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Clico Energy resurfaces in Court of Appeal
State-controlled CL Financial (CLF) has scored a minor victory in its legal battle over the US$47 million sale of its subsidiary Clico Energy shortly after Government’s takeover of the conglomerate.
CL Financial, whose board has a majority of government-appointed directors, yesterday won a procedural appeal against Proman Holdings and Consolidated Energy Ltd. Those companies, which held 49 per cent of Clico Energy before February 2009, purchased CL Financial’s 51 per cent stake in Clico Energy in February 2009, three days after Government’s bailout. The shares were subsequently valued at approximately US$130 million, according to an attorney in yesterday’s hearing.
Delivering an oral ruling at the Hall of Justice in Port-of-Spain yesterday afternoon, Chief Justice Ivor Archie and Appellate Judges Peter Jamadar and Prakash Moosai ruled that the trial judge hearing the case widened its scope by ordering that CL Financial disclose documents related to the sale of its assets since 2009.
Presenting submissions on behalf of CL Financial, its attorney Deborah Peake, SC, said the records of subsequent sales were irrelevant as the lawsuit is centred around the deal which was struck by former CLF chairman Lawrence Duprey before he lost control of the company. She argued that all other deals since 2009 were not done by Duprey. She described the sale as a “clandestine deal” which was unique.
“They are on a fishing expedition for something that may help with their case, but this will clutter the court with unnecessary documents,” Peake said.
Jonathan Walker, who led Proman’s legal team, admitted that the scope allowed by the trial judge was too wide but maintained that the documents were necessary to demonstrate that his client’s deal was legitimate as compared to others that followed it.
“They have sold seven assets so far but all we know is what is reported in the newspapers,” Walker said.
After hearing their submission, the appeal panel decided to allow the appeal and instructed Walker that he may reapply for the disclosure before the judge, but in more specific terms.
The next hearing of the case before the trial judge to hear Proman’s fresh application and to set dates for a trial will take place later this year.
The Appeal Court ordered Proman to pay two thirds of CL Financial’s legal costs for bringing the appeal.
CL Financial’s attorneys are claiming that the deal should be held to be illegal, null and void based on several acts by Duprey, which they contend were done contrary to the company’s best interest.
They are contending that Duprey acted without board approval and in direct contravention of the company’s Memorandum of Understanding (MOU) with the Government, which precluded it from disposing of its assets following the bailout. The are also alleging that it was done without an independent valuation.
Proman is claiming that the deal was legitimate and that it is not guilty of any wrongdoing.
Clico Energy owned Industrial Plant Services Ltd (IPSL), a company which operates five methanol plants, two ammonia plants and a seven-plant complex which produces urea, melamine and UAN solution in Point Lisas, according to its website.
CLF owned a 56.53 per cent stake in MHTL which it was eventually forced to sell to Proman for US$1.175 billion (TT$ 7.485 billion), following a ruling of the International Court of Arbitration in 2014. As a result of the deals, Proman, through its Barbados-based subsidiary Consolidated Energy Ltd (CEL), now wholly owns both MHTL and Clico Energy.
CLF was also represented by Fyard Hosein, SC.