients and were aware of the confidence that people still had in the company.

Confidence of investors

Special agent Hortense Trin-Gaskin said one of the key issues in the entire scenario was the confidence of investors and policyholders. She explained that once they understood that claims, maturities or surrenders would be paid, they had no problems.

She attested to the fact that CLICO was paying claims and that she had delivered a sizeable cheque to a client during the week. Several of the agents present also revealed that they had been delivering claim payments to the satisfaction of their clients.

Financial and insurance specialist Pearson Bovell noted, however, that there would be bottlenecks in terms of payments from time to time.

He explained that payments could only be generated based on cash flow and the volume of the claims at the time. He said CLICO had no control over the volume of claims. He added if there were a lot of sickness claims or maturities, there would be situations when the company would need time to deal with each claim in a structured manner.

“This is not unlike any other financial institution. A bank would have the same situation, but the money is assured. This is not a CLICO thing. This is an industry norm. Yes, there will be delays in payments because everybody wants their money now. No matter where you are in the world or whatever type of company it is, and everybody wants their money now, it would be impossible to give everybody the same time.”

Bovell said monies taken from depositors would have flowed into investments (assets) that generated consumer loans, mortgage loans, real estate and other business acquisitions as local regulations permitted. In these circumstances, he added, any such institution might require time to systematically sell down some of its assets to generate additional cash in order to settle such significantly high and unexpected requests from clients for termination of investments.

The agents, en masse, expressed deep disappointment that the CLICO issue had been used in Barbados as a political football. They stressed CLICO was important to the economy and to the social fabric of the country and rather than politicians seeking to score personal political goals, they should have been circling the wagons around the company in the interest of Barbados.

The agents all agreed that some public comments appeared to engender panic and sensationalise the entire situation. This, they said, often resulted soon afterwards in a significant run on the company by policyholders.

Came together

They said that in other Caribbean jurisdictions the opposition, government and other stakeholders came together and encouraged people not to panic. They said these parties in those countries understood the need for a calm approach and the ripple effect that panic could cause to their economies.

Collymore said that the strength of CLICO could be seen in the fact that despite its challenges - paying out $118 million to policyholders and the run on the company - its doors remained opened, and it still continued to do business.

Bovell suggested that in an unusual circumstance, there was nothing wrong with people looking for unusual ways to fix the prevailing problem. He said solutions to the situation could be found from within the precincts of knowledgeable policyholders, agents, other industry players and the wider society. (Nation News)