Mr. Cozier, BHL’s second directors’ circular (http://thebhlgroup.com/Corporate/BHL-Directors-Circular-No-2.pdf) makes for very interesting, but unpalatable, reading. Will any employee, officer and/or […]director of BHL be paid a performance bonus, a closing bonus and/or any other form of reward and/or compensation in connection with and in the event that SLU is successful in its bid to acquire BHL?
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That, along with all the other shit is starting to roll downhill and the politicians right along with it.
@IW
allow me to rewrite what you quoted
A poison pill is a strategy used to discourage hostile takeovers. With a poison pill, the attacking owner attempts to make stock less attractive to others. Point….it IS a poison pill.
We all understand why the Latin fund/SLU wanted it, the intent was to paralyze and detract from any takeover attempt other than their own. Money buys good lawyers?
The yet unexplained, beyond a multitude of various conspiracy type theories, is why the other shareholders representatives, read BHL Directors, would agree to these terms?
Imagine if you own Massy shares? You have just watched your Directors accept $4/share, when everybody else is being offered $6. That’s nearly bds$30 million dollars Massy did not get. Appreciate both Fields and King are “massy men”.
De bucket full ah holes.
@Northern, I know we are being painfully technically here but doesn’t a ‘poison pill’ refer to the company OWNER discouraging an outsider.
I know there is an N in both Latin and Owner, but dd not realize that Latin Cap was considered part of ownership when they got that ‘poison pill’ written in?
LOLLL. As I said just being technical really. We understand what went down behind the scenes.
As I said in another post, one can really be quite impressed with what the directors did as everything has played out perfectly…absolutely peachy for them.
Tremendous foresight really when one considers that being in the beer business they appreciated that the industry was already roiling with mergers back in 2010 and before.
What we are seeing now they absolutely predicted back then…not the exact AB/SABMiller deal of course but continued big mergers.
The way how they set up that loan agreement with an investment group was ideal for action from one of the big players and obviously they had to pave the way to ensure that there were no obstacles when the shares owner wanted to act.
The professor talked about classic poison pills; this was classic corporate maneuvering.
http://epaper.barbadostoday.bb/ – page 9
http://epaper.barbadostoday.bb/ – page 64
From Barbados Today in 2011 posted here on BU (https://barbadosunderground.wordpress.com/2011/01/30/proposed-de-listing-of-barbados-dairy-industries-limited/)
Banks shareholders threaten court action
2011-02-01
by Shawn Cumberbatch
Banks Holdings Limited could be facing legal action from disgruntled shareholders. A number of them, upset with last week’s controversial passage of a resolution giving foreign financiers Latin Capital Fund/SLU Beverages Limited a 20 per cent shareholding and the power to determine whether or not that company can issue new shares, have been getting legal advice and are threatening to take the matter to court. But BHL’s management has again defended the move to borrow $56 million from the El Salvador enterprise and convert $53 million into 13.2 million of its shares and the right to determine if and how many new shares can be issued. Managing Director/CEO Richard Cozier said everything had been down within the law. Some shareholders brought their concerns to Barbados TODAY and raised several questions about whether the transaction was fully within the rules of the Companies Act, among other issues. Among those willing to take BHL to court was chartered accountant Douglas Skeete, who said today: “We will need a lawyer to file the application, but whoever is willing to go forward I will give them the support.” “What happens from here now is critical. They, BHL, have gone ahead, but some of the shareholders have suggested if this is taken to litigation it would succeed. So I think there are a number of people who feel it should be tested in court to see whether it could go forward because there are number of concerns.” Skeete, referring to last week Monday’s special meeting of Banks shareholders where the resolution was passed, said “every single person in that room, except the members of the board, were not happy with the resolution and did not support it because it came as a fait accompli, they basically had taken the money, issued the shares and agreed to this party saying that no further shares should be issued, so that their 20 per cent would not be diluted”. “So quite a number of people got up and even those who didn’t get up expressed their opposition