Keith Rowley’s Glorious Moment

By Dr. Selwyn R. Cudjoe
July 31, 2017

Dr. Selwyn R. CudjoeLast Sunday, Jonathan Fenby, author of The General: Charles de Gaulle, suggested that Emmanuel Macron, President of France, was following closely in the footsteps of Charles de Gaulle, founder of the Fifth Republic, by using his office with the same majesty, grandeur, and decorum that de Gaulle did. He clarified: “Both are (or were) very well read, formally courteous and with an attention to detail. Though not as rousing an orator as the general, Mr. Macron uses speeches, as his predecessor of a half a century ago did, as instruments of pedagogy, notably with his address last weekend on the 75th anniversary of the round-up of Jews in Paris, when he did not hesitate to criticize de Gaulle by name for the pretense that the French authorities were not responsible” (Financial Times, July 22).

The emphasis here is on the use of oratory “as an instrument of pedagogy.” Most prime ministers and presidents are at their best when they use their speeches to their publics to instruct, explain and to get them to understand the essence of the public issue that is being discussed. This is exactly what our Prime Minister did with such aplomb at his post-Cabinet meeting on Thursday afternoon.

Anyone who listened to the prime minister could not but be persuaded by the cogent manner in which he offered his government’s rationale for the action it took with regards to CL Finance/CLICO. This was the prime ministerial leadership the public has been waiting for.

I was a director of the Central Bank Board when the issue of CLICO came up. There was always much obfuscation on CLICO’s part when the issue of its management was discussed. . The company was unable (or did not want) to provide the bank’s inspectors with the information they needed to conduct its due diligence functions or to abide by regulations/instructions issued by the Regulator.

CL Finance/CLICO was always two steps ahead of the bank’s inspectors. They knew what was required (and presumably what to hide) so as to keep the inspectors off their case. The Bank’s cumbersome requirements and the inadequate legislative framework (which had changed little since the Insurance Act was promulgated in the 1960s) prevented the bank instructors from ferreting out the information it needed to do its job.

The company did not always act in a responsible manner. There was too much intra-company commingling of funds between CLICO, CIB and CLF companies. When the bailout occurred, members of the CLICO board and senior management felt vulnerable. They were receiving large stipends and were not always operating in accordance with accepted fiduciary practices. According to one knowledgeable financier: “CLICO behaved so badly that it is a miracle that not one director has gone to jail for malfeasance.”

The CLICO business model was in shambles when it appealed to the Central Bank for assistance. CLICO owed a lot of money to its creditors and needed the government’s financial assistance to meet its obligations. The government provided the necessary assistance with the explicit written understanding that CLICO and its parent company CLFinance/CLICO would repay its debts, even if it meant selling off its assets.

Eventually, the Central Bank took direct control of CLICO as was provided for in the Central Bank Act and the government signed agreements with CFL, which, inter alia, provided that the government would have majority representation on the CLF Board. Any responsible lender would want to be sure that it had oversight over a company to which it had loaned a considerable amount of monies.

Over the last eight years my views of the company and its social role have changed. Although its directors acted in a fiduciary irresponsible manner, one needs to keep in mind what the company means to black people, particularly in light of Mario Sabga’s recent statements and the dominant hold his companies have on the economy.

Although CLFinance/CLICO conducted its affairs in an irresponsible manner, it owned the world’s largest (or the second largest) methanol plant. Its purchase of Lascelles in Jamaica (at a considerable sum) made it an important company in rum production. Although these and other purchases placed the company in a precarious financial position, its accomplishments meant a lot to black people and contributed to their ethnic pride.

It is not entirely true, as the Prime Minister suggested, that the business before us “is not about black, blue white or yellow.” He said his major concern resided in “the tax payers getting back the S15B owed to them” by a private entity. It is unwise to downplay the deep sentimental attachment many black people have about Duprey’s achievements.

When President Barack Obama rescued the US auto industry, he did so for the significant economic, cultural, and social value it possesses for the American people. When Ford installed the first assemble line for the mass assembly of automobiles in 1913, it sparked “a radical transformation of both manufacturing and society” (Daily News, October 7, 2013). Saving the US auto industry went way beyond the dollars. Correspondingly, saving CLC goes beyond the dollars.

This observation should not detract from the bright, shining moment when Keith Rowley explained why his government did what it had to do. He must be congratulated for this. One only hopes that he uses more of these occasions for the pedagogical purposes that this country so badly needs.

