The Caswell Franklyn Column – National Insurance Staff not Sufficiently Trained to Administer Scheme

Ian Carrington, Director of the NIS

Following my last column about the National Insurance Scheme (NIS), several people, who were having problems with that government department, sought my assistance. Today, I would like to share the experience of two persons since the troubles, they were forced to endure to get unemployment benefits, show up fundamental problems with the processes at NIS.

They were informed verbally that they did not qualify for the benefit because the NIS records show that they were not insured under the scheme for a year. Both of them had been working for the same employer from 2013 to July 2017, approximately four years. NIS contributions were deducted from their wages but were not being paid in. As a matter of fact, the employer registered the business some time in 2016 and only started to pay in the contributions to NIS at that time. All along the workers claim that they were not aware that their contributions were not being remitted to NIS.

Every employee, who earns a minimum of $21 per week or $91 per month, is required to pay NIS contributions. Private sector regular employees are supposed to pay 10.1% of their insurable earnings, and the employer is required to pay an additional 11.25% on the worker’s behalf. Section 15 of the National Insurance and Social Security Act mandates the employer to make the deduction and pay the money over to the NIS Fund. The employee has no control over that process and in most cases might not even be aware that the employer has not complied with the law.

My greatest concern is that these workers were told that they were not entitled to receive unemployment benefits since they were not insured for 52 weeks. That information might prove to be correct but it was improper to make that determination and orally communicate the decision to the claimant. Whenever a person makes a claim and it is disallowed, the Director of NIS is required, by Regulation 8 of the National Insurance and Social Security (Determination of Claims and Questions) Regulations 1967, to inform the claimant, in writing, of the decision and also inform him of the right to appeal. From my experience, appeal forms are not readily available and it seems as though officers take offence when their decisions are challenged.

However, if the appropriate procedure were implemented: the claimants would have been able to produce their payslips to show that they were employed for the required period; and that NIS contributions were deducted from their wages, even though that is not absolutely necessary to qualify for the benefit. If the employer failed to pay in the contributions, the claimant only needs to show that he was employed and that he did not make any arrangements with the employer to avoid paying the contributions in order to qualify and receive the benefits.

It is then up the the Director to go after the delinquent employer to recover the contributions. When I worked there in the 1980s that is how we operated, and we did so in compliance with Paragraph 6.(1) of the National Insurance and Social Security (Contributions) Regulations, 1967. It states:

Where a contribution payable by an employer in respect or on behalf of an employed person is paid after the due date or is not paid, and the delay or failure in making payment thereof is shown to the satisfaction of the Board not to have been with the consent or connivance of, or attributable to any negligence on the part of the employed person, the contribution shall, for the purpose of any right to benefit, be treated as paid on the due date.

Arising from this case, I am told by the remaining employees that the employer is making deductions from their wages to recover NIS contributions that were supposedly not deducted when due. Workers should be aware that it is contrary to Regulation 18.(2A) of the Collection of Contributions Regulations to do so. It states:

Any employer who fails to deduct an amount that is required to be deducted from a payment of remuneration to an employee, may not deduct that amount from any subsequent payments of remuneration made to the employee for the pay period for which he had failed to deduct.

Too many workers are being disadvantaged by officers of the NIS department who are unfamiliar with the regulations. Maybe, it would be better if NIS administration require its staff to qualify in its regulations rather that in academic degrees that have no relevance to its operations.

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137 Comments on “The Caswell Franklyn Column – National Insurance Staff not Sufficiently Trained to Administer Scheme”

  1. Caswell Franklyn September 24, 2017 at 3:09 PM #


    I hope you know that Hal isn’t going to buy anything else from you.

    Sent from my iPad


  2. Hal Austin September 24, 2017 at 3:11 PM #

    The risible Bush Tea again turning everything in to a cheap joke to hide his ignorance. I suggest Bush Tea should follow his pal and let off his steam to make up for his shortcomings. BushTea, act your age. Had you been at school in my time I would have slapped your head something rotten.


  3. Bush Tea September 24, 2017 at 3:38 PM #

    Actually Hal, if you were a normal logical person, you would see that the ‘risible Bushie’ produced the cheap joke in order to EXPOSE YOUR ignorance….not to hide his….
    Bushie operates a whacker boss – ignorance is allowed….
    Think the bushman is a financial journalist or some big-up shiite?

