Central Bank, Clico sue major players over collapse of Clico empire

Port-of-Spain: Almost two and a half years since the collapse of insurance giant CLICO, the Central Bank and CLICO have initiated legal civil action against the major players involved for misallocation and misappropriation of funds leading to the collapse of the multi-billion dollar company.

The list against whom legal action will be taken includes the former chairman of CL Financial, Lawrence Duprey, the former chairman of Home Mortgage Bank (HMB), Andre Monteil, CL Financial Limited, Dalco Capital Management Limited and Stone Street Capital Limited.

The claims include allegations of mismanagement of CLICO and misapplication and misappropriation of its income and assets to the detriment of its policyholders and mutual fund investors.

A statement from the Central Bank says they are seeking damages, equitable compensation and declarations related to certain agreements and property of CLICO. They will go before the civil court to allege breach of statutory and common law duties and related accessory liabilities on the part of the defendants and will highlight what they deem certain egregious transactions involving the use of CLICO’s assets and income to its detriment.

That would include transactions related to shares in Republic Bank Limited, drinks transactions including Lascelles de Mercado, energy transactions including the sale of CLICO’s stake in CLICO Energy Limited, Florida property transactions and the sale of 7 million HMB shares.

The Central Bank and CLICO will try to prove to the court that the private interests of Duprey and Monteil and their companies, took precedence over the interests of CLICO, its policyholders and mutual fund unit investors, a lack of proper governance and serial mismanagement, and improper dealing with CLICO’s assets and the funds of policyholders and mutual fund unitholders.

The Central Bank says this action is based on the forensic investigations it commissioned the into the affairs of CLICO. It says the forensic work is continuing and may result in the
expansion of this claim and/or further action.

In April the manager of the Clico Investment Bank (CIB) had commenced civil proceedings against Andre Monteil, Richard Trotman, First Capital Limited and Stone Street Limited arising from the failure of CIB.