CoP orders ACIB to probe CL Financial assets sale

Trincity Mall - File Photo

Police Commissioner Allister Guevarro has directed the Anti-Corruption Investigation Bureau (ACIB) to launch a criminal probe into the sale of key CL Financial assets as concerns mount over the handling of the company’s liquidation.

The move follows a High Court injunction issued on October 13 that halted the sale of the Trincity Commercial Centre Ltd, including Trincity Mall, one of the conglomerate’s most valuable properties. The injunction came just hours before the deal was reportedly set to be finalised at 4 pm on Monday.

Justice Kevin Ramcharan, who has been overseeing the CL Financial (CLF) liquidation since the company was wound up in 2017, granted the injunction after the state applied for urgent relief. The order was subsequently served on attorneys for Grant Thornton, the court-appointed liquidators. The matter is expected to return to court on October 27.

The Attorney General was ordered to file an injunction application by October 21, which is to be served only on the liquidator.

Guevarro’s directive to the ACIB comes in response to a series of letters sent to Attorney General (AG) John Jeremie by Legacy Shareholders Ltd, a group representing CLF shareholders and residual creditors. Similar letters have been sent by other CLF shareholders to Guevarro and Finance Minister Dave Tancoo, calling for urgent action.

The correspondence alleged irregularities, undervalued sales, and a lack of transparency in the disposal of the conglomerate’s multibillion-dollar assets. Shareholders have alleged that national assets are being sold at fire-sale prices to politically connected buyers.

A recent letter, sent to the AG by attorneys for Legacy Shareholders on October 7, detailed what was described as “grave concerns” over the sale of CLF assets under questionable circumstances, including the 2023-2024 sale of the Trincity Commercial Centre (Trincity Mall) for $505 million, a figure reportedly almost half the 2021 court-approved valuation of $900 million.

The government is CLF’s principal creditor, having injected $28 billion during the 2009-2012 bailout of the once-largest private conglomerate in TT before its 2009 collapse.

Legacy Shareholders claims the sale occurred without full disclosure of valuation methods, competitive bidding processes, or explanations to shareholders and creditors. The preferred bidder, Ansa McAl, allegedly withdrew before the mall was sold to a consortium including John Aboud, Anthony Rahael, Kallco Ltd, and Fides Ltd.

The letter claimed that the offers reportedly fell below the 2021 court-approved minimum valuation of $900 million.

“Taken collectively, these matters give rise to a reasonable apprehension that the liquidation is not being conducted in an open, even-handed, or statutorily compliant manner,” the letter said, urging the AG to launch an independent investigation and audit.

Other transactions Legacy Shareholders cited included: Holiday Inn Express, Trincity, sold in 2019 for US$16 million; CL Marine Ltd, transferred to the government in 2020 for $119 million; and No Man’s Land, Tobago, roughly 398 acres, sold for about US$1.47 per square foot, without open bidding.

The letter alleges that stakeholders have not received formal reports, accounting or liquidation reports since 2017, in violation of the Companies Act, which mandates periodic financial statements and transparent accounting.

“The joint liquidators, as officers of the court, owe fiduciary obligations of candour, impartiality, and accountability to the company as a whole. Their duty extends to all stakeholders, not solely the government as a creditor. The letter contended alleged deviations from court-approved valuations, with acceptance of bids reported as being below the sanctioned floor price. It also said no public explanation has been provided for the $505 million valuation of 53 hectares and 661,000 sq ft of developed commercial space, potential conflicts of interest and the exclusion of shareholders for more than five years despite ongoing asset disposals.

“Taken collectively, these matters give rise to a reasonable apprehension that the liquidation is not being conducted in an open, even-handed, or statutorily compliant manner,” the letter said.

It added, “The recent sale of the Trincity Commercial Centre encapsulates the broader deficiencies in transparency and possible inequity.”

The shareholders’ group requested a formal review of the liquidators’ compliance with their legal and fiduciary duties; an independent audit into the sale of Trincity Commercial Centre, including valuations and bidding procedures; publication of liquidation accounts and reinstatement of stakeholder oversight.

While acknowledging the government’s right to recover more than $28 billion injected during the 2009 bailout, the letter insists recovery “must be conducted transparently, lawfully, and in accordance with equitable principles.”

“Our client does not oppose the government's recovery of public funds, and in fact, has encouraged an efficient and expeditious settlement of the same.

“The present state of affairs, where billions in assets have been sold without adequate disclosure or accounting, erodes public confidence and undermines the rights of legitimate shareholders and creditors. This lack of accountability can no longer be ignored.”

Prime Minister Kamla Persad-Bissessar, while in opposition, had warned of a “fire sale” of CLF assets at undervalued prices to friends and financiers of the then government.

In May, as prime minister, she promised to lay the Clico commission of inquiry report in Parliament. She said it was intolerable that the PNM “hid that report from the Parliament and therefore the people of TT.”

Persad-Bissessar said, “That was one of the greatest economic meltdowns that we have had.”

She added that the population deserves to know the details in the report and what actions can be taken to prevent a repeat of this scandal.

Most recently, she assured that CLF assets would not be sold off for less than their worth.

Jeremie was approached for comment on the injunction on Monday night, but did not respond to a message sent to him via WhatsApp.

The liquidators, Grant Thornton, received the court’s approval for the sale of Trincity Commercial Centre in 2021, but it was only put on the market in September 2022.

In its report to the court in October 2023, the liquidators noted that in April 2023, they had received four offers for the shares in Trincity Commercial Centre and two for Trincity Mall property assets.

“None of the offers received were equal to or higher than the approved, minimum sale value(s) ascribed to the asset via the order made by the court on November 11, 2021, which, inter alia, permits the joint liquidators to sell the shares in Trincity Commercial Centre or Trincity Mall,” the report noted. Also up for sale was Long Circular Mall, St James.

The ACIB was returned to the Office of the Attorney General in a ministerial realignment on October 4.