Have you ever wondered what happens when a massive financial institution, one that affects the lives of countless individuals, faces collapse? For the people of Trinidad and Tobago, this question became a stark reality over a decade ago with the unraveling of CL Financial. Now, a long-awaited chapter in this complex story is finally unfolding in court.
The Heart of the Matter: What is This Lawsuit All About?
Imagine a company so large it controls over $100 billion in assets across dozens of companies in many countries. That was CL Financial. Its reach extended into banking, insurance, energy, real estate, and more. But beneath this impressive facade, serious problems were brewing, especially within its insurance arm, Clico.
The Central Bank of Trinidad and Tobago, along with Clico itself, has brought a lawsuit against several key figures connected to the conglomerate. At the center of this legal battle are the late CL Financial chief, Lawrence Duprey, Andre Monteil, and Gita Sakal (a former corporate secretary). Also named are companies associated with Duprey and Monteil: CL Financial, Dalco Capital Management, and Stone Street Capital Ltd.
The core accusation is quite serious: the lawsuit claims that Clico's operations were "grossly deficient." Essentially, it alleges that the money entrusted by policyholders and investors was misused. Instead of safeguarding these funds, they were supposedly used to support personal lifestyles and private companies, leading to the financial ruin of Clico and a massive loss for investors.
A Troubled History: The Bailout and Its Aftermath
The problems at CL Financial came to a head in January 2009. Clico and its banking subsidiary, Clico Investment Bank (CIB), faced severe liquidity issues, meaning they did not have enough cash to meet their immediate obligations. Lawrence Duprey sought a bailout from the government, and the Central Bank had to step in, using its emergency powers to take control of the conglomerate.
This intervention was crucial because Clico was burdened with over $12 billion in policyholder liabilities. The collapse threatened not only individual investors but also the stability of the entire national economy. In the months that followed, taxpayers had to inject more than $5 billion to stabilize the financially struggling Clico.
The lawsuit seeks to recover billions of dollars in losses, damages, and restitution. It aims to get answers from those accused about how such a massive conglomerate could fail, causing so much financial distress to policyholders and investors.
The Courtroom Drama Begins: Key Testimonies
This lawsuit, which was first initiated in 2011 and amended in 2013, has finally begun its proceedings before Justice Robin Mohammed. One of the first significant testimonies came from former Central Bank governor Ewart Williams.
Williams was questioned extensively by Andre Monteil's attorney, Christopher George. The attorney highlighted an investigation into Clico's operations from 2005, which recommended that Clico follow the Insurance Act. George pointed out that this investigation was not mentioned in Williams's initial witness statement. Williams also confirmed that Monteil was not among the senior management involved in that particular exercise.
Further questions arose about a supposed deficit in Clico's statutory fund. While Clico's records showed a $500 million excess in December 2007, the Central Bank's calculations indicated a $600 million deficit. Williams clarified that the Central Bank's figure was a "technical" deficit, explaining that their calculations did not account for fixed deposits that were set to expire and were renewed in January 2008. He maintained that his analytical description of the deficit was correct.
Looking Ahead: What This Means for Trinidad and Tobago
The government still holds a 49 percent shareholding in Clico and plans to sell it. Former finance minister Colm Imbert stated in the 2025 budget that approximately $13 billion is still owed from the CL Financial bailout. This ongoing legal battle is not just about financial recovery; it is about accountability and ensuring that such a crisis does not happen again.
The trial continues, and many are watching closely to see how this complex and long-standing case will unfold. It is a reminder of the importance of sound financial governance and the protection of public trust in financial institutions.