    Just wanted everyone to know that this London – based financial journalist, and international economics guru.. just happens to be a piss poor pathetic patsy…. and not even smart enough to keep it in the family (not the BU family…) … or to use a pseudonym.

    If you had slapped Bushie’s head you would now be dead like the other chap who attempted to… and we would be spared the levity of your London-based ‘expertise’….
    Thank God that you did not….


  4. Hal Austin September 24, 2017 at 3:47 PM #

    Bushie Tea,
    I would like to go back in time and watch you as you enter the school gate. My hands at e already perspiring from the slaps. I see you are now manufacturing a straw man: I am no guru, no economic guru; I can just about write my name and count to ten. But I can slap silly little boys hard.
    But keep proving that you wasted your youth. You at e the Joe Tudor of the blog.


  5. Alien September 24, 2017 at 4:12 PM #

    Less than 7% local equities and less than 15% total equities seem low for the NIS investment portfolio. Professor Robinson should consider taking on more risk, provided that he and the NIS would be prepared to defend the investments in the boardrooms and the market. When the NIS Chairman or Director, backed by $5 billion and the state, turns up for a directors’ meeting, even the company’s chairman should be uncomfortable.


  6. Alien September 24, 2017 at 4:15 PM #

    … unlike directors that get a pick because of relationships and must follow the chairman’s lead.


  7. Hal Austin September 24, 2017 at 4:33 PM #

    You are right. Before investing the NIS investment board should be having meetings with the target companies, talking through all their plans, the market, both regionally and globally, and the immediate future and looking at the quality of management.
    I will give an example: I worked for a firm that was on the market; during the period it was under consideration, senior management got locked in with new contracts and the would-be owners came round and had meetings with all the key personnel. Afterall, they were going to invest in these people. You do not want to invest in a company then all the key people resign.
    I also think the NIS should do its own research, rather than depend on buying in research. It is a pension fund, so high-risk investments may be a gamble too far. You only get high returns if you gamble.
    I have proposed a reasonably cautious allocation as: 40 per cent fixed income (to meet liabilities), 30 per cent equities (to grow the fund), five per cent hedge funds (high risk, high returns), five per cent cash (keeps you in the market), 15 per cent commercial property (goo regular income from rental), and five per cent an incubation fund or in ETFs (invest in the future).
    That can be tweaked according to performance and the business cycle. It also excludes government using the fund as a piggy bank.
    But, again, I would prefer to see all this taking place within a Sovereign Wealth Fund, with the NIS having a substantial equity holding, with a block on active fund management..


  8. R. Stanherd September 24, 2017 at 8:32 PM #

    A degree means the holder has the capacity & discipline to learn. Unlike Franklyn’s tenure, NIS has a large staff. The onus is therefore on the organization to have orientation sessions for its staff. This would give them the opportunity to be aware & where necessary learn the law relevant to their jobs. Appears NIS have yet to retool & restructure its operations


  9. Well Well & Consequences Observing Blogger. September 25, 2017 at 4:45 AM #

    Caswell…….,to make your thankless job even shorter, make sure all your clients, union members and nonmembers and ALL the vulnerable people in Barbados who have had and are having their basic human rights violated as a matter of course by two stupid black governments, have a list of their rights and the knowledge that they can make some noise.

    When bloggers can blatantly disregard the rights of the black majority on a public forum..

    ……..and all you ever hear is government repeatedly violating the rights of the black population….

    ……despite most of the government ministers and opposition being lawyers……

    ……and despite they all knowing that Barbados IS a signatory to all these treaties against human rights abuses and violations…….

    …..AND that the laws against such violations do exist….one gets tired and when one is like me, tend to do something about it, besides talk.

    Many Bajans are not aware that they have universal human rights that are inalienable and irreversible,  maybe it’s time for the Black majority population in Barbados to research those rights under universal and international laws and if they realize their rights have been and still are being violated by the two uncaring black governments when they allowed a minority population of people to violate the majority’s rights for the last 50 years for financial gain, the people should know they also have a right do something about it, to expose any violations of their international human rights and seek redress.

