Clico, Panday and the oligarchy – Part 2

There were arguments for and against this transaction. A Committee of Ministers headed by the then Prime Minister was set up to hear the representations of both sides. I recall Claude Musaib-Ali and others appearing before this committee to make the case for the Clico bid. After the committee listened to presentations, I strongly opposed the proposition by Clico on two basic grounds, among others.

Firstly, if Clico was permitted to proceed with the acquisition it would further facilitate the concentration of economic power in the country in a single enterprise, and indeed, in a single individual and his cohorts, placing the management of billions of dollars worth of financial assets in their hands. The largest insurance company in the country would have then been controlling the largest bank.

Secondly, it was uncertain what kind of influence the directors of Clico and CL Financial would wield over the management of Republic Bank and how this would affect the loan portfolio of the bank. In my mind there was a particular concern that an additional source of substantial savings would have been at the disposal of the controllers of Clico and CL Financial and that depositors’ monies could have been applied towards significant risky investments at the whim and fancy of Duprey and his boys, in contravention of good banking practices.

The Committee of Ministers was never reconvened and we subsequently learnt that the UNC Government had approved the transaction and Clico had had its way. There was no doubt in my mind that the hand of Lawrence Duprey operated behind the scenes and Basdeo Panday had made the key input in the decision to grant approval. In hindsight it seemed that all these representations and discussions were merely a formality and compliance with the wishes of Duprey was a prior consideration in Panday’s mind.

In the years that followed, the entrepreneurial acumen of Lawrence Duprey was loudly praised and promoted and the close and cordial relationship between him and Panday was deepened so much so that Panday would leave urgent party and government business in Trinidad to fly off to Miami to attend the christening ceremony of Duprey’s son.

As the divestment of state enterprises proceeded under the aegis of the Divestment Secretariat with Jerry Hospedales, a key Duprey associate, as its head, Panday became more and more convinced that private sector take over of state enterprises would significantly assuage our economic problems and, in this mode of thinking, Duprey’s intervention was seen as crucial and compelling.

I was not opposed to divestment per se, but was apprehensive about the manner in which it was to be implemented. I had many concerns which included whether there was a transparent invitation and tendering process, a proper valuation of assets, a reasonable quantum of proceeds on sale accruing to the Government, the nature and extent of concessions to be granted by Government, and above all else, the immediate fate of workers employed in these state enterprises.

It was obvious that no private sector concern which contemplated outright purchase or a controlling interest in a state enterprise would want to continue with the existing modus operandi of these enterprises. They would focus on strategies to achieve profitability which would mean the reduction of costs. And the largest element of cost was labour. It was inevitable that one consequence would be either wholesale or significant retrenchment of employees in these enterprises. It was incumbent on Government to consider the socio-economic impact of such an outcome.

These were concerns I raised when the CL Financial group made its bid for purchase of controlling interests in a number of state enterprises. When the company’s offer on Trinidad Lake Asphalt had come up, the union raised strong objections, no doubt sensing serious loss of employment by its members. When CL Financial made its bid for Tanteak Limited, I insisted that the conglomerate should agree to a moratorium on retrenchment for two years during which time the workers likely to be affected would have some respite in order to seek alternative employment or retraining.