A group of CL Financial (CLF) shareholders have been blanked from going to the Judicial Committee of the Privy Council in London.
In an oral ruling on Monday, the Court of Appeal comprising Justices Nolan Bereaux, Gregory Smith, and Andre Des Vignes refused the shareholders leave to go to the Privy Council in London.
Bereaux said the appeal did not raise any arguable issues as the appointment of the provisional liquidators became academic after High Court Judge Kevin Ramcharan approved Government’s bid to wind up the company in September.
Despite the refusal of the leave, the shareholders can now go directly to the Privy Council in seeking to challenge the appointment of a provisional liquidator.
Bereaux also rejected the policyholders’ claim that the appeal was a matter of public importance and pointed out that it was in the public’s interest for the company to be liquidated in order to repay Government for its bail-out of CLF’s subsidiaries in 2009.
In denying the shareholders leave, the Appeal Court ordered them to pay the State’s legal costs for defending the application.
In making the application, attorney Navindra Ramnanan, who is representing former CLF chairman Lawrence Duprey, said his client needed to challenge the initial appointment as the shareholders were not allowed to make submissions before Ramcharan made his decision.
Ramnanan said his client was unable to raise unique issues with the winding up, including the fact that the application was made by Government, which had effective control of the company since 2009 through a memorandum of understanding and a series of shareholder agreements.
He also admitted that the shareholders had filed an appeal against Ramcharan’s decision in the Court of Appeal. That case is yet to come up for hearing.
Government, through the Ministry of Finance, made an application and a corresponding winding up petition for the company in July after the shareholders signaled their intention to change the composition of the board which had been government-controlled since the Clico’s bailout.
As a condition of the bailout, CLF had agreed to honour its subsidiaries’ debt and allow Government to select four members, including the chairman, to its seven-member board. The agreement, which was renewed 17 times after being first signed, expired in August last year and the shareholders refused to agree to a new deal.
The shareholders’ refusal was reportedly based on the failure of the Ministry of Finance to consider a proposal from independent auditing firm PwC, which suggested that they are given control of the company and allowed to renegotiate its repayment arrangement for the $15 billion still owed to Government.
They are claiming the company’s debt to the Government is inflated and the company is not insolvent, as is required for winding up proceedings.
Ramcharan initially refused Government permission to appoint provisional liquidators from international accounting firm Grant Thornton. However, his decision over overturned by the Appeal Court.
In an initial report, provisional liquidator Marcus Wide said the company only had $90 million in its management accounts. In September, Ramcharan approved the winding up petition giving the liquidators permission to sell the company’s assets to clear its debt.