The Tribune

• Nassau Gas ‘in dark’ on its shareholders

• Platform chief pledges it will get register

• Tropical Gyro concern on $20k ‘refund’

By NEIL HARTNELL

and YOURI KEMP

Tribune Business Reporters

Two companies that raised equity capital through the embattled ArawakX crowd-funding platform yesterday complained that they are either still owed money or have yet to learn who their new shareholders are.

Mark Newell, Nassau Gas & Tanks principal, told Tribune Business it was “bizarre” he still does not know the identity of his investors more than nine months after completion of his capital raise even though he is now receiving calls from those increasingly alarmed by the Securities Commission’s bid to wind-up the crowd-funding platform over multiple alleged governance, regulatory and solvency breaches.

He asserted that ArawakX had informed him it was “policy” not to disclose the register of investors/shareholders to issuing companies, but this was immediately refuted by D’Arcy Rahming senior, the platform’s chairman and chief executive, who affirmed that it was Mr Newell and Nassau Gas’ “right” to possess such information.

“Mark’s mistaken,” Mr Rahming told this newspaper. “The conversation I had with him was that I have to get the Securities Commission’s ‘OK’. The issue has gone through, the other guys got their [investor] lists and he will get his list as well. I can provide it, give the list, but we have to get the Commission’s permission.

“I can get the list to him at any time. By all of this, they [the Commission] have acknowledged that he has received his stuff and I’m now in a position to get him his list. We’ve done it for everybody else. We’re doing it for him. It’s his right to have that. It’s his.” Mr Rahming also previously told Tribune Business that neither companies that have finished their capital raise, such as Nassau Gas, nor their investors will be impacted by ArawakX’s threatened winding-up.

Mr Newell, though, yesterday told Tribune Business it was “embarrassing” to be contacted by purported investors in Nassau Gas and not know if they are genuine. “I am now getting concerned messages from people saying they invested and want an update on the Arawak X debacle. I have no idea what to tell them,” he said, complaining that he had been left “totally in the dark” by the crowd-fund platform.

While Nassau Gas’ equity capital raise closed in December 2022, having raised the minimum amount targeted, Mr Newell said the company only received the $123,746 proceeds some four-and-a-half months later - on May 19, 2023 - after MDollaz, the entity that trades as ArawakX, had its accounts unblocked by Bank of The Bahamas.

The BISX-listed bank imposed the freeze due to uncertainty over who controlled ArawakX amid the battle between Mr Rahming and his son, on one side, and Jimmy Campbell, the former Colina Insurance Company president, who was the platform’s largest investor with a $1.3m capital injection plus a further loan that took his contribution to almost $1.6m.

Mr Campbell, together with ex-Securities Commission executive director Hillary Deveaux, as well as former IBM (Bahamas) chief Felix Stubbs, took his complaints over ArawakX’s governance, business practices and financial health to the regulator on October 11, 2022, barely three weeks after Nassau Gas’ crowd-fund began. And Bank of The Bahamas froze the platform’s accounts just three weeks later at end-October 2022.

Mr Newell said had he been aware of such developments at the time he would have called a halt to the capital raise. He disclosed that he only discovered what had happened in April 2023 due to a chance encounter with Mr Rahming, who told him what had occurred.

Justice Simone Fitzcharles, in a May 16, 2023, Order ruled that Bank of The Bahamas give ArawakX back access to its bank accounts, and the Nassau Gas chief said he received the proceeds from the crowd-fund three days’ later. “We still don’t have any clue who our investors are. People are messaging me and I’m saying I don’t even know if you’re an investor,” Mr Newell told Tribune Business. “I just want to give the money back. I want to be out of this. What can I say?

“May 16 was apparently when Bank of The Bahamas opened their accounts, and they quickly gave the money to the three or four of us. I got a wire transfer from MDollaz on May 18 for I think it was $123,000 and change. When they showed me the letter, it was in the $160,000s. They took $40,000 in fees. There were a couple of line items.”