    Appendix 5: 
    The Universal Declaration of Human Rights (abbreviated) 

    Article 1 Right to Equality
    Article 2 Freedom from Discrimination
    Article 3 Right to Life, Liberty, Personal Security
    Article 4 Freedom from Slavery
    Article 5 Freedom from Torture and Degrading Treatment
    Article 6 Right to Recognition as a Person before the Law
    Article 7 Right to Equality before the Law
    Article 8 Right to Remedy by Competent Tribunal
    Article 9 Freedom from Arbitrary Arrest and Exile
    Article 10 Right to Fair Public Hearing
    Article 11 Right to be Considered Innocent until Proven Guilty
    Article 12 Freedom from Interference with Privacy, Family, Home and Correspondence
    Article 13 Right to Free Movement in and out of the Country
    Article 14 Right to Asylum in other Countries from Persecution
    Article 15 Right to a Nationality and the Freedom to Change It
    Article 16 Right to Marriage and Family
    Article 17 Right to Own Property
    Article 18 Freedom of Belief and Religion
    Article 19 Freedom of Opinion and Information
    Article 20 Right of Peaceful Assembly and Association
    Article 21 Right to Participate in Government and in Free Elections
    Article 22 Right to Social Security
    Article 23 Right to Desirable Work and to Join Trade Unions
    Article 24 Right to Rest and Leisure
    Article 25 Right to Adequate Living Standard
    Article 26 Right to Education
    Article 27 Right to Participate in the Cultural Life of Community
    Article 28 Right to a Social Order that Articulates this Document
    Article 29 Community Duties Essential to Free and Full Development
    Article 30 Freedom from State or Personal Interference in the above Rights


  10. Bernard Codrington. September 25, 2017 at 12:41 PM #

    @ Hal Austin at 4 : 33 PM

    Your Investment guidelines are a good starting point. But in view of the rather shallow stock market in Barbados, where are you going to find these equities?

    You also talk about corporations sharing their strategic plans etc. with your investment manager. Does this not amount to insider trading ? This appears to me to be making the small market “asymmetrical”. Is that not so?


  11. Hal Austin September 25, 2017 at 1:16 PM #

    The market is the global market. Investing in a single market is bad strategy, as you know. Investors talking to the executives of the firms they are thinking of investing in is not insider trading, but good due diligence. It is routine, which is why most leading firms (the S&P 500) have investor relations officers.
    All markets are asymmetrical, yes, you are spot on.


  12. David September 25, 2017 at 1:23 PM #


    You are aware that successive governments have taken a position to not prop up foreign economies by investing overseas. We can disagree but that has been their position. If you check the investment portfolio mix it under both political parties it has always hover around 70%.


  13. millertheanunnaki September 25, 2017 at 1:33 PM #

    @ Hal Austin September 24, 2017 at 4:33 PM
    “I have proposed a reasonably cautious allocation as: 40 per cent fixed income (to meet liabilities), 30 per cent equities (to grow the fund), five per cent hedge funds (high risk, high returns), five per cent cash (keeps you in the market), 15 per cent commercial property (goo regular income from rental), and five per cent an incubation fund or in ETFs (invest in the future).
    That can be tweaked according to performance and the business cycle. It also excludes government using the fund as a piggy bank.
    But, again, I would prefer to see all this taking place within a Sovereign Wealth Fund, with the NIS having a substantial equity holding, with a block on active fund management..”

    Man Hal, why don’t you “Up De Ting” and put your ‘know-it-all mouth’ to good nationally loyal use?

    Why not return to Barbados and show the locals how things are done in the big investment world in the City of London? Or are you just another limey blabbermouth of the armchair critic-in-the-Diaspora variety?

    Do you really think that the NIS which disposed of its investments in the country’s lone power generation and distribution guaranteed profitable business (BL&P) given the paucity of alternative investment opportunities would waste its Board’s time by listening to or even entertaining any proposals made by you; even if done pro bono and with altruistically good intentions?


  14. Simple Simon September 25, 2017 at 2:22 PM #

    @Tron September 24, 2017 at 2:40 AM “we need to reduce pensions and other payments by at least 50%. Everybody has the right to emigrate. ”

    The minimum NIS pension is already very small. if it is cut by 50% people will die.

