Monday, May 3, 2010

Election Primer A - Z: 'H' is for Home Mortgage Bank


What do you call it when the sitting Chairman of a state-owned company takes the decision to sell $110M worth of shares in that company to himself? And what do you call it when that individual is also the Treasurer of the ruling party?

And even though it has been reported that neither the Government nor the Central Bank has read much wrong in what Mr Monteil has done, to any impartial bystander this is a clear case of the immoral, self-serving actions that has characterized the present administration.

To recap, while he was the Chairman of HM, the Financial Controller of CL Financial and Onwer of Stonestreet Holdings, he convinced the other board members of the HMB to allow him via Stonestreet to purchase CL's 43.8% shareholding of the HMB for the sum of $110M. Though deemed a legal transfer, Mr Monteil was ultimately made to reverse the transaction.

A partial chronology of the unsavory issue is available here:

As a follow up, it was reported a month ago that Mr Monteil was being sued by CLICO Investment Bank (an organization he was also connected to as Financial Director) for several breaches of company law and common-law and fiduciary duties, including:

…breach of his duty under the Companies Act to, as CIB director and chairman, “act honestly and in good faith with a view to the best interest of the company” and “to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances”;

…breach of fiduciary duties to avoid conflicts of interest, to act honestly and in good faith and in the CIB’s best interests and to have loyalty to the company;

…breach of a duty not to self-deal.

In brief, he 'borrowed' $78M from CIB to finance the failed deal and this apparently has not been yet repaid.

Should you be unconvinced by the above, there is also the case of the state purchase of land that belonged to Mr Monteil for TT$4M:

Today, Mr Monteil is the former Financial Controller of CL Financial and former Treasurer of the People's National Movement. But he remains deeply rooted to the party and to its leader, as he is the man who is also responsible for first introducing the PM to the most important Canadian to ever visit our shores: Mr Calder Hart.

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