Monteil: Duprey took over $78m loan

Andre Monteil,
Andre Monteil,

FORMER Clico Investment Bank (CIB) chairman Andre Monteil yesterday again denied there was anything underhanded in him transferring a $78 million loan debt, and $315 million worth of CL Financial (CLF) shares to his former boss, billionaire businessman Lawrence Duprey.

“That’s the deal we agreed to,” Monteil said in his second day of testimony at the trial of CIB’s million-dollar lawsuit against him, former CIB president Richard Trotman and two companies.

In evidence on Tuesday, Monteil defended his borrowing from CIB to finance a share purchase for his private investment firm, Stone Street Capital Ltd.

The CIB – which is currently in compulsory liquidation and therefore under the management of the Central Bank (CB) — sued Monteil alleging that a $78 million loan paid out in 2007 to facilitate Stone Street Capital’s acquisition of Clico’s 43.8 per cent interest in the Home Mortgage Bank (HMB), of which he was its former chairman until April 22, 2008, breached the bank’s internal controls and was an act of “self-dealing” given posts held by Monteil in the entities involved.

The CIB is seeking the return of some $110 million as a result of the loan transaction. The monies being sought represent the outstanding $78 million loan balance plus interest payments on the February 14, 2007 CIB borrowing issued to Stone Street.

Also named in the lawsuit are Stone Street Capital and First Capital Limited, St Kits, which was also incorporated by Monteil.

Monteil was questioned extensively by CIB’s attorney Michael Green, QC, on the nature of the transaction and the share purchase.

The lawsuit accuses Monteil and Trotman of a series of wrongful actions and also takes the entire CIB board of directors to task for mishandling the situation and breach of fiduciary duties on several counts, key among them the failure to ensure that the loan was fully secured.

In his defence, Monteil confirmed that Stone Street Capital did not repay the $78 million but transferred it to Duprey, who wanted the 337,269 shares the former CIB chairman had in CLF.

According to Monteil, the agreement was for Duprey to take over the loan debt and purchase the CLF shares which would have been transferred to First Capital Limited and later to Dalco – another company owned by Duprey.

He also said that the transfer of the $78 million to Stone Street Capital was done on the strength of an oral agreement and the CIB board accepted that the shares were being bought by the loan as security for the same loan.

Monteil said he did not inform Trotman of the deal he struck with Duprey since the chairman of the CLF conglomerate said he would do so himself.

“Mr Duprey told me Mr Trotman was advised,” Monteil said.

“Why sell $444 million in shares in return for a $78 million loan?” Green asked Monteil, who said that was the deal he and Duprey agreed to.

“I wanted out (of CLF). I didn’t want the debt,” he said, adding that he has given up “more” before.

“That’s what I did.”

“Give away $315 million of your assets?” Green pressed.

“I gave up the (loan) liability and the shares period. That’s what I did,” Monteil insisted.

Green continued, “There was something behind that… Was there another element of the deal with Mr Duprey?”

“I left. I demitted office. I was angry with them (CLF). The deal was he takes the liability (of the loan), he takes the shares,” Monteil repeated.

Monteil also admitted he sold the HMB shares to the National Insurance Board (NIB) as soon it was released to him by CLF.

Monteil is represented by attorney Jason Mootoo while Trotman is unrepresented.

Justice Avason Quinlan-Williams is presiding over the trial.

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