to the resolution,” the president of the Barbados Association of Corporate Shareholders stated. He and others were upset with several things, including the way the vote was taken, the dilution of shares, and the power Latin Capital Fund/SLU Beverages Limited would now have. He believed there were at least four or five reasons “which form the basis on which someone can go to court and challenge what happened at that meeting”. Another long-standing shareholder said it should be left to the law courts to determine whether what BHL had done was lawful under the Companies Act. “Shareholders should not approve something that might be illegal. They can approve it but it can be reversed in the law courts,” he said. Yet another said there were grounds for court action and that there was already a legal matter concerning questions about the “watering down of shares”. “Remember WIBISCO has taken Sagicor to court for issuing shares to National Insurance Board so this has similarly happened. Now you are diluting my shares 20 per cent. Suppose I had 50 per cent of these shares in Banks,” he asked? “By the action they took my shares could now be only 30 per cent holding although I still have the same number of shares. You could stop me from having a controlling interest by diluting my shares and you would have done it without my concurrence.” BHL Managing Director/CEO Richard Cozier told Barbados TODAY the company was confident it had acted lawfully. “I can tell you that the meeting was legal and what transpired at it was legal and the shares have been issued registered and listed and therefore as far as certainly the regulatory bodies are concerned in Barbados there is nothing illegal,” he said. “I cannot issue shares unless I have the consent or assent or I followed the procedure as laid down by the Stock Exchange and the Securities Commission. So the fact that the shares are issued, they are registered and they are listed indicates that we followed the requirements that they requested.” Cozier also maintained the finance option pursued was the best one in the circumstances. “We could not continue with the old brewery, we needed to build a new brewery and this option is the best option. We went and looked at debt from the local banks, we looked at debt from regional banks, we even looked at debt from the German banks who are supplying the equipment,” he said. “None of that worked; we could not make it work because we would always be in a position where we would get the money, but we would spend half of our profits in servicing it and then shareholders would be upset. So it was always a case of you are damned if you do and you are damned if you don’t, but the reality is that this option allowed us to free our books and even if it was debt, the debt was less than three per cent so it was very serviceable.” shawncumberbatch@barbadostoday.bb
Surely an accounting sleuth like Doug Sheete armed with the knowledge that is on the table at today, confirmed albeit five years later by Justin Robinson, posthumously?, could, with the support of say a Jeff Cumberbatch prove that these directors acted with ” malice aforethought against their shareholders” and fellows like Cozier planned this inverted poison pill, at the expense of their shareholders?..
Love all this shiite. The share premium is not enforceable? Ansa has an antidote.
Ansa will be the protector of Barbadian shareholders? An interesting angle.
And we have the FSC, plus earlier the FTC….how many udder commissions ya tink we can engage?
Piece please…..Cozier is a hired peon. He does what he is told. One thing seems assured, if Ansa wins, the lot of senior management better update their CV’s.
This situation is indescribable. Obviously, the allegiances of the Directors reside where they should, at the ‘best interest of the shareholders’.
Snort.
Sep 28, 2015: SLU bid of $4.00
Oct 16, 2015: BHL Directors’Circular-1 to SLU bid of $4.00
Oct 20, 2015: ANSA bid of $5.20
?Outstanding: BHL Directors’Circular to ANSA bid of $5.20
Oct 26, 2015: SLU bid of $5.60
Oct 28, 2015: BHL Directors’Circular-2 to SLU bid of $5.60
Oct 28, 2015: Notice from ANSA of increased bid of $6.00
Well Well & Consequences October 30, 2015 at 10:59 AM #
Tell them, The Bushman, I personally would not want shares in any small island companies, not even if they were being given away. That is not a stock market, it’s a Director’s Market.
…………………………………………………………………………………………………………………..
When the Parable of the Talents is rewritten, Barbados and Caribbean style, the chap with the one talent who hid it under the mattress, or has earned a measly 0.7% on a deposit account, will find great favour with his master , moreso than those other two who were given 5 and 2 talents respectively , and who invested those talents in CLICO and Trade Confirmers , et al, loosing everything.
