PORT OF SPAIN, Trinidad, Thursday July 20, 2017 – CL Financial shareholders have vowed to pay back a TT$15 billion (US$2.2 billion) debt to the Government after scoring what it called a “major legal victory” against the Keith Rowley administration last night.
Last week, Government went to the High Court with a petition to have the company liquidated. Finance Minister Colm Imbert had explained then that the move was in response to attempts by the company’s shareholders to take control of the board.
However, after a near seven-hour hearing, which went after 9 p.m., High Court Judge Kevin Ramcharan sided with the company shareholders, ruling that the action by the Government was premature.
He said the Government had no real evidence that shareholders were seeking to dispose the company’s assets in the event they regained control of the conglomerate’s board during a special general meeting carded next Tuesday.
“In fact, the evidence suggests that they (the shareholders) are intent in repaying their creditors,” Ramcharan said.
Representative for CL Financial shareholders Carlton Reis told reporters the Government’s action amounted to much ado about nothing, since the company had no intention of reneging on its debt.
“We will form a team to negotiate with the Government to repay the taxpayers, which is what we always wanted to do. I don’t know why the Government went through all this stress about, but we always insisted we wanted to pay back the Government and we are going to do it,” Reis said.
CL Financial has only paid the Government about TT$7.5 billion (US$1.1 billion) after it received approximately TT$23 billion (US$3.4 billion).
According to Imbert, under the original agreement between the Government and CL Financial, the bailout was supposed to have been completed after three years, and the assets of CL Financial and its subsidiary CLICO should have been disposed of by 2012 in order to repay the Government.
Imbert had expressed concern that there was reluctance on the part of the other shareholders to continue the original agreement and to sign another extension to the shareholders’ agreement.
During next Tuesday’s special general meeting, shareholders will table proposals to have two additional members on the board, effectively giving them control.
Under the original agreement, Government holds the majority stake in the board. CL Financial has four directors, and there are three directors from the United Shareholders Limited which represents all other shareholders.