Wrong firm

Report shows $3.3 million CLICO invoice was not issued by Thompson & Associates

Forensic investigators looking into the financial transactions of the collapsed CLICO International Life (CIL) has made a startling revelation about a $3.33 million payment, which was purportedly made by CIL back in January 2009 to Thompson & Associates, the legal firm operated by late prime minister David Thompson.

In their much-anticipated report of June 21, 2013, which was unsealed by the court earlier today, the investigators also highlighted a number of other questionable transactions, including an $11.5 million write off to CLICO’S Trinidad-based parent company, CL Financial, whose former executive chairman of Lawrence Duprey personally benefited from a $3.5 million loan repayment by CIL.

The CIL money trail also led investigators to probe a $3.3 million payment, destined for Duprey’s protégé in Barbados – Leroy Parris, who is the former executive chairman of CIL and its Barbadian parent CLICO Holdings Barbados Limited (CHBL).

“In summary, we found that the Thompson & Associates invoice purportedly for legal fees and retainer and used to make the payment by CIL, was false,” the Forensic and Dispute Services team of Deloitte & Touche LLP of Canada said in the executive summary of their 15-page report, which came on the heels of a more expansive 60-page report on December 5, 2011.

They found that the actual invoice submitted for payment was not issued by Thompson & Associates, but “was created solely to facilitate the payment and to conceal its true nature, which was partial payment of a substantial gratuity to the benefit of Mr Leroy Parris, the former chairman of CIL and CHBL.”

“The timing and creation of the invoice on December 30, 2008 and the related cheque payment on January 16, 2009 corresponded with growing concern regarding the financial status of CL Financial and related companies in Trinidad and Tobago, which culminated in the Central Bank of Trinidad and Tobago announcing on January 30, 2009 that it was providing financial support to the CL Financial Group,” the forensic auditors noted.

They further revealed that “submission of the invoice for processing and payment occurred after meetings between the Central Bank of Trinidad and Tobago and representatives of CL Financial regarding financial support.

“We identified a considerable number of related party transactions over and above the transactions that were declared to us in response to requests we made of CIL and its subsidiaries.  We noted a substantial payment of commissions to a company controlled by Mr Parris on May 8, 2009, shortly before the appointment of the Oversight Committee under the terms of the memorandum of understanding (MOU) between the Government of Barbados and CHBL dated May 12, 2009,” the report added.

It further noted that under the MOU, the Oversight Committee was to oversee the financial affairs of CLICO Holdings Barbados Limited and its regulated subsidiaries, including CIL.

It also revealed that the CHBL had agreed that its subsidiaries would not make bonus or ex gratia payment to directors, management or other senior officials while the MOU was in force.

“We found that certain CIL executives and advisors paid less than third parties when they acquired real estate from development companies in the CIL group.”

With respect to inter-company balances, the investigators said they selected 119 transactions with a total value of over $300 million. These were subjected to further review and analysis, including funds tracing.

The investigators also sought to obtain and review additional documentation.

“While we did not find all the documentation required to further analyze all of these transactions . . . those transactions with supporting documents, and or for which we completed funds tracing, we did not identify any issues,” the forensic auditors stressed.

Based on their analysis, the forensic team also said $11.5 million due to CIL by CL Financial in the form of receivables was written off effective December 31, 2008 due to the financial difficulties encountered by the Trinidad-based CLICO parent company.

“We found documents, including correspondence from Mr Lawrence Duprey confirming that $3.5 million of that balance receivable related to a loan in the name of Mr Duprey which was repaid on his behalf by CIL,” the executive summary of the report stated.

When contacted today, Parris’ attorney Hal Gollop, QC, told Barbados TODAY, he had not yet seen the report.

However, he maintained that the $3.3 million was a legimate payment due to his client, who he said was anxious to return to the High Court to have the injunction, which has frozen his assets, lifted.

“We have not been able to get back in court to have that injunction discharged. The return date was February 16 and now almost March 16 and we have not been able to get back into court on our application to discharge the injunction. That order was made since the 29 January,” noted Gollop.

In a brief comment, President of the Barbados Investors and Policyholders Alliance (BIPA) June Fowler said she was happy the report had finally been unsealed, while insisting on the need for transparency in the CLICO process.

“This whole thing should be about transparency. We want to know that if there has not been anything untoward, the policyholders have a right to know how their funds were used over the years,” said Fowler, who was yet to study its findings.


2 Responses to Wrong firm

  1. Joel C. Payne
    Joel C. Payne March 11, 2015 at 2:54 am



    T&T Government controls key Miami real estate.« on: June 23, 2009, 04:32:36 AM »
    State controls key Miami real estate.
    TT Guardian.

    If you thought that the International Waterfront Centre in downtown Port-of-Spain was the only high-rise, oceanfront property owned by the Government and people of Trinidad and Tobago, you would be wrong.
    Government and private sector sources last night confirmed that a high-rise hotel and condominium development in Fort Lauderdale called “W Fort Lauderdale and The Residences”, which opened on June 4, is an asset of Clico, the insurance company which the T&T Government seized control of following the January 30 Memorandum of Understanding between Finance Minister Karen Tesheira and former CL Financial boss Lawrence Duprey.

    Duprey is a principal and the chairman of the DYL group, the development company behind CL Financial’s building projects in Miami and Fort Lauderdale (in Florida). The other principal is John Yanopoulos, DYL’s chief executive, who was said to be in meetings or unavailable when the Guardian called his Miami office three times yesterday. The W Fort Lauderdale project features two 23-storey towers facing the Atlantic Ocean with 517 rooms in total—346 rooms in the hotel and 171 condominiums. The developers estimated that the hotel and condominium project would have been opened in December 2006 at a cost of US$220 million.

    While CL Financial is described as being a project equity sponsor of the DYL Group, which is responsible for four Florida building projects, local sources confirmed last night that the W Hotel was a Clico asset “which would be extremely valuable once the international financial markets bounce back.”
    The other CL Financial projects in Florida which are now owned or controlled by the Government and people of T&T are: n Infinity at Brickell, a 56-story luxury condominium with 459 residences and more than 42,000 square feet of office-condominium space, and 6,000 square feet of high-end retail space;
    n Europa by-the-sea with 50 ultra luxury residences in Fort Lauderdale;
    n Infinity II, a 65-storey skyscraper located in the southern Brickell Financial District, which is expected to be completed this year. It’s estimated that these three properties, which were funded mostly by British American and by debt that CL Financial took on, are worth more than US$300 million.

    In exchange for an initial infusion of $1.2 billion in cash and a commitment to support Clico’s policyholders and depositors, the MOU allowed the Central Bank to take control of CIB under section 44D of the Central Bank Act. Under the MOU, Duprey also agreed to divest CL Financial assets to help fund Clico statutory fund deficit, estimated at over $5 billion. CL Financial also agreed to divest itself of all of its 55 per cent stake in Republic Bank Limited and its 56 per cent stake in Methanol Holdings Trinidad Limited (MHTL).

    In a new agreement, signed by the Government on June 5, the Government seized control of CL Financial, installing four directors on a new seven-member board to be led by former Central Bank Governor Dr Euric Bobb.
    The main aim of the new agreement, sources said, was to restructure CL Financial’s debt which is estimated at $13 million. Sources said 70 per cent of the CL Financial debt was held by local financial institutions.
    Contacted for comment last week on CL Financial’s debt position, Bobb said by e-mail: “I dare say that the detail you request is not the kind of information that any company will readily disclose unless where required for regulatory purposes or in connection with raising debt or equity.”[-End]

  2. Alex Alleyne March 11, 2015 at 6:49 am

    WHAT NEXT ? .


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