PORT OF SPAIN — The billion-dollar purchase of property in Florida known as the Green Island Transaction by CL Financial subsidiary British American was deemed “corrupt” by the CLF board of directors.
However, this bit of pertinent information was not passed on to the conglomerate’s auditors and the transaction continued as planned.
So said former CLF financial director Michael Carballo as he was yesterday recalled to the witness stand of the commission of enquiry into the failure of CL Financial and four of its subsidiaries.
The 12th evidence hearing of the enquiry yesterday began at the Winsure Building, Richmond Street, Port of Spain.
Carballo who had previously testified at the enquiry was recalled yesterday to be further re-examined by British Queen’s Counsel Peter Carter, counsel to the commission.
In January 2008, about 6,000 acres of land in Osceola County was purchased for US$300 million by British American Insurance Company Limited.
BAICO is an 82 per cent owned subsidiary of CL Financial.
On September 4, 2008, the land deal was brought to the attention of the CL Financial board. Carter yesterday read excerpts of the board meeting.
The Green Island issue took up 90 per cent of the board meeting, Carballo said.
“Members were of the view that based on what was presented to them that no prudent person acting in the best interest of the company could have endorsed such a transaction,” the board minute stated.
“The view was that transaction seems corrupt and can be seen as gross negligence on the part of the chairman of BA and no person with his experience could have thought that it was in the best interest of the company or the shareholders. The justification by the chairman just did not make sense,” the minute stated.
Carter said it was “strong words even for a minute”.
Carballo said during the meeting “many more expressive terms were used”.
BAICO chairman Brian Branker was fired and replaced by Vishnu Ramlogan as a result of the deal, Carballo said.
But despite the CLF board’s concerns of the Green Island Transaction, the conglomerate’s auditor, PricewaterhouseCoopers was not made aware of the issues.
The transaction also continued as planned. (Express)