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DUPREY GOT $1.1B

By Andre Bagoo Friday, September 23 2011

click on pic to zoom in

HE MIGHT have earned $90 million in fees in 2007, but in that year former CL Financial executive chairman Lawrence Duprey’s total earnings from the group turned out to be much more than that.

According to Clico attorney Neal Bisnath, Duprey—through his private company Dalco Capital Management—took home $1.1 billion between the period 2004 to 2008, averaging an estimated $200 million per year in fees.

“I was not aware of that at all,” said former group chief financial officer Michael Carballo, as he was cross-examined for yet another day at the Clico Commission of Inquiry at the Winsure Building, Port-of-Spain.

Bisnath said it was the group’s insurance arm, Clico, which funded these payments which were first made to parent company CL Financial before being transferred to Dalco Capital Management. Duprey owns 99 of Dalco’s 100 shares.

The sums disclosed by Bisnath include previously disclosed fees paid to Dalco including: $90 million for 2007 as disclosed by Clico correspondence to PricewaterhouseCoopers; a $5 million fee for a business trip to Las Vegas; a $6 million fee for a trip to South Africa and the Far East. Additionally, $121 million in personal loans with Clico Investment Bank were, in 2008, effectively written-off in exchange for bonuses and dividends ostensibly due to Duprey.

As more questions arose over Duprey’s hold over Clico, other transactions in which Duprey may have gained faced scrutiny.

Inquiry chairman Sir Anthony Colman suggested to Carballo that Duprey had control of the investment committee of CL Financial.

“He had the investment committee in his pocket,” Colman put to Carballo.

“I am not too sure I would describe it like that,” Carballo replied. “Lawrence Duprey was the chairman of Clico.”

But he noted that senior executives would often fail to challenge decisions of their chairman because he had control over the lucrative bonuses paid out all over the group. As a result, while a committee was in place to carefully sift through investment proposals, Duprey would have the final say.

“It was Lawrence Duprey’s call to approve and if he said yes, it went through?” Colman asked. “That is correct, he was the ultimate decision maker,” Carballo replied.

Attorney for Proman Holdings Christopher Hamel-Smith asked whether Duprey was virtually synonymous with CL Financial (CLF): working out the terms and conditions of deals and going ahead with talks behind the back of the board.

“No one dealing with CLF could have had any doubt that he was able to negotiate the price on many CLF deals?” Hamel-Smith said. “That is correct,” Carballo said.

Attorney for the Ministry of Finance Fyard Hosein SC noted that Duprey, along with CLF board members, got high board fees. He cited one instance where former CLF corporate secretary Gita Sakal was issued a $94,000 cheque for board fees in 2008.

Additionally, Bisnath said, Duprey had a link to a firm to deal with expansion plans for the group. The London-based firm, IBIS Management Consultants, listed Duprey and his wife Sylvia Baldini as directors, Bisnath revealed. Other officials included Bosworth Monck and Evan McCordick.

“Towards the end of 2008, I eventually had sight of their contract, signed with the CLF group which, to my amazement, included a fee for the percentage of the group’s assets that they were managing,” Carballo notes in a 90-page witness statement submitted to the inquiry. “And therefore when we forced Lawrence Duprey to terminate their services, legal action was served on CLF for millions of US dollars.”

Bisnath also noted that Duprey, according to available documents, never declared his interest in the firm which was hired to project manage billions worth of Florida projects pushed through by Duprey. The company was called DYL, standing for Duprey, John Yanopoulos and Clico director Geoffrey Leid.

“Did Mr Duprey ever declare his interest in that company?” Bisnath asked

Carballo replied,“I don’t know. Prior to May 2008 I cannot say, but post May 2008 no, I cannot recall a declaration of interest in DYL.”

Yet, the Florida projects eventually faltered, Bisnath said, despite huge investments of Clico money. As an example, Bisnath cited the Capri project into which the group sank $2.8 billion (US$445 million).

Bisnath noted that in the end, the “empire” of 289 companies within the group built by Duprey was propped up by only three companies which had reliable revenue flows.

“Three companies out of 289 companies were propping up this entire group,” Bisnath said. “Was this not highly unsatisfactory?”

“Of course,” Carballo replied.

Under cross-examination by Hosein, Carballo agreed that he may have been used by his former boss when the group’s liquidity problems were longer capable of being masked.

“Did it ever occur to you that Mr Duprey left you in the hot-seat, that you were used by the company executive chairman to achieve his purposes?” Hosein asked.

“It is possible, I never gave it any thought,” Carballo, a former top-official at Angostura Holdings Limited, said.







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