By Andre Bagoo Sunday, August 19 2012

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LOUIS Andre Monteil, the former PNM treasurer and CL Financial finance director, has taken out a $17 million banking facility with Republic Bank Limited, the majority-owned subsidiary of the State-controlled CL Financial Group, via Stone Street Capital Limited, the Monteil company which was at the centre of a controversial 2007 Home Mortgage Bank (HMB) share transaction.

On May 16, Monteil signed a collateral deed of variation enabling him to gain access to advances under the facility which was first taken out in Stone Street Capital’s name in April, 2011.

On April 11, 2011, Stone Street Capital Limited took out a deed of mortgage with Republic Bank for two premises: No 3 and No 5 Herbert Street, Port-of-Spain (formerly known as “Old House of Refuge Lands”).

By the document signed on May 16 this year, Monteil signed on to the facility, entitling him to personally raise advances and be subject to demands for repayment.

“The principal deed has been stamped to secure banking facilities amounting to seventeen million ($17,000,000.00),” the collateral deed, obtained by Sunday Newsday, reads.

It goes on to state the following: “The bank, at the request of the original borrowers (Stone Street Capital) and the new borrower (Monteil) is desirous of making advances and/or giving and/or continuing to give accommodation to the borrowers and the bank may henceforth in its discretion and if and so long as it shall think fit so to do make and/or continue to make advances.”

It adds that the bank may also “continue to give accommodation to the borrowers whether solely or jointly with any other person or persons whether individuals or bodies corporate or unincorporated upon having the same and such other moneys as are hereinafter mentioned secured to the bank.” The document was signed by Monteil in his personal capacity, and by Lynnette Dann, a director of Stone Street Capital. Monteil also signed as a director for Stone Street Capital. Kimberly Molligan, an attorney and the Stone Street Capital corporate secretary, witnessed Monteil’s signing in his personal capacity and also the signing of the two Stone Street directors.

The $17 million loan facility is with Republic Bank, the country’s largest bank. The majority of shares in Republic Bank (51 percent) are held by CL Financial entities including: Clico (32.3 percent); Clico Investment Bank (CIB) (18.1 percent); First Company Limited (8 percent) and RBC Nominee Services (Caribbean) Limited (0.6 percent). Under the terms of a 2009 bailout the State owns almost all of Clico and controls CLF.

While on the one hand the State is, in a sense, funding Monteil, on the other hand it is also seeking millions in damages from him.

The new variation comes amid an ongoing lawsuit brought by the State against Monteil, Stone Street Capital and others in relation to the controversial 2007 HMB share transaction which pushed the former PNM treasurer into the spotlight and, arguably, precipitated his resignation from several state boards he had been appointed to under the PNM.

Monteil and Stone Street are among several defendants currently facing a civil claim for $110 million in damages in the lawsuit which alleges breaches of company-law and common-law duties.

Monteil’s lawyers have denied any wrongdoing in the case but have admitted to one “technical breach” in relation to the complex series of transactions which saw his overlapping positions on CL Financial and State boards raise questions over the moral fairness of the purchase and sale of the HMB shares. Funds for the sale appear to have been raised and moved around via loans assigned to several companies, including Clico Investment Bank, where Monteil sat on the board.

The lawsuit, brought by the Clico Investment Bank which is currently in State liquidation, is due to resume in the new Law Term, due to open next month.