    Your statement “everyone has the right to emigrate” makes no sense. I don’t know of any country which is seeking elderly, disabled, or sick immigrants. Do you?


  15. Guest September 25, 2017 at 2:30 PM #

    @David September 24, 2017 at 10:04 AM #

    What IF there is evidence to point to a BSE consultant who worked on the C&W amalgamation?

    David, you verified this or is it still IF


  16. Bernard Codrington. September 25, 2017 at 5:29 PM #

    @ David at 1: 23 PM

    Not my experience at all. The BOD of NIS does have enough lassitude to invest abroad in an attempt to achieve geographical diversification. Indeed investment in debentures of fellow CARICOM countries was encouraged at one stage. As I alluded to in another BU blog the growth in GOB bonds could have been a deliberate policy to go after a higher rate of return. I have no inside information.


  17. David September 25, 2017 at 5:37 PM #


    You read the letter posted by chairman Robinson which addressed the scarcity of forex to invest overseas as recommended in the actuarial reports?

    You recalled when Jepter Ince was Chairman the policy?


  18. Bernard Codrington. September 25, 2017 at 5:49 PM #

    @ David @ 5 :37 PM

    You said ” successive governments” not successive chairmen. I know for a fact that there was a substantial foreign investment portfolio, prior to the referenced period.


  19. NorthernObserver September 25, 2017 at 6:58 PM #

    There is plenty of basic evidence to challenge the C&W “fairness” offer as done by D&T. However, somebody has to file an oppression minority shareholder suit, in order to get access to the documents necessary to render other “opinons”.

    Sagicor is the king-pin of the minority owner group, and I believe Sir Hilary Beckles is their appointed representative on the Board. We all know, going back to the Barbados Mutual, he is well versed in arguing such minority ownership cases. Yet here, there has been silence? Why is nobody challenging that $2.86 offer?


  20. David September 25, 2017 at 7:15 PM #

    BU’s earlier comment points to why, Sagicor is a big donor.


  21. Alien September 25, 2017 at 7:22 PM #

    But who advised C&W to pursue such an oppressive approach? Was it Sir Henry Forde who is listed as Legal Advisor, PwC which is listed as Corporate Advisor or another consultant?


  22. Alien September 25, 2017 at 8:00 PM #

    I can confirm that the directors of the International Securities Market, which is operated by the Barbados Stock Exchange, are the below persons, but the Barbados Stock Exchange may have different directors. By the way, I thought that Randall Belgrave was a sitting judge.

    Randall Belgrave (Law Chambers)
    Roger Cave (Fortress)
    Rule Weekes (Cidel)
    Richard Cozier (Formerly Banks Holdings)
    Marlon Yarde (BSE)
    Sir Trevor Carmichael (Chancery Chambers)
    Dr. Patricia Downes-Grant (Sagicor)
    Paul Maxwell (Capita)
    Cleviston Haynes (Central Bank)


  23. David September 25, 2017 at 8:03 PM #


    Dont get confused the judge is Randall Worrell.


  24. Alien September 25, 2017 at 8:06 PM #

    Okay, that resolves my confusion


  25. Alien September 25, 2017 at 8:21 PM #

    Okay, was not aware of this gentleman –


  26. Alien September 25, 2017 at 8:57 PM #

    A little more insight into the directors of the BSE

    The affairs on the BSE are administered by a Board of Directors through a General Manager and consists of four designated members, four elected and one independent.

    The four designated members represent the Central Bank of Barbados, the Bar Association, the Barbados Chamber of Commerce and Industry, and the Institute of Bankers. The elected members are chosen from the Membership of the Stock Exchange.


  27. Alien September 25, 2017 at 9:37 PM #

    This may be as close to the BSE directors as you can get through the internet


    Barbados Stock Exchange Inc.