Why would the regulators have to tell the BHL directors to take a matter regarding the rights attaching to shares to the shareholders when sections 28, 197, 202 and 203 of the companies act (https://www.investbarbados.org/docs/Companies%20Act%20-%20CAP%20308.pdf) appear to address that?
http://www.nationnews.com/nationnews/news/73986/bhl-sheds-light-usd1325-million-deal
But King told the SUNDAY SUN that the financing deal with Latin Capital Fund, provided a low interest rate, no upfront fees, and no principal repayment on notes until 2020. nationnews.com/nationnews/news
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
In short, it was either a trap set for simple-minded idiots, or a scheme to betray the interests of shareholders.
It it sounds too good to be true…. it probably is.
Given what has been described as a deal with a poison pill clause all members on that Board knew the deal.
@Bush Tea, it was the latter clearly. The directors at minimum could have considered issuing a different class of shares to Latin Group in order to balance and maintain the interest of the other shareholders.
This action was set up for this overall result – outside takeover -and it has come to pass.
What, if anything, will legal action produce is now the next step. Were these willful actions illegal and raising to the level of legal sanctions is the big question.
Apart from our palaver and the rather depressing commentary from public figures like Dr Robinson diddly-squat seems likely.
@ Dee Word
Think about it for a moment…. Suppose it was the former
.. i.e. – that we are dealing with a simple-minded ‘Board’ of idiots?
Perhaps they did not even bother to read the documents….
Perhaps the meeting lasted 8 minutes – six of which dealt with their bonus package…
Perhaps this issue was championed by a single individual on the Board as normal…
Do you know that this is EXACTLY how CLICO’s various Boards operated?
Do you know that LOTS of BIG NAME Bajans who were on these Boards, later claim COMPLETE IGNORANCE of board decisions and actions?
So perhaps it is time for Bajans to wake to ass up and start holding these ‘DIRECTORS’ liable for their actions.
SOME OF THOSE CLICO DIRECTORS NEED TO BE CHARGED….you can bet that they will then tell all about how the stealing was done…. if we REALLY wanted to know.
If that policyholders group had any balls, CIVIL SUITS would have been brought against ALL those Directors LONG AGO.
So Dee … what we MAY get from this, is the REALISATION by Bajan brass, that these so-called BOARDs – are nothing but a set of high-class lackies and Hos, who are given a stipend to raise their hands when called upon to do so….
LOL
Admittedly, no one expects that the Government will do anything about this obvious shiite…. indeed they ARE laws holding Directors liable for negligence, but our laws are mostly there to impress white lenders that we are a real country…. not to be enforced.
Perhaps this is why we do not have a DPP…..
Bush Tea November 1, 2015 at 8:19 AM
Give that man a medal!
The state of play of this farce is in flux apart from the scrappy management and directors nobody knows where the BHL takeover stands. ANSA on the airwaves with offers to shareholders valid until December. What does that mean wasn’t the dotted line to be signed last month. Now the poison talk arises. At the end of the day the laying of criminal charges would not be misplaced.
The profitable enterprises of the country are sold for spit to foreigners (Ambev)who know a steal when they see one or cynical Trinis flush with oil money . The funeral of the gas pipeline from Port of Spain to Bridgetown is a distant memory.
Its known black buyers and partners are not in the plans of big business operators. Having said that where are the working class(blacks) in the battle for the heart of our economy? The cash rich credit unions, the new wealth black businessmen, honest lawyers, doctors and professionals. We hear whispers of their mighty bank accounts. Green verb Parris, Forde , Cheltenham and their counterparts feature in rumors of financial clout. Why aren’t they in the mix to control businesses that prospered by the blood, sweat, tears and money of black consumers.
@growing pains aka waiting
Why should Black people you mention want to battle for big business if largess is accessible?
