In T&T: CL Financial shareholders to hold meeting on May 14

2 May 2012


No doubt that this will be one of the most highly anticipated general meetings in recent times.

Shareholders of the financially troubled CL Financial group are due to meet in an extraordinary general meeting on May 14 to discuss the proposal by the Government to extend the shareholders agreement that expires next month. The notice of the extraordinary general meeting was published on Monday, exactly two weeks before the meeting, which is due to be held in the Clico Box at the Queen’s Park Oval starting at 5 pm.

The agenda of the CL Financial shareholders’ meeting is to consider the financial position of the company and the extension of the shareholders’ agreement between the Government and the group. In the three-year shareholders’ agreement, which was signed by the Government and CL Financial on June 12, 2009, it was agreed that the Government would have the right to appoint four directors on the seven-member CL Financial board.

By providing the Government with a majority on the CL Financial board, the agreement gave the Government control over the asset-rich conglomerate for a three year period, which ends on June 12. In answering questions  at the Angostura annual general meeting on Friday, CL Financial’s government-appointed chairman, Gerald Yetming said that the Government would be making a claim on the group to recover the billions of dollars that the group has received from the State since the collapse of Clico and Clico Investment Bank in January 2009.

Yetming said there was a recognition that the settlement of the Government’s claims was not likely to be concluded before the June 12, 2012, deadline “and therefore there is an understanding that the agreement will be extended for a period by a shareholders’ meeting of CL Financial.”

CL Financial, which was established in 1993 as a holding company for Clico, is 100 per cent owned by its 325 shareholders—many of whom are former employees and policyholders of Clico or the family members of former employees and policyholders.

According to Clico’s 2009 audited annual report, on September 10, 2009: “The Government injected additional capital into the company by the acquisition of ordinary shares and preference shares. This transaction resulted in GORTT’s ownership of 49 per cent of the share capital of the company.”

The Government’s ownership of 49 per cent of Clico is being challenged by the German minority shareholders of Methanol Holdings (Trinidad) Ltd at an international arbitration in London this month. Consolidated Energy Ltd—comprising MAN Ferrostaal, Helm and Proman—are claiming that the Government’s acquisition of 49 per cent of Clico in effect changed to the ownership of MHTL since Clico owns 56.53 per cent of the methanol group.

The agreements that established MHTL allow the minority shareholders to acquire the majority stake if there is a change of ownership.

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