    11 member(s) linked
    Member profile details
    Membership level Gold Organizational Membership
    Personal Information
    Title Mr.
    First name Marlon
    Last name Yarde
    Business Information
    Organization Barbados Stock Exchange Inc.
    Group participation
    Board – Audit and Risk Committee
    Board – Nominations & Governance
    CCG Graduation Invitees
    Linked members (11)

    Name Email Phone
    Clennell Goodman, Barbados Stock Exchange Inc.
    Cleviston Haynes, Barbados Stock Exchange Inc.
    Grenville Phillips, Barbados Stock Exchange Inc.
    Lorna Leacock, Barbados Stock Exchange Inc.
    Patricia Downes-Grant, Barbados Stock Exchange Inc.
    Paul Maxwell, Barbados Stock Exchange Inc.
    Randall Belgrave, Barbados Stock Exchange Inc.
    Richard Cozier, Barbados Stock Exchange Inc.
    Roger Cave, Barbados Stock Exchange Inc.
    Ryle Weekes, Barbados Stock Exchange Inc.
    Vernon Williams, Barbados Stock Exchange Inc.


  28. Tron September 25, 2017 at 9:51 PM #

    @Simple Simon September 25, 2017 at 2:22 PM #

    My name is Cassandra. If you think that the economic decline stops next year, you are wrong. I have seen it in Spain and Greece before. Barbados has only reached level 3 out of 10 on the austerity scale of IMF so far. More will come.


  29. TheGazer September 25, 2017 at 10:00 PM #

    Evry Bajan know in his heart of hearts that the worst is yet to come……

    We are all hoping for the Hail Mary pass where someone catches the last desperate toss of the football and scores a touchdown (turn the economy around/stamp out cronyism/nepotism/corruption)


  30. Simple Simon September 25, 2017 at 11:01 PM #

    Tron September 25, 2017 at 9:51 PM “If you think that the economic decline stops next year, you are wrong.”

    I think no such thing.

    I simply said that if as you suggest NIS pensions are cut by 50% people WILL DIE. Since this is a blog I I don’t know where you are commenting from, but I am not sure if you are aware that the basic old age pension is $155.00 BDS per week. Cut by 50% that comes to $77.50 BDS per week, or in USD terms to about $39 USD per week, or about $5.48 USD per day.

    Now since you are a numbers man tell me how would you spend that in order to provide 2,000 calories per day, water, electricity, very likely medicine, and perhaps land rent, or land and house rent, and as chad55555 would suggest property insurance, retrofitting your home to bring it up to strictly enforced codes, AND savings.

    Show me you economic genius.


  31. NorthernObserver September 25, 2017 at 11:25 PM #

    “BU’s earlier comment points to why, Sagicor is a big donor.”

    I do not read every thread. A big donor to whom?


  32. NorthernObserver September 26, 2017 at 12:51 AM #


    I suspect you maybe barking up the wrong tree. The BSE is unlikely the target. Rather the FSC and the various relevant legislation


    The actual decision of what offer was made, was decided by the C&W Bdos Board of Directors, irrespective of whose advice was sought.

    I will suspect the only way around this current dilemma, is to get other “opinions of fairness”, but the requisite professionals will need access to confidential corporate documents.


  33. David September 26, 2017 at 1:20 AM #

    Reminding Alien why the university will tread carefully so as to not upset donors.


  34. Alien September 26, 2017 at 3:09 AM #

    David, if learning is curbed by financial support, is raising money the main reason for the operation. The corporate law students and professors may never get another chance like this. I am repeating that the aggrieved shareholders should pool their resources and efforts to get reliable legal guidance. Some lawyers will be reluctant to take on a large company. This is not a case for a golf playing lawyer.


  35. Alien September 26, 2017 at 4:06 AM #

    How do you function in an environment where failure is likely no matter how much the law is on your side? How do you function in Barbados?


  36. Well Well & Consequences Observing Blogger. September 26, 2017 at 5:36 AM #

    The one place on earth you do not want to invest your hardearned personal finances…Barbados, too much insider trading and the minorities who handle these funds, most can be described at best…as shady.


  37. Alien September 26, 2017 at 6:56 AM #

    Bob Dylan – Blowin’ In The Wind Lyrics

    How many roads must a man walk down
    Before you can call him a man?
    How many seas must a white dove sail
    Before she sleeps in the sand?
    Yes, how many times must the cannon balls fly
    Before they’re forever banned?
    The answer my friend is blowin’ in the wind
    The answer is blowin’ in the wind.

    Yes, how many years can a mountain exist
    Before it’s washed to the sea?
    Yes, how many years can some people exist
    Before they’re allowed to be free?
    Yes, how many times can a man turn his head
    Pretending he just doesn’t see?
    The answer my friend is blowin’ in the wind
    The answer is blowin’ in the wind.