I find it interesting that a matter is material enough to seek the guidance of the regulator but not significant enough to disclose to the shareholders whether or not the regulator indicates a requirement to disclose.
It appears that tHe annual report in the subsequent year provides a detailed disclosure of aspects of the debt for equity swap but not others.
More questions than answers to me.
@Dr. Robinson
Please lay it out in layman terms, Are you critiquing the regulator, BHL or both!
On 1 November 2015 at 14:56, Barbados Underground wrote:
>
And David, if I may respectfully add to your queries to Dr. Robinson.
Why are these concerns being only raised now five years later by the leading expert in Barbados on corporate finance/share ownership etc?
The BHL directors seem to be in a rather difficult position. If ANSA succeeds and challenges the unusual “rights” given to SLU, the outcome will likely be unfavourable for the directors. But, how high will SLU go with its offer price to secure the remaining shares and avoid the actions that will likely follow if ANSA succeeds? And, how high will ANSA push the offer price to secure success?
@Atrue, how are “the directors … in a rather difficult position”.
Cozier is close to retirement age if he so chooses. He will get his payout, his pension and can cash in his 48K+ in shares.
All the other non-executive directors already have their bread well buttered. And most of them have some shares they can sell.
EXACTLY how is any outcome ‘UNFAVORABLE” to any of them????
You have been ‘on point’ throughout this debate so I know you get the point.
The economic substance of the right to sell 13.25ml shares at $10.00 seems to me to be the same as granting a “put option” on these shares to SLU. I am no lawyer, but If I were a shareholder I would explore the legal issues around the creation of what looks like a derivative security based on the common stock of a publicly traded company.
I am of the view that whatever the regulator requires BHL directors have a duty to disclose material contracts to shareholders.
The issues surrounding the debt for equity swap in 2010 were very well ventilated and discussed in the media. A lot of attention was not paid. The poison now is only now coming to public attention.
Based on what I have seen in the 2011 annual report the directors appear to have been very selective with what aspects of the debt to equity swap were disclosed.
Poison pill that should be
@Atrue Freeman
Who cares about the BOD at this stage? This issue has surpassed their parochial non transparent position.
What are the shareholdings of the BHL directors again?
On 1 November 2015 at 15:05, Barbados Underground wrote:
>
@Dr Robinson, based on my reading of the news reports from that 2010 shareholder meeting and the notes in the BHL 2011 reports, and current details from BHL I cannot identify any key smoking gun issue that was not evident from 2010.
Maybe the Board was selective with comprehensive financial details but the fundamental financials were enough to identify that Latin Capital could force a take-over of the company. That was pellucid.
Your concern of a “poison pill’ we can debate but essentially the context of your assertion is valid.
The BHL Board made it difficult for anyone EXCEPT Latin to buy more shares of the company. I choose to coin the term an ‘inverse poison pill’ as the Board was in fact facilitating an ‘outsider’ rather than simply solidifying their control.
So, as a non-expert looking on I am still completely confused how this passed under the radar at the expert level until now?
Because there was absolutely no doubt about that from the 2010 news reports or the financial reports in 2011.
Coupled with what had happened in the country with the BS&T sell off and the BL&P sell off surely smart people saw this as another imminent sell off ALSO.
Anyhow, enough of that.
de Ingrunt Word November 1, 2015 at 11:16 AM #
I am referring to any possible legal action that ANSA, if successful in its bid to control BHL, may be able to take regarding the rights given to SLU and the associated scrutiny of the directors’ actions. If SLU succeeds, everything is well and good.
David November 1, 2015 at 11:36 AM #
Small BSE investors should care because the better outcome for such investors is for ANSA to succeed and legally challenge the actions of the directors in relation to the rights given to SLU. The small investors are unlikely to fight this battle.
I don’t know what the attention is now, BHL was effectively sold in 2010 and right under the nose of shareholders. Wanna trusted Sir Allen, look what he did to wanna. You feel he got a concrete vault under he house for fun?