Mr Rahming, in an April 12, 2023, interview with Christina Rolle, the Securities Commission’s executive director, and other senior executives at the regulator, confirmed that $123,746 was due and outstanding at that time to Nassau Gas as offering proceeds “because they are all locked up at Bank of The Bahamas” due to the account freeze. Some $14,000 was also owed then to Dr Daniel Johnson’s Footcare RX and another $4,000 for Tropical Gyro.

Justice Simone Fitzcharles, in a May 16 Order, ruled that Bank of The Bahamas unfreeze the accounts, hence the payment to Nassau Gas some three days later. However, Mr Newell said: “I’ve never been in this situation before. I’m not doing this again. We could have stopped the offering if I had known. They kept us going and going, and we stopped just before Christmas. From that we heard nothing formal until May. Nothing. Zero.”

It was only his chance encounter with Mr Rahming that enabled him to learn what had happened, and Mr Newell added: “This is supposed to be a nice thing to get customers to make some money every year, but it’s all gone pear-shaped.” However, Nassau Gas and the other crowd-funders are still operating despite ArawakX’s woes.

Chef Kevin Culmer, principal of Tropical Gyros, told Tribune Business he is still owed $20,000 that ArawakX has promised to repay him based on an accounting error. But, with the platform facing the threat of winding-up, he is doubtful he will be made whole.

“There was a line item expense that I queried, totalling $20,000, that I knew nothing about at our initial meeting,” he explained. “So they [ArawakX] agreed, based on my presentation, that that shouldn’t be taken out, saying that I didn’t know about it at the time. They have agreed to repay that to me, but they weren’t in a position to repay that to me at that time because they didn’t have it.

“But when they signed off on the official closure of the raise, they listed on there that the $20,000 road-show marketing fee they had listed, they were going to reimburse me that and give that back to me. I have not received that yet.”

Tropical Gyros closed its capital raise in October 2022, having generated $272,123 from investors as per ArawakX’s website. The company has since been informing investors on its expansion plans, new locations and what they will likely see in investment returns and when.

Chef Culmer said: “The sad thing about all of this is that this platform is such a good opportunity for entrepreneurs like myself that can’t access traditional funding, and also for laypersons who want to invest in a company that they see as being progressive and viable, and that can give them an opportunity to earn some passive income.”

He is now seeking Securities Commission “guidance” on how dividend payments will be handled. “What would happen is that when we start paying dividends, we would issue one dividend to ArawakX and then ArawakX would distribute the dividend payments based on the allocated number of shares a person had,” Chef Culmer said.

While he has shareholder list, he added that it was defective because some contact information was incorrectly entered. “Some of the names were omitted because I already received e-mails from investors claiming that they have never received a notification from me and their name was never on my list, so I had to go and send it to them,” Chef Culmer said.

“So I’m trying of find out from the Securities Commission how to go ahead. Do I now wait until their court case is done on October 13 to register all of the shareholders on my company registry in the Registrar’s Office, which is going to be a tedious task because it’s over 500, but still needs to be done so that the investors and shareholders can feel protected.”

Dr Danny Johnson, former Cabinet minister and president of Foot and Ankle International, through his company, Foot Care RX, raised $249,902 in October 2022. He said he has gotten “all of his money” from the capital raise through the crowd-funding platform.

“This is our first year and we will have our end-of-year report. At Foot Care RX we are doing well. I congratulate everyone involved and we are up and running. We’re doing well and, as far as I am aware, everything is running clear and clean. There is no problem,” Dr Johnson said.

James Owen, Pinnacle Franchise Brands’ director, operator of the Red Lobster franchise, said: “We did receive our funds. The 800 shareholders that invested through the exchange, we’ve got the funds. ArawakX gave us about $350,000.”

ArawakX said that Pinnacle Franchise closed its raise in January 2022 at $2.007m. “Pinnacle is moving forward. ArawakX is irrelevant to our operation. The shareholders, for Pinnacle, we have the details on all of the shareholders and we are in direct communication with our shareholders,” Mr Owen said.