Maroc - NEWSDAY.CO.TT - A la Une - 18/Jan 18:31

Central Bank seeks to postpone CL Financial hearing

THE Central Bank has asked the High Court to postpone the continuation of its long-running lawsuit against former directors of CL Financial and its former chairman Lawrence Duprey after the government laid the long-awaited Clico commission of enquiry (CoE) report in Parliament. In an e-mail sent to Justice Robin Mohammed ahead of a January 18 scheduled hearing, attorneys for the Central Bank said the report, known as the Colman Report, was laid in Parliament on January 16, 2026, and required careful review to determine whether it has a bearing on the case. The matter, filed by the Central Bank in 2011, concerns allegations arising from the collapse of Colonial Life Insurance Company (Trinidad) Ltd and other entities within the CL Financial group. In the e-mail, attorney Elena Araujo said the claimants intend to apply for leave to postpone the trial when it is called, seeking an adjournment to January 26. She said the additional time would allow the Central Bank to review the report and obtain advice on its implications for the ongoing proceedings. “We wish to advise that … the claimants consider it prudent to review the Colman Report and to seek advice on whether, among other things, the report has bearing on the instant proceedings,” Araujo said. In a press statement on January 17, the Central Bank acknowledged comments made by the Attorney General during the parliamentary sitting on January 16, and confirmed it is reviewing the document. The bank said the report was “voluminous,” spanning 676 pages, and said it is carefully considering its full contents. “The Central Bank is admittedly concerned that the process is such a protracted one,” the statement said. “The bank is giving its independent consideration to the wider implications for the ongoing litigation matter against former officers of the CL Financial group.” The Central Bank added that it would provide further information “as and when appropriate.” The lawsuit, filed in 2011, is one of several legal actions stemming from the collapse of Clico and CL Financial, which triggered a government bailout. Speaking in the Parliament, Attorney General John Jeremie said the State spent an estimated $28 billion rescuing CL Financial and its subsidiaries. An additional $3 billion to $4 billion was incurred in legal, accounting and administrative expenses linked to the collapse, imposing what the report described as a significant and long-term burden on public finances. [caption id="attachment_1203121" align="alignnone" width="333"] Former Clico Investment Bank chairman Andre Monteil. -[/caption] According to the report, State intervention became unavoidable following CL Financial’s collapse in 2009 in order to avert a wider financial crisis. Jeremie told Parliament that despite more than a decade of investigations and the payment of hundreds of millions of dollars in professional fees, no criminal charges have resulted. This, he acknowledged, was the remit of the Director of Public Prosecutions. He also revealed that the commission of enquiry itself cost taxpayers approximately $150 million, covering the fees of the late sole commissioner, Sir Anthony Colman, and supporting legal teams. The Attorney General said the State could no longer justify the continuation of costly civil proceedings that have failed to deliver meaningful outcomes. He announced his intention to bring those actions to an end in a cost-effective manner. The report found that in the case of Clico and its related companies, the government committed billions of dollars through cash injections, guarantees, asset purchases and long-term financing arrangements to protect policyholders, depositors and the stability of the financial system. It noted that the liabilities assumed by the state ran into tens of billions of dollars, significantly increasing public debt and severely restricting fiscal space for other national priorities. The report concluded that the scale of the bailout constrained government spending on infrastructure, social services and economic development for years, while exposing serious weaknesses in regulatory oversight and enforcement. The CoE was appointed in 2010 and completed its work in June 2016. Instead of being laid in Parliament at that time, former prime minister Dr Keith Rowley directed that the report be forwarded to Director of Public Prosecutions Roger Gaspard to consider whether criminal charges could be pursued. Jeremie said the report detailed extensive evidence, including millions of e-mails, forensic accounting records and more than 1,600 boxes of documents. However, he questioned how such a vast and complex financial collapse could be effectively investigated given limited investigative resources, minimal police staffing and the absence of clear outcomes. The decade-old lawsuit against Duprey and five others began on January 6, before Justice Mohammed at the Waterfront Judicial Centre, Port of Spain. Dozens of witnesses are expected to testify over the month-long trial. Civil proceedings were filed against Duprey, Andre Monteil, CL Financial, Dalco Capital Management and Stone Street Capital Ltd – companies with which both men were affiliated – as well as Gita Sakal, a former CL Financial corporate secretary. The claims arise out of the failure of Clico, which led the Central Bank to exercise its emergency powers under section 44D of the Central Bank Act in relation to the insurance giant. The lawsuit alleges that Clico’s operations were “grossly deficient,” asserting that the interests of policyholders and mutual fund investors were used to fund personal needs and lifestyles, as well as private companies. The proceedings were initiated in 2011 against the five, seeking what could amount to billions of dollars. Duprey, who was 89, died on August 24, 2024. The lawsuit calls on Duprey, Monteil and Sakal to explain how the conglomerate failed, resulting in the loss of millions of dollars in investments by policyholders and investors and threatening the stability of the national economy. They are accused of mismanaging Clico and of misapplying and misappropriating the company’s income and assets, to the detriment of policyholders and mutual fund investors. The lawsuit, which was amended in 2013, claims several billion dollars in losses, as well as damages and restitution. The Central Bank and the government took control of the conglomerate and its banking and insurance subsidiaries in January 2009, after Duprey sought a bailout when the liquidity problems at Clico and Clico Investment Bank (CIB) became public. Almost immediately, the group faced a wave of policyholder lawsuits stemming from its inability to pay claims as they fell due. At the time, Clico was said to be burdened with policyholder liabilities exceeding $12 billion. CL Financial then controlled more than $100 billion in assets across at least 72 companies operating in 32 countries worldwide. Its interests spanned several sectors, including banking and financial services, energy, real estate, manufacturing, and distribution. In the months following the bailout, the financially stricken Clico reportedly absorbed more than $5 billion in taxpayers’ money. Towards the end of 2008, after determining that there was a significant deficit in Clico’s statutory fund in 2007, the Central Bank reportedly became concerned about the fund’s condition and contacted company officials. Clico was described as a “cash cow” and the “cash engine” of CL Financial. The lawsuit further alleges that there was no proper governance of Clico, CL Financial or CIB. An Ernst & Young report noted that CIB “would have probably been deemed insolvent in 2007.” Testifying at the start of the trial former Central Bank governor Ewart Williams.   The post Central Bank seeks to postpone CL Financial hearing appeared first on Trinidad and Tobago Newsday.