Saturday, February 24, 2018

Duprey: Selected sales will bring down CLICO empire

Former executive chairman of the collapsed CL Financial conglomerate (CLF) Lawrence Duprey is criticising the sale of select assets of the empire he created.

The government has invited potential buyers to bid on two of the conglomerate's malls—Valpark Shopping Plaza in Valsayn and Atlantic Plaza in Point Lisas—as well as the Holiday Inn Express, its hotel at Trincity.

The assets are owned by Home Construction Ltd (HCL), a subsidiary of CLF.

Duprey, in a brief cellphone interview yesterday, told the Express all the assets were assembled "with a plan in place" and "to take one piece out" would cause the empire to collapse.

Duprey, who lives in Florida, USA, expressed concern about the prices and the parties which the assets were being sold to but declined to explain.

CLF officials have indicated to the Express that the company was hoping to raise some $300 million from the assets.

Finance Minister Larry Howai has said the Government's bill for the bailout of CLF subsidiary CLICO was estimated at $19 billion.

"The management don't know what they are doing," Duprey said but was reluctant to offer any advice to the Gerald Yetming-chaired CLF conglomerate.

"I have no concern with CLICO. I am on to other things," he said.

But the offer for sale of the malls and hotel, which was not advertised publicly, has left some investors upset.

Several investors and businessmen complained to the Express that select businessmen were being favoured to control certain commercial spaces to the exclusion of other interested parties.

"They are saying their intent is not to have a distress sale but that is exactly what they are doing when you look at the money they hoping to get for those properties," one investor told the Express yesterday.

HCL had retained advisory firm Ernst and Young to invite selected parties to bid on the properties. It was done a few weeks ago with the CLF board expected to meet today to determine the bids.

"It has been very difficult to get information from CLF. It is not about the price but about the process. There are a lot of assets and it should have been advertised properly. No one knows what is for sale. It reeks of cabal. The price will be tested by the market once the asset is advertised. So ultimately it is about the process which is followed," another irate investor, who did not want to be identified, told the Express.

"People will need information to make an informed decision from the rent roll (income from rented property) to the profit and loss to the bad debts in the books. So it is unusual to determine what one can expect, whether it is $100 million or $200 million or $50 million. Once you follow the process, you will get the highest and the best price. That cuts out corruption," the investor explained.

"The process is flawed and they have ample time to correct it. These are the crown jewels. Valpark is a cash cow. Once the right process is followed, the public will be happy regardless of price," the investor added.

The investor illustrated his point by explaining that when the Chief Justice's house was up for sale during the Basdeo Panday administration, despite the Valuations Division advice that the government should accept the highest price offer, the property was auctioned.

"It was about the process which determined the price," the investor explained.

Among bidders for the CLF assets were the ANSA McAL Group of companies, Issa Nicholas Holdings Ltd, the Hadeed Group of Companies, MovieTowne's Derek Chin, Bhagwansinghs and the Gopaul Group of Companies.

President of the Joint Consultative Council (JCC) and owner of evaluations company Raymond and Pierre Ltd, Afra Raymond, said yesterday the public's concern would best be served by putting the properties in the market.

Further, he called on the parties involved—Yetming, Ernst and Young chairman Colin Soo-Ping Chow and HCL chief executive Richard LeBlanc—to make a public statement on the matter.

Raymond questioned who did the valuations for the properties which were put up for sale by HCL.

"No one in Trinidad did them," he said.

David Walker, an adviser to EFPA policyholders, also questioned yesterday if independent evaluations were being done.

He told the Express that under Section 44 of the Central Bank Act in which it agreed to acquire CLICO, all disposal of assets must be accompanied by independent evaluations and it would be a breach of the Act if the government did not do this before it proceeded with any sale. He said he filed a freedom of information question on this matter to CLF but has had no response after 90-plus days.

The CLF empire has been under Government management since January 2009. Already two assets have been disposed—in September 2012, CLF sold Jamaican spirits company Lascelles de Mercado (LdM) for US$546 million.

It was initially purchased by CLF for US$700 million.

In 2011, CLF's energy company Primera was sold to Canadian oil company Touchstone Exploration Inc for US$50.7 million (TT$326 million).

The Government intervened and bailed out CLF in January 2009. The Shareholders Agreement allows the sale of CLF assets to pay off CLICO policyholders.