“Clico was the money,” was how Carballo summed things up as hearings of the Commission of Inquiry continued at the Winsure Building, Richmond Street, Port-of-Spain. And in the case of Duprey, this was particularly true.
Witness testimony as well as inquiry documents obtained by Newsday now paint a picture of a rich pay-out package which saw Duprey paid sums for the deals he cobbled together all over the world, even as 90 percent of those deals – funded, through Clico policyholders money – eventually faltered. The package included:
* a base salary of $60 million per year;
* a series of directives which saw the Clico Investment Bank (CIB) in 2008 agree to effectively write-off $121 million worth of “personal loans” to Duprey in exchange for payment of reportedly outstanding bonuses and dividends;
* payment of a total of $90 million in one year (2007);
* payment of a one-off $5 million fee for a Las Vegas trip to organise Florida real-estate deals;
* a fee of $6 million for travelling to arrange “business ventures” in far-flung locations such as South Africa and the “Far East”. The one-off fees, according to Clico attorney Neal Bisnath, who cross-examined Carballo, were just some of many.
“It was significant,” Carballo said. “In the tens of millions. That is not in dispute.” Yet Carballo, who served as the officer in charge of the CLF group finances, was unable to give details of Duprey’s pay. Questioned on the issue by two lawyers, he said the payments were done directly by Clico to Duprey with no CLF involvement and that he had no knowledge of them.
Yet, Bisnath, referring to inquiry documents, sought to trigger Carballo’s memories. He noted a letter, dated November 18, 2008, issued by CLF to PricewaterhouseCoopers which noted that payments had been channelled to Duprey for the year 2007 via his company Dalco Capital Management.
“Included in the group’s expenses are amounts paid to a company controlled by the executive chairman, Dalco Capital Management and other expenses paid on his behalf totalling $90 million,” the letter read. “These expenses have been approved by the board of directors.”
Attorney Terrence Bharath, too, questioned Carballo on the issue. He referred to a letter, obtained by Newsday, which noted that personal loans had been given to Duprey by CIB.
Payments of these loans, however, were diverted away from Duprey to CLF.
A first letter, dated May 1, 2008, is headed, “Assignment of dividend and bonus payments due to the executive chairman, Mr Lawrence Duprey”.
“We hereby confirm 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,” the letter reads.
It is signed by Clinton Rambersingh, director, for and on behalf of CLF and Michael Carballo, group financial director, for and on behalf of CLF.
“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.” The letter is also signed by Duprey who states, “I agree to the above instructions.”
Bharath queried whether the letter referred to the reported assignment of a $78 million loan which former CIB chairman L Andre Monteil had taken out at CIB in order to move forward with the controversial purchase of $110 million Home Mortgage Bank shares held by Clico.
But further, additional documents obtained by Newsday, deepen the extent of personal loans and bonus payments Duprey enjoyed.
A second letter, dated September 8, 2008, notes a $16 million loan.
“We hereby confirm that dividend and bonus payments due to the Executive Chairman Mr Lawrence Duprey, shall be sufficient to cover the loan of TT$16,000,000.00 and capitalized interest.”
A third letter, dated November 5, 2008, months before the State entered into an arrangement to bail-out CLF notes another loan, this time for $12 million.
“We further confirm that these dividend and bonus payments will be made directly to you in settlement of the loan of TT$12,000,000.00 within one year,” CLF assured.
A fourth letter, dated November 11, 2008, reads: “We hereby confirm that dividend and bonus payments due to the Executive Chairman Mr Lawrence Duprey, shall be sufficient to cover the loan of TT$15,000,000.00 and capitalized interest.”
Mere weeks after the November letters, Duprey was in talks with the Central Bank and the Ministry of Finance over liquidity problems faced by the CLF group.
Bisnath also questioned Carballo on a series of fees paid including $6 million for “services” in relation to CL Ventures, “business opportunities”, work on Florida real estate projects like the Capri project and “new business ventures in South Africa and the Far East”.
In one instance Duprey – or rather Dalco – also billed Clico $5 million “for services rendered in Las Vegas” where Duprey had discussions with banking officials on Florida real-estate deals and had attended a real estate conference.
“So Mr Duprey billed Clico for these items quite apart from his monthly salary?” Bisnath asked. “Yes,” Carballo replied.
In relation to the $6 million fee, the chairman of the inquiry Sir Anthony Colman queried what was the connection the activities undertaken by Duprey had with Clico.
“So there was no direct connection with Clico?” he asked Carballo. Carballo said there were none in relation to business ventures. “Absolutely none,” Colman said, taking notes. Colman asked Carballo what were the planned business ventures in South Africa and the Far East.
“It’s unclear. I don’t know,” Carballo said. At the same time, as he took home a large pay, Duprey presided over a group which saw high bonuses for all sorts of executives, according to Carballo.
“In many instance the chairman was hardly challenged on management override issues as it was the chairman who had to approve bonuses and contracts for executives throughout the group, many of them obscenely lucrative,” Carballo noted in his 90-page witness statement. Bisnath declared Clico to be a “cash-cow”.
Duprey’s rich fees were in stark contrast to the losses which were incurred by CLF under his tenure. Bharath asked Carballo whether he would agree that 90 percent of the foreign business ventures, including billions invested in spirits companies, had failed to deliver profits to the group.
Carballo noted that “hundreds of millions” were lost on the European drinks company deals, on the sale of US rum company Cruzan, on Belvedere. Carballo noted that the billions in Florida real estate deals had resulted in only two successes out of almost a dozen projects. Duprey had a firm, DYL, which was in charge of “project management”.
“The majority of the deals were losses, no?” Bharath asked. “What were the checks and balances? The money he invested did not belong to him, it belonged to the man on the street.”