Duprey took unsecured loans of $172M from CLF: Report

A report in the Newsday newspaper Sunday said that former CL Financial (CLF) executive director Lawrence Duprey took unsecured loans from the company amounting to $172 million. And it stated that it is unlikely that the loans would ever be repaid.

The report said the figure was on CLF's books on May 2009, adding that a cabinet note from the Ministry of Finance dated May 29, 2009 listed Duprey’s debts to CLF as part of the potential assets the State could draw upon to fund CLF’s liabilities.

It quoted from the cabinet document: “Based on the data supplied to date by CLF the recovery potential from the sale of its assets had been estimated at $4.7 billion and is derived from the reported and unencumbered value of certain group companies, valued at $2.8 billion; the potentially unencumbered portion of the Republic Bank shares owned by CIB, estimated at $1.7 billion; and unsecured loans to Mr L.A. Duprey in CLF and CIB valued at $172 million.”

Newsday said Duprey wrote to the the Minister of Finance, Karen Nunez-Teshiera on May 5, 2009, in an attempt to have former CLF directors serve as paid consultants to the State in fixing CLF's problems. These were the same directors who had presided over the collapse of the conglomerate.

Newsday said the Permanent Secretary of the ministry, Alison Lewis, promptly rejected the offer in a letter dated May 14, 2009.

“We see no need to reserve consultancies for ex-CLF directors. This is particularly because we have already agreed to contract the services of an advisory firm in the restructuring exercise and in addition, the board is free to contract technical assistance as and when needed,” the letter stated.

Lewis also refused a request by Duprey for the CLF board to be indemnified for actions they performed prior to the bailout.

“Government cannot give indemnification to any board member for actions performed prior to the establishment of this new board,” she said.

Newsday reported that the board members of CLF are paid board fees of between $16,800 and $21,000 a month.

The paper said in the months prior to the government bailout CLF had instructed one of its subsidiaries - Clico Investment Bank (CIB) - to write off a total of $121 million in loans in exchange for dividends and bonuses reportedly due to Duprey.

The paper quoted a letter, dated May 1, 2008, confirming that dividends, bonus payments, together with any ex-gratia pension payments "due to the group executive chairman, Mr Lawrence Duprey, shall be sufficient to cover the loan of TT$78,000,000.00 and capitalised interest over a three (3) year period.”

It added, “We further confirm that these dividends, bonus payments, together with any ex- gratia pensions payments will be made directly to you in settlement of the loan for TT$78,000,000.00 and capitalised interest, within the said three (3) year period.”

Newsday said Duprey was one of the people who signed the letter stating that he agreed to the conditions. The paper said a second letter on September 8, 2008 outlined the same conditions for the settlement of a $16 million loan.

Two other similar letters covered loans totaling $27 million. Once that was done, Duprey began negotiations with the Central Bank and the Ministry of Finance over liquidity problems faced by the CLF group, Newsday said.

It added that within days after Duprey wrote to the Central Bank on January 13, 2009 about liquidity troubles, the CLF board approved a dividend payment for Duprey estimated to have been worth about $10 million on his CLF shares.