Frankly, Atrue what would be the gain for ANSA if they win! For all practical purposes what damages could be assessed? Unless there are Clintonesque emails showing otherwise it would be impossible to pin criminal, insider charges on the Board.
For all intents and purposes the BHL Board made a business decision to finance operations at, according to them, the lowest available costs.
The ANSA team would take their spoils and move on.
This is Barbados. We have never had a white collar corporate finance case of this type before the courts and one will definitely not be starting on this matter.
Unless you know something not in the public domain yours is but a wishful thought.
I only know what is in the public domain and that seems to suggest that every aspect of this deal should be scrutinized by the shareholders (unlikely to happen) and the FSC or other relevant regulatory body.
Justin Robinson November 1, 2015 at 10:56 AM #
“It appears that tHe annual report in the subsequent year provides a detailed disclosure of aspects of the debt for equity swap but not others.
More questions than answers to me.”
Justin,
When it comes to annual reports, you should be the last to talk. Don’t you have any shame?
You recently came on BU and provided a few pieces of information about the NIS. Your answer provided “more questions than answers to me”.
What is the state of the financial reports at the NIS, of which you are the Chairman? As an NIS contributor, I informed you that I heard that millions of Barbadians’ NIS contributions are “flowing like a burst pipe” to fix so-called IT problems.
At the NIS, you and others seem to have handpicked IT specialists from a company proverbially called Hydra. As soon as one IT problem is fixed at the NIS, two more appear. I asked you to tell the public of Barbados how much of our contributions have been spent on IT. No reply.
NIS is a “public” agency, and therefore I have a right to defend my contributions and ask you questions. You have not responded to one of them.
You are the Chairman of the NIS Board, and I am an NIS shareholder. Don’t you think you ought to answer me?
Instead, you choose to come here on BU and try to impress us all that you know how to identify and exploit companies that are undervalued on the BSE. At the individual level, if you are that good, and BHL is undervalued, how come you are wasting our ears by forcing us to listen to such words as “but If I were a shareholder ….”?
At the national level, If you are so good, why don’t you identify the number of undervalued companies that you have successfully advised the Minister of Finance to invest our NIS contributions in? Why don’t you name the ones that NIS have become a major player in, on behalf of Barbadians, to prevent a future hostile takeover? Would you count Four Seasons as one of these companies? Would you count the investment in risky government paper and government buildings as investment activities that ought to come from such a brilliant and knowledgeable investment guru as you?
At this point, I would sum up your tenure as the Chairman of NIS in two words: useless and ineffective.
At the NIS, “the poison now is only now coming to public attention.”
Please concentrate on cleaning up the mess at the NIS so that you can justify cashing the monthly cheque you receive from Barbadian taxpayers.
@Walter, I am not often moved to curse here on BU, but JHC thank you- with your intellectual gravitas for pointing out the hypocrisy of many of our local experts.
I do not know Dr. Robinson as I do not know Jeff but as models for their employer I would run far if the economic doc was their standard of righteous speak; but then return on account of Mr Cumberbatch.
I recap your remarks: ” At the national level, … why don’t you identify the number of undervalued companies that you have successfully advised the Minister of Finance to invest our NIS contributions in?..”
That is one JHC indignant moment !
” Why don’t you name the ones that NIS have become a major player in, on behalf of Barbadians, to prevent a future hostile takeover? ”
JHC moment, TWO.
i asked myself why is a gov’t appointed chairman official coming on this site with these room-temperature comments if he has NO intention to respond to simple questions like yours and a few others?
Could he be part of a disinformation strategy? I said to myself, absolutely not. Why would be stain his professional profile so unnecessarily!! Makes no sense.
But then it absolutely also makes no sense to put out professionally watered-down remarks and not then shirk away and not respond to queries as fully as possible.
Our country is really in a conniption, fah real!!
@ Walter Blackman
I said on BU that Dr. Robinson is NO GOOD as to NIS or in his private life in other words he is just one of the makeup men with no integrity
@Watchman
Please stay with the issue.
