Privy Council to decide on 'fraudulent' sale of Clico Energy

AN appeal of a judge’s ruling which invalidated the sale of the insurance giant Clico's lucrative energy assets to Proman Holdings (Barbados) – three days after the Government bailed out the CL Financial conglomerate in early 2009 – and a later ruling of the Court of Appeal in 2023, is headed to the Privy Council.

On January 24, Justices of Appeal Alice Yorke-Soo Hon, Mira Dean-Armorer and Malcolm Holdip signed off on the agreed position between Proman Holdings (Barbados) Ltd and Process Energy (Trinidad) Ltd, formerly Clico Energy, and CL Financial for Proman to take its challenge to the London-based court.

In October 2021, Justice Devindra Rampersad ruled that the company was grossly undervalued, and voided the sale, ordering Proman Holdings to pay CLF the dividends it collected from the shares since 2009, plus interest.

In return, CLF was ordered to reimburse Proman Holdings the purchase price, plus interest.

On July 31, 2023, Justices of Appeal Alice Yorke-Soo Hon, Gregory Smith and Vasheist Kokaram upheld the 2021 ruling and also made a finding of fraud as it related to the transaction, which the earlier judge had declined to make.

Attorneys for CLF and Clico had insisted the sale transaction between Proman and CLF jefe Lawrence Duprey for the sale of Clico Energy’s shares could not be ratified.

They also asked the court to make a finding of fraud on Proman’s part, since it would have had a bearing on recovering efforts, if the CLF and Clico lawyers were successful at the appeal, especially since Proman had asserted it could not pay dividends owed to CLF and Clico.

The worth of the court’s judgment for CLF exceeds $2 billion, which represents the sale transaction and dividends on shares.

The Appeal Court also granted a stay, pending the appeal to the Privy Council.

At the time of Rampersad’s judgment in 2021, CLF and Clico claimed they would have received US$169 million in dividends had their stakes in PETL not been sold.

At the time of the deal, CLF controlled 34 per cent and Clico another 17 per cent, with the remaining shares in PETL, being held by Proman.

Attorney Jonathan Walker represented Proman on Wednesday. Senior Counsel Fyard Hosein appeared for CLF.