Shareholders blanked on request to go before Privy Council

PORT OF SPAIN, Trinidad, Oct 31, CMC – The Court of Appeal has dismissed an application by a group of shareholders of the CL Financial (CLF) that sought permission to go to the London-based Privy Council to challenge a decision by the courts here to appoint provisional liquidators for the parent company of the troubled insurance giant, CLICO, earlier this year.
The three panel judges – Nolan Bereaux, Gregory Smith and Andre Des Vignes – in an oral ruling refused the shareholders leave to go to the Privy Council, the island’s highest court to argue against the Court of Appeal ruling made in July.
The Court of Appeal said that their application did not raise any arguable issues as the appointment of the provisional liquidators became academic after High Court Judge Kevin Ramcharan approved the Trinidad and Tobago government’s bid to wind up the company in September.
The shareholders can now approach the Privy Council directly in seeking to challenge the appointment of a provisional liquidator.
The Court of Appeal Monday also rejected the policyholders’ claim that the appeal was a matter of public importance and pointed out that it was in the public’s interest for the company to be liquidated in order to repay Government for its bail-out of CLF’s subsidiaries in 2009.
In denying the shareholders leave, the Appeal Court ordered them to pay the State’s legal costs for defending the application.
Attorney Navindra Ramnanan, who is representing former CLF chairman Lawrence Duprey, said his client needed to challenge the initial appointment as the shareholders were not allowed to make submissions before Justice Ramcharan made his decision.
He argued that his client was unable to raise unique issues with the winding up, including the fact that the application was made by government, which had effective control of the company since 2009 through a memorandum of understanding and a series of shareholder agreements.
The attorney also admitted that the shareholders had filed an appeal against Justice Ramcharan’s decision in the Court of Appeal. That case is yet to come up for hearing.
The Keith Rowley-led administration had made the application and a corresponding winding up petition for the company in July after the shareholders signalled their intention to change the composition of the board which had been government-controlled since the multi-billion dollar CLICO bail out in 2009.‘
As a condition of the bailout, CLF had agreed to honour its subsidiaries’ debt and allow government to select four members, including the chairman, to its seven-member board. The agreement, which was renewed 17 times after being first signed, expired in August last year and the shareholders refused to agree to a new deal.
The shareholders’ refusal was reportedly based on the failure of the Ministry of Finance to consider a proposal from independent auditing firm PwC, which suggested that they are given control of the company and allowed to renegotiate its repayment arrangement for the TT$15 billion (One TT dollar =US$0.16 cents) still owed to Government.
The shareholders are claiming that the company’s debt to the government is inflated and the company is not insolvent, as is required for winding up proceedings.
Finance Minister Colm Imbert told Parliament in October that the CLF’s assets will be sold on the stock exchange and used to create a national mutual fund.