DIW
Watch he now, Justin now in a speed wobble.
Leh we see whu he response is bout LatCapital Florida or dis Hydra…
@ Walter
Man you aint go no patience…?
De man was going to come around to the NIS…
…now it will be all bat and pad…. 🙁
Justin Robinson November 1, 2015 at 11:16 AM # “… but If I were a shareholder I would explore the legal issues around the creation of what looks like a derivative security…”
In my opinion, substance over form is the key factor. In the end, SLU was given a right to redeem its shares under certain conditions for 2.5 times the purchase price, which is a fundamental change. If not, BHL could also enter into a contract where a new “would-be-equity” investor could pay BHL the equivalent of what would be the purchase price for new BHL shares in exchange for a contractual cash flow from BHL that is equivalent to the dividends and proceeds of disposal at a chosen time of BHL shares, while not actually issuing any new BHL shares to such would-be-equity investor.
Freeman, it appears to me that in addition to shares,SLU also received a put option on the shares. I would raise some questions around the creation of that put option,
de Ingrunt Word November 1, 2015 at 11:37 AM #
“So, as a non-expert looking on I am still completely confused how this passed under the radar at the expert level until now?
Because there was absolutely no doubt about that from the 2010 news reports or the financial reports in 2011.”
de Ingrunt Word,
From an early age, an old Barbadian adage took root in my mind: “Every fool has his own sense.”
As I grew older, and as my interaction with human beings widened, I instinctively adopted a philosophy that was based upon a critical assumption I made: “Every person I meet is highly intelligent.”
These are two simple mental ideas when standing individually on their own, but when you fuse them together, they provide a practical powerful insight into human behavior.
Let me explain.
The issue you are raising here is the identification of THE CRITICAL POINT OF DECISION MAKING.
Therefore, start off by assuming that the actors involved in my scenarios are highly intelligent, and that every fool has his own sense.
Suppose, that the “brains” at BHL conceptualized this “scheme” 6 or 7 years ago. They researched the law, bounced the idea off the regulators and received a favourable response from all of them. Suppose that they knew that the only thing that could stop this “scheme” from being successful is if the shareholders’ eyes are opened.
The critical point of decision making, therefore, is the point at which the shareholders hear about this “scheme” for the first time. Up to this point, the “brains” would have operated in an extremely quiet, thoughtful, deliberate, and purposeful manner. However, once they got past this critical point, they would not have to answer to anybody. All they would have to do is to let you know the regulators approved the scheme. If you have a problem, deal with the regulators.
At this critical point of decision making, the shareholders needed to be educated, and needed to be guided as to why it was in their best interest to say “No”. This was the time Sir Hillary Beckles, Dr. Justin Robinson, and Sir Frank Alleyne, agitators all, ought to have stood up and give the shareholders the benefits of their status, education, knowledge, expertise, and prestige. Instead, we heard that Douglas Skeete stood up, but his effort was ineffective. Maybe he did not have enough status.
Now that the critical point of decision making has passed, and the “brains” are about to “cash in” on what they might truly perceive to be a well-executed “scheme”, Sir Frank Alleyne and Dr. Justin Robinson, now find it suitable, convenient, and timely to jump on to the national stage spouting frothy intellectual and moralistic nonsense. For whose benefit?
Do you honestly think that is coincidence?
At least they could have done like Sir Hillary Beckles and keep their “damned” mouths shut.
Justin Robinson November 1, 2015 at 2:07 PM #
The right to sell BHL shares to BHL is equivalent to a right to redeem such shares, a fundamental change under the Companies Act, in my opinion.
@Dr. Robinson
Do you intend to respond to Walter at all? If you don’t it will create a vacuum, you know there is abhorrence to a vacuum when speculation is rife.
Gentlemen
“.. for always there will be greater and lesser persons than yourself…”
Max Ehrmann, Desiderata, Copyright 1952.
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