Angered that the maxi door slammed on his elbow, a gunman on Wednesday night opened fire on a maxi driver killing him while passengers looked on in fear.
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We go mash up the place
I have already written about the financial innovation that was CL Financial in its recognition of the risk averseness of capital resources held in T&T and that the need to diversify the economy requires local capital to be invested in higher risk ventures so as to earn foreign exchange. The underlying idea was to collect low-risk capital via the EFPAs (Executive Flexible Premium Annuity) and invest this in production assets in many different markets and in different parts of the world so alleviating most of the risk by portfolio diversification. Listen to what Wikipedia had to say about CLF:
“CL...was the largest privately held conglomerate in T&T and one of the largest held corporations in the entire Caribbean. It was expanded into a diversified company by Lawrence Duprey...encompassing 65 companies in 32 countries worldwide with assets of over US$100 billion.”
CL financial, as other global companies, eg, AIG of the US, found itself in liquidity problems given the collapse of the global economy (sub-prime mortgage) and, as AIG with the US government, had to seek the aid of the T&T Government for a bail out. Other international companies have recovered, have repaid the bailout funds and are again in operation—not CL Financial. The obvious question is why? Successive governments of T&T saw the bail out, not as protecting CL Financial and its companies so that they could live and operate another day, but to compensate the public investors in the group by liquidating some of the group’s assets. Some commentators were even concerned that after the assets were sold and the bailout money repaid, those at CLF would have some assets left! To date, the T&T Government claims that it has bailed out the group to the tune of some $20 billion plus (TT). However, not all of this is hard cash since the public investors are indeed holding government paper, redeemable many years hence.
CL Financial has already proposed a repayment scheme to the current Government and in the absence of a renewed shareholders agreement wishes to restructure its board and proceed with the business of providing global services and earning foreign exchange, which is in short supply locally. However, this Government with its non-entrepreneurial culture, sees that maintaining an integrated global business runs a definite last behind getting repaid its bailout funds, which include the value of its long-term paper. What has not occurred to this Government is: what is the purpose of money, of capital, if not in our case to invest and so provide companies that earn foreign exchange income. Our Government has indeed invested in CL Financial and surely, not to dismantle it. Government is part owner of a massive conglomerate, with government paper to be redeemed years down the road, and with little or no business sense is talking about liquidation!
Compare this to the team comprising Prof Ken Julien and backed by Prime Minister Dr Eric Williams, when the decision was made to borrow money to build Pt Lisas to take advantage of the flared gas. Though mistakes were made, the Government in those days was entrepreneurial and understood the value of an investment in a capacity that could earn foreign exchange. Indeed, a bust in the global energy industry and poor advice by the IMF forced the sale of the Pt Lisas plants to pay debts, though we still benefit from the use of the indigenous gas and taxes. It is a valid comparison since the theme is common, owning a national production resource that earns foreign exchange.
The Government of T&T has already sold CL Financial shares in the local methanol plant for some $7.5 billion (TT) and is lining up the other companies, including shares in a methanol plant in Oman—two plants that earn foreign exchange in the energy industry, in which we are supposed to be skilled. Listen to the Minister of Finance:
“United Shareholders Ltd, representing the CL Financial shareholders had intended to add two people to the board at the July 26th meeting, threatening government’s control of CLF and the companies involved…Government could not sit idly by…and had to seek to put CLF into liquidation.”–Mash up the place.
This Government that has been talking about diversification and the need to encourage locally the creation of globally competitive export companies has by this liquidation threat demonstrated that it has no clue about economic development, capital/wealth generation.