EXECUTIVE SUMMARY
The following is the executive summary of the CLICO Forensic Audit
Our interim report as of December 5, 2011 noted that we were unable to secure all relevant documents to complete the analysis of CILâs intercompany balances. We recommended that further work be completed to secure documents, further analyze these balances and trace funds to confirm the uses to which they were put. In addition, we recommended that the investigation of related party transactions be completed.{{more}}
This report sets out our additional findings related to these areas of investigation.
Intercompany balances
With respect to intercompany balances, we selected 119 transactions with a total value of over $300m for further review and analysis, including funds tracing, and obtained and reviewed further documentation. While we did not find all of the documentation required to further analyze all of these transactions, for those transactions with supporting documents and/or for which we completed funds tracing we did not identify any issues.
Our analysis included a review of CILâs balance receivable from CL Financial, which amounted to some $11.5m, a balance that was written off effective December 31, 2008 on account of the financial difficulties encountered by CL Financial in Trinidad and Tobago. We found documents, including correspondence from Mr. Lawrence Duprey, confirming that $3.5m of that balance receivable related to a loan in the name of Mr. Duprey, which was repaid on his behalf by CIL.
As part of our analysis, we also obtained additional information relating to the payment we previously identified of $3.333m apparently paid by CIL to the law firm of Thompson and Associates in January 2009. In summary, we found that:
- The Thompson and Associates invoice, purportedly for legal fees and retainers and used to make the payment by CIL was false. It was not an invoice issued by the law firm and was not created solely to facilitate the payment and conceal its true nature, which was partial payment of a substantial gratuity to the benefit of Mr. Leroy Parris, the former Chairman of CIL and CHBL;
- The timing of both the creation of the invoice on December 30, 2008 and the related cheque payment on January 16, 2009 corresponded with growing concerns regarding the financial status of CL Financial and related companies in Trinidad and Tobago, which culminated in the Central Bank of Trinidad and Tobago announcing on January 30, 2009 that it was providing financial support to the CL Financial group. In particular, we found that the submission of the invoice for processing and payment occurred after meetings between the Central Bank of Trinidad and Tobago and representatives of CL Financial regarding financial support.
Related Party Transactions
We identified a considerable number of related party transactions over and above the transactions that were declared to us in response to requests we made to CIL and its subsidiaries.
We noted a substantial payment of commissions to a company controlled by Mr. Parris on May 8, 2009, shortly before the appointment of the Oversight Committee under the terms of the Memorandum of Understanding (“MOUâ) between the Government of Barbados and CHBL dated May 12, 2009. Under the MOU, the Oversight Committee was to oversee the financial affairs of CHBL and its regulated subsidiaries and CHBL agreed that its regulated subsidiaries (including CIL) would not make bonus or ex gratia payments to Directors, management or other senior officials while the MOU was in force.
We found that certain CIL executives and advisors paid less than third parties when they acquired real estate from development companies in the CIL group.
The full report may be downloaded from www.searchlight.vc
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