PORT OF SPAIN, Trinidad, CMC – The former executive chairman of CL Financial (CLF) and CLICO director Lawrence Duprey has been ordered by the High Court to reimburse more than US$139 million to the companies for facilitating a deal to sell shares in what was then called CLICO Energy to Proman Holdings (Barbados) Ltd in February 2009.
Justice Devindra Rampersad handed down the order on Friday in the multi-million-dollar claim brought by CL Financial and CLICO.
It was also ruled that 17 percent of the US$139.4-million that Duprey was directed to pay is to be held in trust for Colonial Life Insurance Company (Trinidad) Ltd, one of the claimants.
In October 2021, Justice Rampersad found that Duprey acted oppressively, unfairly, and with prejudices to the companies by selling the shares.
CL Financial and CLICO together owned a majority 51 percent stake in CLICO Energy, which was sold to Proman Holdings on February 3, 2009, for US$46.5 million.
In his October 2021 ruling, the judge did not immediately assess the money to be paid by Duprey to the companies but instead invited submissions from attorneys representing the various sides to file requests on the issue.
While Justice Rampersad had ruled against Duprey, the former CL Financial chairman did not appeal the judge’s findings.
Duprey did not file an appeal, which cleared the way for the judge to deliver the order.
In his ruling, Rampersad stated that Duprey had acted without due care and diligence and even failed in his fiduciary duties under the Companies Act, as he needed help to work honestly and in good faith with a view to the company’s best interest.
In the case, CL Financial and CLICO argued that Duprey sold the 84,986,145 shares in CLICO Energy, owned by CL Financial and CLICO, just three days after the Government bailed out the CL Financial group in January 2009.
In its claim, attorneys for CL Financial and CLICO contended Duprey did not have the authority to sell CLICO’s 17 percent stake in CLICO Energy, which they claimed was held by CL Financial in trust for CLICO.
In addition, the companies claimed the shares sold were valued at US$130 million, way in excess of the $46 million for which Proman had purchased it.
In its defense, however, attorneys for Proman argued that CLICO did not have its stake registered to avoid paying stamp duty.
However, in his ruling, Justice Rampersad stated that the court was convinced the transfer could still be registered and that all CLICOs needed to pay the requisite stamp duty and penalties.
The judge said he was of the view Proman was aware of a sub-committee for the disposal of assets of the CL Financial companies and “the renewed requirements for shareholder resolutions, thereby curtailing Duprey’s prior ostensible authority and also failed to make any inquiry whatsoever on the evidence before this court as to whether or not he was authorized to enter into this share purchase agreement in the very unusual circumstances that prevailed at the time.” Rampersad said with the “business-savvy persons” who were involved in the transaction, “the point of this sale at this time with such haste seemed to have been designed to ensure that Proman got it at the price that it wanted rather than at a fair market value ascertained in an arms-length transaction between two equal parties.
“The fact that Duprey did not even utter a squeak in opposition is a testament to the fact that he was working with Proman to do just that,” the judge stated.
Although he noted that Proman officials were wrong to purchase the company from Duprey, Rampersad ruled that their conduct did not constitute fraud.
Rampersad has invited the parties to present additional submissions on whether Duprey, who was unrepresented in the lawsuit, should pay damages for his conduct.
Proman renamed CLICO Energy to Process Energy (Trinidad) after it acquired the company in February 2009.
As part of his 87-page ruling, Rampersad ordered Proman Holdings to return the 51 percent stake held in Process Energy to CL Financial and CLICO.
Proman Holdings was also ordered to pay CLF the dividends it collected from the shares since 2009, plus interest.
On the other hand, CLF was ordered by the judge to reimburse Proman Holdings its purchase price in addition to interest.
When the deal was struck, CLF controlled 34 percent of the shares of Process Energy; CLICO, 17 percent.
Proman owned the other 49 percent.
Proman eventually bought out the shares held by both companies, controlling the entire company, which had a sizeable stake in Methanol Holdings Trinidad Ltd (MHTL) and other profitable energy companies.
The only parties to challenge the 2021 ruling of Justice Rampersad were Proman Holdings (Barbados) and Process Energy (Trinidad) Ltd (PETL). That Appeal Court decision is still pending.
and then  and CLICO director Lawrence Duprey has been ordered by the High){kind=link}