Clico Enquiry: $300M stash in Swiss bank

By Andre Bagoo - reproduced from NEWSDAY

THE PROCEEDS of the $300 million sale of CL Financial (CLF)’s Clico Energy Limited (CEL) shares – which was done by CLF officials behind the State’s back in 2009 – were transferred to a Swiss bank account and have not been paid back, according to evidence heard at the Colman Inquiry yesterday (Wednesday).

Testifying at the Winsure Building, Richmond Street, Port-of-Spain, Permanent Secretary of the Ministry of Finance Alison Lewis stated that while the proceeds of the sale were supposed to be applied by CLF against its statutory fund deficit – pursuant to the terms of the January 2009 Memorandum of Understanding (MoU) between CLF and the State – the funds were never so applied.

In her 35-page witness statement tendered into evidence, Lewis noted that when it became public knowledge that CLF sold the Clico Energy assets to Proman Holding (Barbados), there was an expectation that at the very least the State would get the proceeds of this sale to assist in the process of repaying policyholders and the State.

“The Ministry of Finance expected that CLF would be applying the proceeds of sale...to the satisfaction of the MoU and asked that CLF indicate that the transfer of such funds to the Clico statutory fund had been effected,” Lewis states in her statement. She was asked to clarify this by attorney for the Ministry of Finance Vincent Nelson QC.

“Did they ever apply it to the MoU?” Nelson asked.

“No, they did not,” the witness replied.

Instead, the funds appeared to have been wired to a bank account – ostensibly in escrow – in Switzerland. Counsel to the inquiry Peter Carter QC noted the proceeds of the sale were placed in an escrow account by way of a document signed by Duprey. The document appointed Proman director Marcus Gresch as escrow agent over a Swiss bank account into which the funds from the purported sale were placed. Former CLF corporate secretary Gita Sakal signed on to the escrow agreement as well. Sakal, at the inquiry last year, said Gresch was, “Mr Duprey’s lawyer in Switzerland and also lawyer for Proman and CLF.”

Lewis said in contrast with other sales CLF management had pushed through in compliance with the MoU, she had no knowledge of the Clico Energy sale.

She said CLF negotiated the MoU in “bad faith”. However, she noted there was no clause in the MoU which specifically imposed personal liability on signatories for breaching the MoU. Of $7.2 billion in funds owed to the State today because of the bailout, Lewis said, “None of it has been repaid to date.”

While it has now become public knowledge that CLF sold its shares in Clico Energy Limited to Proman Holding (Barbados) behind the State’s back, that $300 million (US$46.5 million) transaction was almost the tip of the iceberg.

It also emerged yesterday that CLF management was attempting to arrange – behind the State’s back – a $5 billion sale in methanol assets to an unnamed business “partner” of Duprey.

In a 35-page witness statement which was tendered into evidence, Lewis details the attempt to sell $5 billion in assets. She said a tip-off was sent to the State-appointed chairman of Clico – post bailout– from the CLF board.

“On April 3, 2009, I was informed by Dr Euric Bobb, the then chairman of Clico, that he had been informed by a person close to the CLF board of directors that the CLF board would be meeting on that said day to consider the sale of CLF’s MHTL shares to a German group of companies at a sale price of $5 billion,” Lewis states.

“The German group was apparently Mr Duprey’s partner in methanol venture.” The deal did not go through after it was discovered.