    Yes, how many times must a man look up
    Before he can really see the sky?
    Yes, how many ears must one man have
    Before he can hear people cry?
    Yes, how many deaths will it take till he knows
    That too many people have died?
    The answer my friend is blowin’ in the wind
    The answer is blowin’ in the wind.

    Songwriters: BOB DYLAN
    Blowin’ In The Wind lyrics © Sony/ATV Music Publishing LLC


  38. Alien September 26, 2017 at 6:59 AM #


  39. NorthernObserver September 26, 2017 at 11:32 AM #

    your point should NOT happen here. I will surmise that Sir Hilary’s nomination as a C&W Board member was at the behest of Sagicor (he is also on the Sagicor Board, and a known bud of Dodridge). Sagicor is the shareholder in C&W, not UWI. Hence Sir Hilary was placed into a known potential ‘conflict of interest’ situation. This is Sagicor’s fault. And from May 2016 when the C&W parent was purchased, by a private company, there was a better than 50-50 chance, the strategy would be to seek to privatize all the public subsidiaries, like C&W Bdos.

    The cessation of the dividend sometime before, clearly placed downward pressure on the stock price, for what is the capital gain potential when the stock is 80% owned by a single owner. I do not have access as to who traded shares after the dividend cessation.

    The door is wide open for some aggressive person to seek a class action suit, whose payment is a percentage of the price above the offered 2.86. Naturally you need a majority of the minority ownership to buy into this. It is risky, as company valuations (opinions of fairness) are among the most inexact of sciences. Yet $4/share would seem well within reach. You never know exactly how these will play out until you try.


  40. David September 26, 2017 at 12:11 PM #

    Thanks NO.

    It seems unlikely anything will come of this concern being advocated by Alien for the reason given. The large companies understand our passive BSE and minority.shareholder ennvironment not to mention it’s incestuous nature.


  41. Hal Austin September 26, 2017 at 12:18 PM #

    Northern Observer,

    The door is wide open for some aggressive person to seek a class action suit,….

    Northern Observer, does our legal system allow for class actions? I thought we had test cases? There is a difference. In the US they have class actions.


  42. NorthernObserver September 26, 2017 at 12:29 PM #

    I will suggest the bottleneck here is none of the above, but our judicial system. To take on this fight, one is forced to use the courts. This is the ace C&W has on their side.


  43. NorthernObserver September 26, 2017 at 12:33 PM #

    I do not know the status of class actions or similar in Bim. Test cases are very different and unsure that concept is even applicable here. The test, if you will, is on the valuation not the law itself.


  44. David September 26, 2017 at 12:33 PM #

    If the environment was conducive to litigation in the courts would it make a difference given our nuance as a people. A hypothetical perspective it is we know. Where there is a will there is a way, ask Comissiong!


  45. Hal Austin September 26, 2017 at 12:56 PM #

    Northern Observer,
    There is a difference, as I said. This follows on from the point you made at 11.32am. I am not sure what you mean by the test is about the valuation and not the law.
    Courts deal in law, not equity valuations. The market deals in valuations. The whole discussion about C&W share valuations is a non-argument – as I have said before, the market determines the value of shares, supply and demand.
    There is no compulsion for the NIS to sell its shares to C&W. This is how Barbadian taxpayers are robbed. About a test case and class action, we must get it right.
    This issue confuses some experienced lawyers in the UK. I remember having some bitter discussions with lawyers (advocates) about this very issue. In a test case, a representative case goes forward and according to the outcome, all similar cases queuing up behind are treated likewise.
    In class action, all the cases joined in the action are treated similarly.


  46. Hal Austin September 26, 2017 at 1:25 PM #

    Just heard the BBC’s health editor talking about class action over contaminated blood and HIV. Goes to show that even experienced people can make that basic mistake. Of course he was talking about a test case. Editor’s are not what they used to be.


  47. ForHalAustin September 26, 2017 at 1:25 PM #


  48. ForHalAustin September 26, 2017 at 1:30 PM #

    Class Action | Wex Legal Dictionary / Encyclopedia | LII / Legal …
    Class Action: An Overview A class action is a procedural device that permits one or more plaintiffs to file and prosecute a lawsuit on behalf of a larger group, …


  49. Hal Austin September 26, 2017 at 1:39 PM #

    I repeat, you have class actions in the US. This is a US definition. You do not have class actions in England and Wales, but test cases.
    While you are at it plse be more creative in choosing a silly name.


