Saturday 19 October, 2019

Probes ordered into CL Financial

Finance Minister Colm Imbert fields questions from the media at the Post Cabinet media briefing on Thursday, August 3, 2017. Photo: The Office of the Prime Minister

Finance Minister Colm Imbert fields questions from the media at the Post Cabinet media briefing on Thursday, August 3, 2017. Photo: The Office of the Prime Minister

An investigation is expected to be conducted into the transfer of Dalco Capital Management shares formerly owned by once major shareholder in CL Financial Lawrence Duprey to Carlton Reis.

The lone speaker at Thursday’s Post Cabinet media briefing, Finance Minister Colm Imbert said there is no record of stamp duty being paid on the transaction.

Imbert also revealed that provisional liquidators appointed by the Court will also seek to determine how profits from Angostura were distributed following revelations by the Prime Minister last week that profits were being sent to a company in Scotland.

Regarding audited financial accounts for the past eight years, the Minister explained that they were simply not available before 2015. He said there was no attempt made by the previous administration to remedy that situation.

"What we did when we came in, we decided that it was an unacceptable situation, so that this administration, this PNM government, instructed its Government directors on CL Financial to start preparing audited accounts."

Draft audited accounts up to 2015 have been produced and are in the process of being finalised by auditors, which Imbert promised would be made available to the public as soon as they are prepared.  

Refuting allegations made by former minster in the Ministry of Finance Mariano Browne, Imbert said accusations that the State is claiming in excess of $3.5 billion in fees from the CLICO/CL Financial bailout is a “reckless untruth”.

According to a tally of fees expended on accountants, lawyers, and forensic personnel locally and internationally, close to $250 million has been paid to these groups since the beginning of the CLICO bailout, which accounts for less than ten percent of the figure quoted by Browne.

Of the funds expended, more than 80 per cent was incurred during the 2010-2015 period.

"Somehow the phrase financing costs, fees and other costs was compressed into fees...It's there in black and white. So this figure of $3,2 billion is a fiction, it's a fabrication, it's a figment of the imagination of these shareholders and their mouthpieces."

"The actual figure, as I said, is actually closer to $250 million, of which over $200 million was spent by another administration." 

Imbert cautioned the former minister, stating he “should know better and should not make these reckless statements which are not based on facts.”

 

Valuation of Tobago lands

Imbert rubbished speculation that Government was attempting to acquire lands owned by CL Financial at a fraction of its worth.

He explained the process involved in Government’s acquisition of the controversial Buccoo Estate (No Man’s Land) in Tobago.

Shareholders submitted a report to Government called Project Rebirth where they listed the value of lands in Buccoo Estate, Tobago at $960 million and the Golden Grove Estate, Tobago at $867 million dollars. It was later discovered that the figures presented in the report were not based on any valuation.

In 2014, Home Construction Limited engaged a very reputable real estate company called Terra Caribbean to do a valuation report on the 147 acres at Buccoo Estate and the company listed the market value for the property at $75 million.

Imbert further explained that a valuation of another parcel owned by CL Financial, the Golden Grove Estate, was conducted by the Central Bank through local firm G. A. Farrell and Associates Limited.

Assuming that the land would be used for an integrated resort development, the valuators based the valuation on the highest and best use of the lands.

G. A. Farrell and Associates produced a valuation of the Golden Grove Estate of $170 Million dollars in the middle of 2016.

Another valuation was conducted by the Central Bank through international valuation firm Duff & Phelps, which has vast experience conducting valuations throughout the world.

This company valued the Golden Grove Estate, which includes the sewer lands (excluded in the Farrell valuation), at $174.8 Million in February 2017.

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