5 thoughts on “Keith Rowley’s Glorious Moment”

    SEAN DOUGLAS Monday, July 31 2017

    PRIME seafront land in Tobago has been grossly undervalued, at just $10 per square foot, in its recent transfer from Clico to the Government as part of a plant to help pay off Clico’s $15 billion debt incurred in its 2008 bailout by taxpayers. This was the claim made yesterday by Peter Permell, head of the Clico Policyholders Group.
    At a news briefing at Valpark Chinese Restaurant, Permell said a truer valuation would reduce Clico’s debt by a larger amount. “If you don’t transfer the land at the right value, you’ll be short-changing Clico,” Permell said. He joked with reporters that if they know anywhere in Trinidad or Tobago selling land at $10 per square foot, to please tell him so he could contact his bankers to arrange a purchase.

    He contrasted the $174 million valuation of Buccoo Estate as stated by Prime Minister Dr Keith Rowley at last Thursday’s post-Cabinet media conference, to a $866 million fair market figure, which Permell claimed was stated in a PriceWaterhouseCoopers (PWC) report.

    The Buccoo Estate – valued by PM Rowley at $174 million – includes No Man’s Land plus the upmarket Samaan Park Development, the latter which Permell said by itself, is worth $244 million.

    He said a 2016 valuation done by GA Farrell and Associates had said that while Samaan Park was part of the 429 acres of Buccoo Estate lands that were transferred to the Government, the 31-acre Samaan Grove was not considered in the valuation of the overall estate. Permell quoted the Farrell document, “The area includes Samaan Grove which does not form part of this (valuation) exercise.” Further, he cited a real estate agent website, Abrahams Realty, which had individual lots at Samaan Park being offered for sale at a very high value, all of which he said enforces his argument that the Buccoo Estate overall, was transferred for less than its true value.

    He said that agency’s website is selling lots of 7,000 square feet for $1.15 million, working out at $177 per square foot. “Why would you want to exclude Samaan Park, the most valuable part? I calculate that $245 million is the value of Samaan Park.” Permell also queried Rowley’s $174 million figure, saying Clico’s 2016 audited financial statements had valued the Buccoo lands at $187 million. “So the transfer price was $13 million less than its book value…a $13 million loss to Clico.” He quipped, “I never knew that land depreciates in TT.” Permell also asked why the Farrell report had said the land valuation of Buccoo Estate had excluded 16 acres known as service lands or sewer lands. “We have not seen the valuation for those lands,” he said. Permell urged that the land transfer be reversed or alternatively, that the land be offered to citizens to purchase at $10 per square foot.

    “Who is giving the Prime Minister information? He is not infallible; he is not the Pope. He got misinformation.

    I don’t hold him responsible.” Permell said, “The Central Bank Governor must say if he got instructions to transfer the lands. It’s not unlawful for the Government to give instructions to the Central Bank. The Central Bank must ensure it is a proper valuation report.” Calling for clarification from the Government, Clico board and Central Bank, Permell asked, “Who gave instructions for these (Samaan Grove) lands to be excluded?”

  2. CLICO was indeed the author of its own demise. A business model built on the foundation of greed. The interest being paid to share holders was totally unsustainable. However, politicians and the elitist class had thrown billions into CLICO with the hope of enormous returns. Hence the reason why a bail out was necessary.

    But what are the lessons learnt from ClICO? The most important one is get politicians and the elitist involved and if you fail they would use the treasury to secure their investment. It is a win win stituation.

  3. Professor, I am posting video of Dr. Rowley’s News Conference.. I think you need a second look… especially at the end.. during the reporters questioning..

    The only praises I can give Dr. Rowley is his art for hiding ‘strings’.. They say the .03% (ah doh kno weh deh geh dis 1% ting from) were the actual ventriloquist hiding somewhere in the room…

    Well, let’s see how this Tobago land issue plays out… It just might show who Dr. Rowley really is working for… And I can bet it’s not the Tax Payers as he says..

  4. What’s the deal with sandals? A 25 year tax moratorium? That is what I am hearing the consortium has its hands deep in Rowley pocket. Once Sandals set up shop no access to the beach area but exclusive access for Sandals customers.

    After Sandals who else will come knocking at the government door?I suspect the Casino owners are all quietly lining up and waiting to see how this turns out. Perhaps even the bunny ranch will be making inquiries. The commercialization of Tobago has quietly begun. Dr Rowley is making moves to build a Prime Minister residence there perhaps anticipating a future independent of Trinidad. Why else would be necessary to build a palace on the island? The Tobagonians are smart people and now is a good time to “milk the cow”. Oil is no longer king as economies move to electric vehicles.

    1. Maybe the Professor can ‘educate’ we on what the father of the nation thought of a Tourist economy….
      Professor, ent it went something like this… “No educated Negroes will be serving white Trash here” or something to that effect Professor…

      Anyway… I think it .3% not .03%.

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