(Trinidad Express) No auditor worth their weight in salt would have accepted the valuation proffered by British American Insurance for the billion-dollar Green Island land deal, attorney for the Clico policyholders group Lynette Seebaran-Suite said on Tuesday at the enquiry into the failure of CL Financial and four of its subsidiaries.
Seebaran-Suite said the TT$1.8 billion purchase of property in Florida, USA, caused the collapse of the CL Financial empire.
The billion-dollar transaction was a note in the accounts of CL Financial subsidiary British American.
A valuation for the property, dated September 17, 2007, was sent to British American from an individual named Shiva Rambaran.
Rambaran had no affiliation with British American, Seebaran-Suite said. Rambaran was hired by the company selling the Florida property.
Seebaran-Suite said the valuation was “suspect”.
She made the statements during her cross-examination of PricewaterhouseCoopers’ retired partner Gerard Olliverre at the enquiry, Winsure Building, Richmond Street, Port of Spain.
Seebaran-Suite: My information is that Mr Rambaran is not associated with the buyer, British American, but with the seller. So if that were true, if that were true, then this valuation would be very suspect, would it not. It would be a valuation proffered by a seller.
Olliverre: It is done by presumably a valuator who has the professional qualifications and integrity.
Seebaran-Suite: He was hired by the seller.
Olliverre: I do not know the arrangements made by the parties; you are making statements because something is so, then the next thing is…I can openly say that you fudging the valuation from my understanding because of this person’s relationship…
Seebaran-Suite: I think that an auditor should challenge the prominence of a valuation which is put forward as evidence of a proposition that a property is being acquired at fair value.
Seebaran-Suite questioned whether the fact that the valuation was paid for by the seller would have prejudiced the valuation.
“You are saying that because a person paid for a valuation that the valuation is suspect. You are going into the bonafides of the valuator,” said Olliverre. “As a professional, I cannot take the position that if somebody pays me to do something, I do it in a non-objective way, otherwise, the whole auditing profession would fail on that basis. The whole legal profession presumably would fail on that basis. You do not offer opinions based on who pays you.”
Seebaran-Suite said the valuation in question came with the disclaimer that it “should not be viewed as an appraisal value”.
“If you see that on the first page of a valuation, how can you possibly, as an auditor worth his salt, take this document,” she said.
British Queen’s Counsel Edwin Glasgow, counsel to the commission, said the fact that CL Financial was dependent on Republic Bank Ltd shares yet using it as their means to get out of financial difficulty by selling it was similar to them “having their cake and eating it too”.
Olliverre described former CL Financial corporate secretary Gita Sakal as a “prominent player” in the conglomerate.
