By Andre Bagoo Thursday, January 12 2012

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Firm point: Former Finance Minister Karen Nunez-Tesheira makes a firm point during her testimony at the Clico Commission of Inquiry, Winsure Building,...

FORMER Finance Minister Karen Nunez-Tesheira was a woman trapped in the middle of a series of events orchestrated by male figures who – through secret meetings and mysterious failures to comply with reporting requirements–effectively kept her in the dark as to the true state of affairs at CL Financial (CLF) and the Clico Investment Bank, according to testimony yesterday.

The former Finance Minister, who gave evidence yesterday at the Clico Commission of Inquiry at the Winsure Building, Richmond Street, Port-of-Spain, painted a picture of being a finance minister who occupied the key post while others around her pulled the strings in January 2008. In evidence in chief which lasted about two hours, the former minister said:

* former Minister in the Ministry of Finance Mariano Browne, who was in charge of the portfolio related to State enterprises, failed to tell Nunez-Tesheira that State enterprises had, up to December 2008, pumped billions of taxpayers funds–unsecured–into CIB;

* Browne also failed to alert her that the State enterprises were having trouble withdrawing their funds and that he was approached, one evening, by CLF financial fixer, and former UNC minister, Carlos John who asked Browne to attempt to exert influence to stop state enterprises from taking their money out;

* that even as he met with Nunez-Tesheira to seek government help, former CLF executive chairman Lawrence Duprey was still “wheeling and dealing”, attempting to pitch deals to the State, as CLF officials withheld the true story of the trouble of CLF;

* Central Bank Governor Ewart Willliams did not inform Nunez-Tesheira of problems at CLF/CIB, even after he had at least one secret meeting with former CLF director Dr Bhoe Tewarie; and

* the first person Nunez-Tesheira turned to for advice and instructions after ascertaining the extent of the trouble at CLF was former boss, former Prime Minister Patrick Manning.

Of the investment of billions of Investment Note Certificates (INCs) by State entities such as National Gas Company (NGC) and the National Insurance Board (NIB), Nunez-Tesheira, who for most of her tenure was focussed on key legislative reforms of the financial sector, said she only learned of this practice in January 2009.

“I was so shocked,” she said when she learnt of the practice during a meeting with the then Prime Minister and Central Bank Governor Ewart Williams.

“Because I did not know about it. Minister Browne has the responsibility for State enterprises....I never knew about INCs and Minister Browne never told me about it.” She said she would meet with Browne on Tuesday mornings to be briefed and this was never raised.

“That was why I was floored. I was absolutely floored that we had that amount of exposure,” she said.

“I said how could all of this be happening, State entities investing in the billions and I am told nothing?” She added, “I had to imagine that he (Browne) was not aware. I don’t want to speak for Mr Browne.”

Later, the NGC contacted Nunez-Tesheira in relation to the INCs.“I said how could you be taking billions of taxpayers money and investing in an entity and not making sure it was secure?” she said. “They did not get a good reception from me.”

Also at the meeting with the Governor and the Prime Minister, it was revealed that Browne had been approached by Carlos John.

“John had approached Mr Mariano Browne about trying to persuade those entities to re-invest,” she said. “When the Prime Minister called him in, the Prime Minister asked him if it is accurate that he had been approached and he said yes.” It was unclear how the Prime Minister knew Browne had been approached.

When she first learnt of the troubles at CLF, which she said was on January 14, 2009, Nunez-Tesheira contacted the then Prime Minister.

“The first thing I would have done is speak to the Prime Minister. I would have spoken to him about what I discovered and look for guidance,” she said.

Of the Central Bank Governor, Nunez-Tesheira said she never took steps to investigate what went wrong in terms of regulation of CLF.

“I had a lot of confidence in the Governor and I have no reason to indicate otherwise,” Nunez-Tesheira said. “Why would I do a forensic investigation?”

Of the January 30, Memorandum of Understanding (MoU) drawn-up after meetings of CLF officials, Nunez-Tesheira said, “It was done with a lack of information. CLF was less than forthcoming with giving us their portfolio.” Eventually, at one meeting in January 2008, former CLF corporate secretary Gita Sakal gave the game away.

“After going around in circles and they being less than forthcoming, Sakal said words to the effect that ‘the game is over. Forget it we don’t have any assets to sell’,” Nunez-Tesheira said. At the same time, at a similar pre-MoU signing meeting, Duprey, was “wheeling and dealing.”

“What struck me at that meeting was that there was no question of a credit line or of handing over money to CLF as the crisis had less to do the with global economic situation and more to do with mismanagement,” she said. “It seemed to me that Mr Duprey did not understand the gravity of the situation and he was still wheeling and dealing,” she said. “I was in utter amazement to hear Mr Duprey speaking in that manner and that he still wanted to cut a deal.”

Even after the MoU was signed, things were hidden. The sale of Clico Energy was not disclosed.

“That was never disclosed to us,” Nunez-Tesheira said. “They had not only sold their share but they had sold the share they held in trust.” She said the State was not even aware that CLF held shares in the company as it had not been disclosed on a list of assets.

She noted already disclosed reports that she refused to give in to pressure to allow former CLF officials to be able to take out their money as “Third Parties” under the MoU.

“Mr Monteil and all of those who fell into that category did not benefit from that proposal,” she said. “The Government did not give a line of credit....You cannot take taxpayers dollars and hand it over to these people. I could not defend it as a minister. It would not reflect well on the Ministry.”

Of Angostura, she noted that, “Angostura Holdings had been mismanaged.” The profits of that company had been pumped into CLF.

Of CLF generally, she noted the need for more regulation.