  50. NorthernObserver September 26, 2017 at 2:02 PM #

    “In a typical class action, a plaintiff sues a defendant or a number of defendants on behalf of a group, or class, of absent parties.” In this case the “class” are all those shareholders in C&W B’dos who are not C&W entities.

    The courts are not being asked to value anything. The valuation, or fairness opinion, will be provided by professionals so trained. The court will be asked to determine what represents a “fair market valuation” transactional price. That is, which fairness opinion is “most accurate”.

    It is notional mistake, to assume the market in Bim (BSE) determines value. The BHL scenario is firm proof it does not. Nor is the most recently traded share prices any guide to valuation. You may recall, BHL shares had been trading at $2.50, when Massey accepted $4 from Ambev/SLU and KPMG concluded in a “fairness opinion” $4 to be “fair”, while pegging the FMV between $4.90-$5.60. The final price after Ansa stepped in was $7.10. WIRR also sold at a premium to last traded share price.

    I will contend the “fairness opinion” rendered by D&T is “poor”. Unlike the BHL opinion, it gives no numerical arguments, simply an exhaustive list of factors considered, and the subsequent conclusion that $2.86/share is fair. The question is “fair to whom”?

    Now Barbadian law may not allow for “class actions”, I am not a legal expert. However, this would be the preferred method, as all the minority shareholders stand to benefit from any increase in the transactional price. You live in the UK, I am unfamiliar with laws there. However, in Canada, a former colony located next to the USA, both test and class actions are allowed.


  51. Hal Austin September 26, 2017 at 2:28 PM #

    Northern Observer,
    I am not a lawyer either. But, since 1999 the law in England and Wales allows for a limited number of class actions. So far there have been one or two cases, literally. What the law also allows are what we call super complaints, but only certain organisations can bring super-complaints ie Which? and the Child Poverty Action Group. To do so they must get permission.
    You will note that both are in the consumer protection area. A casual group of disaffected consumers cannot just grab a lawyer and bring a class action suit.
    As to the market, that comprises more than the stock exchange; all 300000 people and corporations in Barbados can buy the shares, if the NIS will sell them to them, at whatever price. That is how the market works. Expert witnesses may give a personal view, but in the end fairness is determined by the seller and buyer.
    If you bought a Bombardier jet for Can$10m and sold it to me for Can$2m, that is the market value.


  52. ForHalAustin September 26, 2017 at 2:40 PM #

    Fair Value is Not Fair Market Value
    When the definition of fair value is not clearly defined, parties may turn to relevant case law for guidance. Given its meaningful history with shareholder matters, Delaware case law is often cited in texts covering the application of shareholder level discounts in a fair value context. Opinions in three cases, Tri-Continental Corp. v. Battye,4 Cavalier Oil Corp. v. Harnett,5 and Swope v. Siegel-Robert, Inc.,6 shed further light on the subject. In Tri-Continental, the Supreme Court of Delaware held that “the stockholder is entitled to be paid for that which has been taken from him, viz., his proportionate interest in a going concern.” Further, in Cavalier Oil, the Supreme Court rejected the use of a minority or marketability discount, stating “the appraisal process is not intended to reconstruct a pro forma sale but to assume that the shareholder was willing to maintain his investment position,” and that failing “to accord a minority shareholder the full proportionate value of his shares imposes a penalty for lack of control, and unfairly enriches the majority shareholder.” Finally, in Swope, the Eight Circuit held that, “the marketability discount is incompatible with the purpose of the appraisal right, which provides the dissenting shareholder with a forum for recapturing their complete investment in the corporation,” and that “the application of a minority discount undermines the purpose of a fair value appraisal statute by penalizing minority shareholders for their lack of control and encouraging majority shareholders to take advantage of their power.” These sentiments, which are echoed in various opinions issued by the Delaware courts, suggest that the fair value standard is similar to the fair market value standard without application of valuation discounts (i.e., the pro-rata value of a shareholder’s interest in a company).


