(Trinidad Express) – Shareholders of cash-poor CL Financial on Wednesday voted overwhelmingly in favour of the newest plan to rescue the conglomerate and save tens of thousands of insurance policy-holders and depositors.
Fewer than 30 of the 300-plus shareholders of the Port of Spain-based conglomerate voted in person at a two-hour special meeting held at CL’s Queen’s Park Oval, Port of Spain, hospitality suite.
But their ballots, as well as others by proxy, carried an almost unanimous 98 per cent positive vote for the seven-member board of directors to rescue the real estate and insurance giant from financial ruin.
Government and CL Financial-appointed chairman Dr Shafeek Sultan-Khan confirmed to reporters after the meeting that shareholders voted in favour of three resolutions. He admitted there was substantial work to be done to complete the restructuring of the conglomerate, which operated in 32 countries and owned more than 70 companies, including CLICO-the country’s largest insurer.
“There’s big debt,” Sultan-Khan said, adding that the restructuring exercise would not be a short process since CL Financial was such a big conglomerate and spread across so many countries.
Shareholders voted 97.7 per cent in favour of the agreement between CL Financial and Government, for the State to divest some CL assets in return for a multi-billion-dollar cash injection to save the group’s subsidiaries. The second and third resolutions approved the recently-installed board, led by Sultan-Khan, and authorised the restructuring exercise to rescue the conglomerate. He took over last week as chairman, after former Central Bank governor Dr Euric Bobb stepped down. Bobb remains a CL director and chairman of CLICO.
A few shareholders raised concerns about the plan and they were addressed, Sultan-Khan said.
What the result of the vote means is that the board has been properly constituted according to CL’s Articles of Association and now, “we can get on with the restructuring”, he added.
“Beneficiaries, policy-holders and employees can now breathe a sigh of relief,” Sultan-Khan said, adding that the directors had the interests of the regulator, Government, employees and taxpayers in mind.
The board was officially approved by shareholders effective Wednesday and includes career banker Steve Bideshi, English Queen’s Counsel Andrew Mitchell, current director Michael Carballo and businessman Steve Castagne among others. They will serve as directors for two years.
The first step now is to formulate a strategic plan to restructure CL Financial’s operations in Trinidad and Tobago, as well as in other countries across the region.
Sultan-Khan said he had already spoken to St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves on issues related to CL subsidiary operations there. He would not say how much of the $1 billion in cash given by the Central Bank to help CL subsidiaries was used.
The Central Bank has said it will take another $4 billion to support policy-holders and depositors at CL Financial subsidiaries.
A small group, led by minority shareholder Kirk Carpenter, a relative of former CL chairman Lawrence Duprey, objected last month to the plan, saying their interests were not properly represented. Carpenter was present at the meeting on Wednesday but left around 5 pm.
A long-time shareholder, Andre Garcia, told the Express after the meeting that he approved the plan.
“I have the confidence in the government, and they have a responsibility to shareholders and taxpayers,” he said.
“I think it is a good plan going forward.”
It is difficult to say how long it will take to rescue CL Financial, Sultan-Khan said.
“We have to dig deep. There is a big job to do and the government has injected a lot of money, but the shareholders and the government have given us a vote of confidence,” he said.