Forensic investigators looking into the financial transactions of the collapsed CLICO International Life (CIL) has made a startling revelation about a $3.33 million payment, which was purportedly made by CIL back in January 2009 to Thompson & Associates, the legal firm operated by late prime minister David Thompson.
In their much-anticipated report of June 21, 2013, which was unsealed by the court earlier today, the investigators also highlighted a number of other questionable transactions, including an $11.5 million write off to CLICO’S Trinidad-based parent company, CL Financial, whose former executive chairman of Lawrence Duprey personally benefited from a $3.5 million loan repayment by CIL.
The CIL money trail also led investigators to probe a $3.3 million payment, destined for Duprey’s protégé in Barbados – Leroy Parris, who is the former executive chairman of CIL and its Barbadian parent CLICO Holdings Barbados Limited (CHBL).
“In summary, we found that the Thompson & Associates invoice purportedly for legal fees and retainer and used to make the payment by CIL, was false,” the Forensic and Dispute Services team of Deloitte & Touche LLP of Canada said in the executive summary of their 15-page report, which came on the heels of a more expansive 60-page report on December 5, 2011.
They found that the actual invoice submitted for payment was not issued by Thompson & Associates, but “was created solely to facilitate the payment and to conceal its true nature, which was partial payment of a substantial gratuity to the benefit of Mr Leroy Parris, the former chairman of CIL and CHBL.”
“The timing and creation of the invoice on December 30, 2008 and the related cheque payment on January 16, 2009 corresponded with growing concern regarding the financial status of CL Financial and related companies in Trinidad and Tobago, which culminated in the Central Bank of Trinidad and Tobago announcing on January 30, 2009 that it was providing financial support to the CL Financial Group,” the forensic auditors noted.
They further revealed that “submission of the invoice for processing and payment occurred after meetings between the Central Bank of Trinidad and Tobago and representatives of CL Financial regarding financial support.
“We identified a considerable number of related party transactions over and above the transactions that were declared to us in response to requests we made of CIL and its subsidiaries. We noted a substantial payment of commissions to a company controlled by Mr Parris on May 8, 2009, shortly before the appointment of the Oversight Committee under the terms of the memorandum of understanding (MOU) between the Government of Barbados and CHBL dated May 12, 2009,” the report added.
It further noted that under the MOU, the Oversight Committee was to oversee the financial affairs of CLICO Holdings Barbados Limited and its regulated subsidiaries, including CIL.
It also revealed that the CHBL had agreed that its subsidiaries would not make bonus or ex gratia payment to directors, management or other senior officials while the MOU was in force.
“We found that certain CIL executives and advisors paid less than third parties when they acquired real estate from development companies in the CIL group.”
With respect to inter-company balances, the investigators said they selected 119 transactions with a total value of over $300 million. These were subjected to further review and analysis, including funds tracing.
The investigators also sought to obtain and review additional documentation.
“While we did not find all the documentation required to further analyze all of these transactions . . . those transactions with supporting documents, and or for which we completed funds tracing, we did not identify any issues,” the forensic auditors stressed.
Based on their analysis, the forensic team also said $11.5 million due to CIL by CL Financial in the form of receivables was written off effective December 31, 2008 due to the financial difficulties encountered by the Trinidad-based CLICO parent company.
“We found documents, including correspondence from Mr Lawrence Duprey confirming that $3.5 million of that balance receivable related to a loan in the name of Mr Duprey which was repaid on his behalf by CIL,” the executive summary of the report stated.
When contacted today, Parris’ attorney Hal Gollop, QC, told Barbados TODAY, he had not yet seen the report.
However, he maintained that the $3.3 million was a legimate payment due to his client, who he said was anxious to return to the High Court to have the injunction, which has frozen his assets, lifted.
“We have not been able to get back in court to have that injunction discharged. The return date was February 16 and now almost March 16 and we have not been able to get back into court on our application to discharge the injunction. That order was made since the 29 January,” noted Gollop.
In a brief comment, President of the Barbados Investors and Policyholders Alliance (BIPA) June Fowler said she was happy the report had finally been unsealed, while insisting on the need for transparency in the CLICO process.
“This whole thing should be about transparency. We want to know that if there has not been anything untoward, the policyholders have a right to know how their funds were used over the years,” said Fowler, who was yet to study its findings.