  53. Hal Austin September 26, 2017 at 2:48 PM #

    Fair value is an accounting term; market value is the price paid for the asset. If you are valuing a company, you use fair value; if you are selling shares you use market value.


  54. ForHalAustin September 26, 2017 at 3:00 PM #

    Think about it. Current value is based upon estimated net future economic benefits. Traders and analysts use estimates and models to quickly respond to ongoing events that may impact future economic benefits when trading. On the other hand, when a company is considering the acquisition of another, much more due diligence on all aspects of the target company is conducted to determine those future economic benefits. Market value as in trading price in an informed market is a readily available approximation of fair value. Small amounts of shares, inherited or acquired through employee plans, being disposed of for quick cash would hardly reflect fair value.


  55. NorthernObserver September 26, 2017 at 3:36 PM #

    “If you bought a Bombardier jet for Can$10m and sold it to me for Can$2m, that is the market value.”

    That example is of a private transaction between you and me. If me represented 20 owners and you represented 100 owners (shareholders) it may not be so clear, especially if one of the 20 owners selling stood to benefit in a manner the other 19 did not (ie was a significant shareholder in you). What if you turned around and sold the jet within days for $5 million? Has the market value dipped and gained again, or were you able to find a buyer the prior seller could not.

    The notion of value in a fairness opinion is very extensive and complicated. And why one set of professionals can arrive at sometimes large differences from another. The key becomes, where within the opinion are the differences? And why.

    What is assured, is if I bought into C&W in 2012 at 5.30/share and earning a dividend, and the price tanked thereafter, despite dividend cessation, and the company posting solid profits in 2016, I would be rightfully pissed. My risk for sure. Yet, I think it is possible to get >1 fairness opinions which may place a value in excess of 2.86.


  56. Alien September 26, 2017 at 5:23 PM #

    Is it likely that this is where C&W Barbados is heading?

    AUGUST 8, 2017 by Nic Fildes, Telecoms Correspondent
    Liberty Global on target to spin off LatAm arm LiLAC by year end


  57. NorthernObserver September 26, 2017 at 6:06 PM #

    who knows? I believe C&W Caribbean operations fall under LiLac. Suspecting the hurricane damage may delay some of those plans.


  58. David September 26, 2017 at 7:38 PM #

    Going back to the issue of market determining price in Barbados. Anyone who has observed trading at the BSE over a period of time would have observed the simple tactic of brokers selling high and buying low to ”massage” price over time.


  59. What a World We Live In October 1, 2017 at 11:38 AM #

    Jagdeo still trying wid Burnham destiny

    Jagdeo, that scamp, try to put ee foot in Burnham shoes. He think he binna create ee destiny.
    But everybody know destiny is not created by de shoes you wear but by de steps you take. Burnham tek he own steps in ee own shoes and create ee own destiny. He tek some small steps.

    Jagdeo try to tek some big steps in Burnham shoes but ee still ain’t create his destiny. Burnham miss jail. Dem boys certain Jagdeo would not be as lucky as Burnham because he created a criminal culture in Guyana. A senior cop station in Berbice get ketch in Berbice selling fuel marker two days ago.

    A senior customs officer get send home. A Customs broker and a businessman in custody. A whole wharf of Customs officer get transfer fuh corruption.

    Another senior officer lock up cocaine in he office in a suitcase. Nobody ain’t break in but de cocaine disappear.

    Lolo Feel from GEE COME get instructions to call in de police pun heself and others fuh de scampishness de others do.

    All these things never happen before. Is when Jagdeo tun president that all these skullduggery started.

    In 2011 he give he friend Bee Kay a contract fuh drill three well. One deh at Eccles, one was fuh Hope and de odda was fuh Mon Repos.

    This man never drill a hole in ee life yet Jagdeo give him millions of dollars to dig a hole. Six years gone; Jagdeo gone and yet de hole nah complete.

    De one at Eccles got people bathing at de road corner. De one at Mon Repos got people bathing in de trench and de one at Hope got people still hoping.

    All dem residents who waiting fuh water from Bee Kay pipe not happy. But dem boys remember happiness is an inside job. Don’t assign anyone else that power over your life.—Mandy Hale seh suh.

    Talk half and wear you own shoes to create you own destiny.


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