PORT-OF-SPAIN – Top executives in the disgraced CL Financial conglomerate made off with tens of millions of dollars in consultancy fees and commissions, for which no taxes were paid, while raking in fat annual pay deals with generous perks that included a luxury car, club membership and a corporate credit card, among other things.
The group’s former top three corporate bosses Lawrence Duprey, Andre Monteil and Gita Sakal, and Duprey’s personal chauffeur Rupert Superville, were paid a whopping TT$80.3 million in consultancy fees and commissions, for which no taxes were paid to the Board of Inland Revenue (BIR), according to a pay-as-you-earn (PAYE) BIR tax assessment for income years 2007 to 2009.
The CL Financial group was placed under state supervision on January 30, 2009, following a run on its investment bank and insurance companies.
Sources familiar with the situation told the Sunday Express the BIR had made a PAYE tax liability claim of TT$41 736 093.72 on CL Financial for unpaid taxes related to consultancy fees and commissions paid out to the former top three corporate bosses and to Duprey’s personal driver Superville, who received a “consultancy fee” of TT$3 990 000 in 2007 and TT$3 455 000 in 2008.
The BIR’s review has been challenged by CL Financial’s state-appointed caretaker management on the ground that the former executives should be held personally accountable for contractual benefits paid to them.
CL Financial was contractually bound and did pay PAYE deductions to the BIR on the salaried income for their top executives, according to people with knowledge of the situation.
The contentious TT$41.7 million tax liability claim related to income paid separately as “consultancy fees” and or “commissions” and miscellaneous expenses including credit card, foreign travel and payments from the group’s US dollar account.
CL Financial’s top three executives received TT$39.7 million from the company’s US dollar account.
In batting the tax liability over to the named executives and the chauffeur, CL Financial contended that a consultant was not an employee and consulting fees were outside the Income Tax Act definition of “emoluments”.
One tax expert agreed, going further to suggest that the consulting deals the former executives had going with CL Financial was merely a ruse to fatten their already bloated compensation packages.
Sudeesh Shivarattan, a former senior state counsel at the BIR, lecturer in tax law at the Hugh Wooding Law School and editor of Dominion Tax Cases, Canada, claimed the top executives were personally liable.
“Tax law, like finance, meticulously looks at the substance of the transaction rather than the form. An individual who receives income, within the meaning of the Tax Act, is ultimately responsible for the payment of the tax.”
He said that from the evidence, the consulting deals were done for the personal benefit of the group’s top executives. (Trinidad Express)
