Govt’s wind-up of CL derailed

The court is being asked to appoint Hugh Dickson and Marcus Wide of international accounting firm Grant Thornton as joint provisional liquidators.

The application for the appointment of the liquidators is in conjunction with action taken by Government which has also petitioned the High Court to have CL Financial wound up because it is unable to pay its $15 billion debt.

The winding up hearing is set for July 25, the same day a meeting has been convened by shareholders who are in opposition of the move by the Government. At the hearing for the appointment of the provisional liquidators before Justice Kevin Ramcharan in the Port of Spain High Court yesterday, former attorneys general John Jeremie, SC, and Ramesh Lawrence Maharaj, SC, gave notice of their intent to seek to intervene in the proceedings.

Both Jeremie and Maharaj are representing two groups of shareholders of CL Financial. In support of his application, which will be heard on Wednesday along with the application for the liquidators’ appointment, Jeremie described the move by the Government to have CL Financial wound up as ‘corporate murder and homicide.’ He said the conglomerate was not a grocery or parlour on the corner and his clients had rights under the Companies’ Act to be heard. He said the Government has been in control of CL Financial for almost a decade and one third of the debt owed to the Government had already been repaid.

“Unless they can say those payments were made unlawfully, they (the repayment) adhered to the Companies’ Act when the company was solvent,” he argued. Jeremie also said it was an abuse of process to not allow his clients an opportunity to be heard on the applications.

In strenuous opposition to the intervention, Senior Counsel Deborah Peake, who represents the Government, accused the shareholders of waiting to derail the appointment of the liquidators and suggested that they instead seek to intervene in the winding up proceedings.

“My client is only one creditor... We are seeking to preserve the company’s assets. The Government is owed $15 billion and they (the shareholders) can only obstruct our application if they can say and prove that the company is solvent,” she said. The $15 billion is the balance owed to the Government for its bailout of CLF subsidiary CLICO in 2009 which amounted to $23 billion in total.

In its winding up petition, the Government has argued that CLF is insolvent and its continued operation is reckless. It has also said that it was in the public’s interests to have the conglomerate wound up to repay its debt to the Government and other creditors.

It also noted that shareholders have sought to undermine the conditions under which the Government agreed to provide financial support to CLF and its subsidiaries by seeking to remove the government’s directors on CLF’s board.