PORT OF SPAIN, Trinidad – The Central Bank of Trinidad and Tobago (CBTT) and Colonial Life Insurance Company (Trinidad) Limited (CLICO) have filed civil proceedings against the former chairman and owner of the insurance company whose collapse has sent economic shock waves throughout the Caribbean.
A statement from the CBTT said that the civil proceedings have been filed against Lawrence Duprey, former director Andre Monteil as well as CL Financial Limited, Dalco Capital Management Limited and Stone Street Capital Limited arising from the failure of CLICO.
CBTT said that it acted under emergency powers provided for under Section 44D of the Central Bank Act that allowed CBTT to assume control of CLICO.
“The claims include allegations of mismanagement of CLICO and misapplication and misappropriation of its income and assets to the detriment of its policyholders and mutual fund investors. CBTT and CLICO are seeking damages, equitable compensation and declarations related to certain agreements and property of CLICO,” the CBTT said in its statement.
It said that the Statement of Case alleges breach of statutory and common law duties and related accessory liabilities on the part of the Defendants and highlights certain egregious transactions involving the use of CLICO’s assets and income to its detriment.
It listed them as transactions related to shares in Republic Bank Limited; drinks transactions including Lascelles de Mercado; energy transactions including the sale of CLICO’s stake in CLICO Energy Ltd; Florida property transactions; and the sale of seven million HMB shares.”
CBTT said the pleadings highlight “the subordination of the interests of CLICO, its policyholders and mutual fund unit investors to the private interests of Mr. Duprey and Mr. Monteil and their companies; the lack of proper governance and serial mismanagement; improper dealing with CLICO’s assets and the funds of policyholders and mutual fund unit holders.
“This action is based on the forensic investigations commissioned by the CBTT into the affairs of CLICO. The forensic work is continuing and may result in the expansion of this claim and/or further action.”
The CBTT said that in April last year, the CBTT-appointed manager of CLICO Investment Bank (CIB) also commenced civil proceedings against Monteil, Richard Trotman, First Capital Limited and Stone Street Limited “arising from the failure of CIB”.
It said that the preparation of civil proceedings was based on the forensic investigation reports and that “this action represents the culmination of those preparations; however, the Bank notes that investigations continue which may lead to the expansion of this claim and other action.”
Chairman of the CLICO Policyholders Group, Peter Permell , said the action came as no surprise to the group and welcomed the Central Bank’s lawsuit.
“This is a very serious issue for the Central Bank. To file such a lawsuit means that they would have made a prima facie case against them,” Permell told reporters.
“We would have to wait and see what happens now, this is very interesting times because this is unprecedented in our country that the Central Bank would go after” the former directors, he said.
Permell said 20,000 policyholders were waiting to be paid as a result of the collapse of CLICO in 2009.
Finance Minister Winston Dookeran told the Senate on Tuesday that the former government injected seven billion TT dollars (US$1.01 billion) to save the cash strapped insurance company, but needs another TT$13 billion (US$2.01).
Caribbean countries have said their citizens lost millions of dollars in the collapse of CLICO and they have been moving to establish new entities to provide services that the Trinidad-based regional insurance giant had been providing.
