By Andre Bagoo Wednesday, March 13 2013

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One Woodbrook Place,Tragarete Road, Port-of-Spain. ...

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CHAIRMAN of the Commission of Inquiry into the collapse of CL Financial (CLF) Sir Anthony Colman has sought legal advice over disclosures that four of the 14 partners of auditors PricewaterhouseCoopers (PwC) own luxury apartments in a development built by a subsidiary of CLF, a firm PwC audited.

Newsday understands from reliable sources that Sir Anthony yesterday called a meeting of counsel to the inquiry in London for the purpose of discussing the issues raised by disclosures over the ownership of the apartments.

The meeting came after an exclusive report by Sunday Newsday which first disclosed the real-estate transactions of PwC’s head Colin Wharfe, the head of its insurance practice Keith Daniel, head of risks and control services Anton Gopaulsingh and energy practice partner Steve Ragobar.

The auditors were last week subject to grilling at the Colman Inquiry as lawyers sought answers over whether the firm carried out its duties properly in its audits of the CLF’s books over the years leading up to its collapse in 2009. In particular, PwC officials were questioned over a list drawn up by partners of clients whom the firm had to “satisfy” as well as apparent gaps in audit practices, such as a failure to check the books of CLF when auditing subsidiaries.

Sources stated Sir Anthony — who is currently in Singapore — was due to hold a teleconference yesterday afternoon with the lawyers to discuss the report. A public relations official from PricewaterhouseCoopers United Kindgom (UK) yesterday said the UK branch of the firm is “aware” of the ongoing Commission of Inquiry but was unaware of the disclosures in relation to the acquisition of apartments by the auditor partners.

“PricewaterhouseCoopers takes its reputation extremely seriously,” said Mike Davies, director of global public relations, based in the UK. “We have standards and procedures that we expect our firms to follow but we don’t comment on specific ongoing court matters.”

Under Ministry of Finance regulations, all residential properties are entitled to exemption from stamp duty up to $850,000. Thereafter, a graded rate (3 percent to 7.5 percent) is applied. Two of the partners’ apartment acquisitions – Wharfe’s and Daniel’s – were stamped “adjudged not chargeable” for duty up to $850,000. In addition, their deeds bear stamps indicating BIR duties of $173,590.18 and $201,880 respectively paid.

The Minister of Finance Larry Howai on Monday had stated he would conduct checks into the circumstances surrounding the transactions. He yesterday stated that the transactions appeared in line with the ministry’s regulations.

PwC TT last night confirmed the real-estate acquisitions of its partners. The firm issued a statement saying all the partners paid stamp duty as per the requirements of the law.

“PwC TT partners have paid all stamp duty required to be paid in respect of properties purchased at One Woodbrook Place. Each property was purchased at market price and each deed clearly has stamped on it the amount for which stamp duty was paid,” the firm said in a press release issued via a company called Mango Media Caribbean Inc. PwC did not deal with issues arising from the ownership of the apartments but said, “all transactions have met applicable professional independence requirements.”

All of the transactions had to have had the approval of the Port-of-Spain Corporation under laws governing the issue.

Port-of-Spain Mayor Louis Lee Sing, who granted formal approval for the transactions, yesterday described the transactions as “wrong” stating they served to undermine confidence in the auditing profession.

“I think it is absolutely wrong,” he said. “It is the kind of action that lends itself to the wrong conclusion. Everything may be legal but the very nature of the transaction is the problem. You should not engage in transactions of this nature with a firm over which you presided. The outcome of choosing to be an auditor is that you have to close your eyes to certain transactions.”

Lee Sing continued, “Even if you no longer hold a brief when you carry out a transaction like this people will then begin to question what led to the transaction in the first place, what circumstances may have happened prior to it culminating in a deed dated at a specific date.”

Lee Sing said as Mayor his approval was simply as a matter of formality and he does not look behind the details of the transactions involving One Woodbrook Place.