(Trinidad Guardian) Dr Bhoe Tewarie—who served as a director for 14 years at the Lawrence Duprey-helmed conglomerate—sought the confidence of Central Bank Governor Ewart Williams.
The meeting took place on December 23, 2008—a month before the Central Bank and the Government intervened to save CL Financial subsidiaries, Clico, Clico Investment Bank and British American. “I wrestled a lot with myself on what to do about it,” said Tewarie, as he gave evidence on the fourth day of the fourth evidential hearing at the Clico Commission at Richmond Street, Port-of-Spain.
Tewarie’s intent was to alert Williams but was told he was already aware and was “on top of the situation.” And even though the meeting was “candid and mutually-appreciated” Tewarie told the CoE that he never disclosed to the CLF board that he met with Williams. His decision to seek an audience with the Governor was because “I felt the chairman would not give a true picture of what was going on. I felt the Central Bank Governor needed a clearer picture.”
Tewarie said he sought out Williams because he “no longer had confidence in the chairman, Mr Duprey, or the board” to salvage the company or to meet the challenges. “I did not know who to believe, what to believe or who knew what,” he said in his witness statement. “I told the Governor that I was concerned about what was happening and I am not sure that the chairman’s interpretation of the reality is the reality I see. I expressed the view to the Governor that the Central Bank should become more involved in the affairs of CL Financial because it was not only CL Financial that was at risk and all the people who had their investments there but also the entire financial system could be under threat,” he said.
Tewarie said he was advised by Williams to stay on the board “to contain the chairman.” But Central Bank counsel Bankim Thanki QC, told Tewarie during his cross examination that Williams had no recollection of asking him to stay on the board. Tewarie insisted that such a conversation took place but may have been during telephone contact. “I understand your recollection. It may be your recollections differ,” Thanki told Tewarie.
Director’s Duties
Tewarie was taken to task during cross-examination on his duties as a CL Financial director with comparisons being made to his performance in his other directorships. His responses to questions posed to him were often “surprise,” “shock,” “ I don’t know” or “I can’t remember.”
He admitted that he was unaware that so many CLF companies were non-performing, only discovering details of the company, as well as remuneration, from newspaper reports on the CoE.
He said decisions only came to the board after the fact and that many were done outside the jurisdiction of T&T.
“Did you ever investigate how subsidiaries were obtained?” asked Peter Carter QC, counsel to the commission.
“I don’t know about investigate. Concerns were raised from time to time,” he said.
The almost US$700 million Lascelle de Mercado acquisition, he said, came to the board as a done deal and the board eventually learnt that “it was a company that was over-paid for.” He said when he raised the issues of inter-company borrowing he was often told by Duprey that he did not understand the “business model.”
“Did anyone raise the question of how the group got in this position in the first place?” asked Commissioner Sir Anthony Colman.
“No, I don’t remember that,” he said. He said he went to CLF’s last annual general meeting because he felt it was his responsibility to do so.
However, he was surprised when the meeting was chaired by Carballo and the chairman did not turn up. “I felt isolated,” said Tewarie.
He said he was wary of expressing his doubts about the financial health of the company because he didn’t know what would happen and did not want to start a “run” on the company.
“How did you react to the dividend,” asked Carter.
“I wasn’t certain how to respond. It was done,” he said. Tewarie said he never received a dividend cheque for his 1,171 CLF shares. But cognisant of liability as a director, Tewarie sought legal advice after the MOU was signed.
He disclosed this at a board meeting on April 3, 2009- when his resignation was confirmed. Among those present were Lawrence Duprey, Michael Carballo, Anthony Fifi, Clinton Ramberansingh, Rampersad Motilal, Roger Duprey and Tewarie.
Tewarie informed them that Clico and CLF were separate legal entities but that did not make CLF directors immune from prosecution in a court of law.
The board minutes read: “He is very concerned that CLF directors have no legal representation on the board to advise them of their liabilities.
His attorney advised him of the possibility of a sequestering order over personal assets and the risks involved in the present situation.”
It continued: “The members agreed with Dr Tewarie’s position and it was agreed that the secretary make arrangements for Russel Martineau SC to be present early next week to give clarification and direction to members. The chairman informed the meeting that he is familiar with a Canadian firm of attorneys competent in all disciplines who he recommend the board give consideration to offering a retainer to advise on liability, valuations and CBTT issues. The board confirmed that one of the issues with the CBTT if the element of mistrust. There is a feeling/perception that CLF by its chairman is selling assets in breach of the MOU.”
CLF’s trinity
By his own admission yesterday, Tewarie said he was unaware of the internal workings at CLF which was run by a “trinity” comprising CLF chairman Lawrence Duprey, former Group Finance head Andre Monteil and corporate secretary Gita Sakal.
Sakal, he said, ran CLF when Duprey was out of the country. He admitted that he was “shocked” by the financial state of the companies and discovered more about CLF from the directorship he held at Republic Bank Limited.
“At the board of CL Financial I personally had raised the issue of the inter-company borrowing on several occasions because I was aware from my sitting on the Board of Republic Bank Limited that the group was going to find itself in great difficulty in terms of borrowing from Republic Bank Limited which was the Group’s bankers. I also raised concerns about the call by the Central Bank to have the statutory fund deficits paid up. It was only in 2008 that I became aware of the deficits challenge with regard to the statutory fund and the extent of the deficits,” he said. “For instance no matter related to CIB ever came to the Board before 2008. Due to the lack of information coming to the Board all I could have done as an non-executive member of the Board was to try and contribute as much as I could from the information that was presented, as little as that may have been,” he said. Tewarie found fault with board minutes saying that alot of information, in particular his objections to certain issues, were never recorded.
