IT has been 18 months since Kallco Ltd, a construction giant in the local industry headed by Arvin Kalloo, paid US$4.5 million (TT$30 million) for a 62 per cent shareholding in MotorOne Insurance.
Industry insiders told the Sunday Express they are aware of the transaction, but in all its official documents, MotorOne remains in the hands of its principal owner, Lawrence Duprey.
It was Duprey's private insurance company which was not caught up in the “perfect storm” that hit his international conglomerate, CL Financial, and its insurance company, Colonial Life In- surance Company Ltd (CLICO) in 2009.
Government's bailout of CL companies and CLICO has cost taxpayers about $25 billion.
Kalloo told the Sunday Express: “It is an ongoing transaction and I cannot comment at this point in time.”
Details of the MotorOne sale were raised in court documents last month when former CL Financial executive Carlos John sued Duprey for unpaid loans which amounted to $5.1 million.
In his lawsuit, John said in 2012, Duprey on various occasions requested loans which were provided to a shell company, ICDL.
In court documents, John said in January 2015, Duprey assured him he would be repaid when he sold his 418,880 shares in MotorOne Insurance Company, which is owned by ICDL.
John said ICDL entered into a sale agreement for the sale of Duprey's shares in MotorOne in December 2015 where he was set to receive an initial $24 million, with the balance to be paid over one year.
John stated a $12 million deposit was paid to Duprey, but there was pending legal action relating to the MotorOne sale share agreement and a dispute as to the directorship of ICDL.
Since MotorOne's acquisition to its portfolio, Kallco has applied to the Central Bank for a “Fit and Proper” under the country's Financial Institutions Act, 1993 (FIA) and the Insurance Act, 1980 (IA) (governing legislation), that “a person is considered to be fit and proper if the person essentially is of good character, competent, honest, financially sound, reputable, reliable and discharges and is likely to discharge his/her responsibilities fairly.”
“In some cases, controlling shareholders may be corporate entities and in these instances, similar fit and proper tests should be applied to those entities,” reads the Central Bank Fit and Proper 2005 Guideline.
However, the company had been unable to obtain the “Fit and Proper” determination.
Unable to respond
In October 2016, the Sunday Express had e-mailed the Central Bank on Kallco's application for a change of user licence.
In response, communications manager Nicole Crooks said in a statement: “As you will appreciate, the bank is unable to respond to your specific questions as to do so would be in breach of Section 56 of the Central Bank Act.”
“By way of information, the Insurance Act defines controller as a director or chief executive officer of a company or any person who is entitled to control at least one-third of the voting power at any general meeting of the company. A controller of a company which has an insurance company as a subsidiary is deemed to be a controller of the insurance company. In accordance with Section 20 of the Insurance Act, no person can become a controller of an insurance company unless he has stated his intention to do so in writing to the Central Bank. Upon receipt of a completed application...the Central Bank has three (3) months to serve a written notice of objection or non-objection,” the bank added.
A source close to the transaction explained to the Sunday Express it was “ironic” that Duprey, a person not qualified to meet the Central Bank's present “Fit and Proper” guideline, remains the owner of the company on paper.