The June 2009 agreement gave effect to the January 30 Memorandum of Under-standing which required that CL Financial sell assets such as Republic Bank, Methanol Holdings (Trinidad) Limted and CMMB in order to satisfy the statutory fund deficit of Clico. The shareholders’ agreement allows a government-controlled board “to take over the management and control of the assets of CL Financial” in order to, among other things, protect the interest of policyholders of Clico and British American and the third party depositors of CIB.” While the agreement allows for decisions to be made by a special majority of the CL Financial board, the sale of the group’s assets is not among the three decisions requiring such a majority. This means, according to a literal interpretation of the agreement, that the government can sell CL Financial assets without getting the consent of Duprey’s representatives on the board. CL Financial is supposed to comprise seven members—four representing the government and three representing Duprey, the group’s majority shareholder. There are now three government directors and two directors representing Duprey on the board.
Questioned on this on Friday, Yetming said that the spirit of the shareholders’ agreement was that a special majority would be needed to sell CL Financial assets. “If you need a special majority to pay a consultant under the agreement, you would need a special majority to sell assets,” he said. Responding to the government’s position, a source close to the CL Financial board described the shareholders’ agreement as being “crystal clear.” The source stated that those now in charge of CL Financial are “second-guessing the response of the CL Financial shareholders.” The source asked: “If Duprey holds the upper hand now as implied by all the talk, what incentive does he have to agree to strengthening the government’s hand?” Meanwhile, documents obtained by the Guardian have confirmed that Proman, the German project management company, agreed to reverse its controversial February 2, 2009, purchase of Clico Energy, the holding company for the CL Financial’s two ammonia plants and IPSL, the operator of the methanol companies.
Duprey sold the group’s 51 per cent stake in Clico Energy to Proman, which held the balance of shares, just days after the MOU through which the government committed to the billion-dollar bailout of Clico. Before it was sold, 17 per cent of Clico Energy was held by Clico and 34 per cent was held by other CL Financial entities. CL Financial’s entire block, including the 17 per cent Clico block, was sold to Proman for US$47 million. The Clico block was sold for US$15.5 million. In a letter to Clico dated February 1, 2010. Daniel Eggenberger, the president of Proman Holdings (Barbados), confirmed his company’s agreement to return Clico’s 17 per cent to the insurance company for US$15.5 million—the exact amount that it was sold for—along with a 17 per cent stake in Caribbean Petrochemical Ltd for a nominal sum. That agreement was substantially completed by the beginning of April, sources close to the process said.
