The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

City Markets failed to hold its advertised shareholder meeting yesterday after the Securities Commission blocked the now-defunct supermarket chain from doing so, Tribune Business can reveal.

Accountant Barry Newman, corporate secretary for City Markets’ operating parent, Bahamas Supermarkets, confirmed that the capital markets regulator sent the company a letter on Friday requiring it to cancel today’s planned meeting with investors.

“That is absolutely correct,” Mr Newman replied, when contacted by Tribune Business after this newspaper was tipped that the meeting was “cancelled by order of the Securities Commission”.

“They sent us a letter on Friday telling us not to have the meeting,” Mr Newman added. “They did give reasons, but I really don’t want to comment on them. I’d love to, but I don’t think I should.”

When asked whether the Securities Commission took that action because Bahamas Supermarkets had failed to comply with the Securities Industry Act and its regulations, particularly the stipulation that publicly traded companies had to give shareholders a certain period of notice before holding meetings such as an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM), Mr Newman replied: “It’s a good guess. It’s more than that. I’d love to comment, but I don’t really think I should at this point.”

Mr Newman also refused to say why City Markets had called the shareholder meeting, and what was on the agenda, although most investment analysts felt it was intended to complete the company’s formal winding-up and dissolution.

Tribune Business understands that Bahamas Supermarkets and its principal, Mark Finlayson, who heads Trans-Island Traders, its 78 per cent majority shareholder, are taking legal advice on the situation and may issue a press release later this week.

This newspaper was informed that the Securities Commission and Bahamas Supermarkets were at odds over the meeting and other issues, but Mr Finlayson could not be reached for comment.

Neither Dave Smith, the Securities Commission’s executive director, nor Mechelle Martinborough, its in-house legal counsel, returned Tribune Business messages seeking comment.

Separately, sources close to Bahamas Supermarkets denied to Tribune Business that Friday’s advertisement of the shareholder meeting was a ‘last minute notice’ intended to ensure as few investors as possible out of the 22 per cent minority showed up.

Rather, they said a previous advertisement announcing the meeting had been issued on February 1, 2013, and Friday’s version was designed as a ‘reminder’.

Still, Tribune Business pointed out that no circulars or information on the meeting had been mailed out to Bahamas Supermarkets shareholders, something sources close to the company conceded.

However, they suggested that the costs involved meant this was not feasible for a company that had ceased to operate. Audited financial statements were several years out of date, and Bahamas Supermarket’s defunct state meant it was impractical for Deloitte & Touche (Bahamas) to deal with the matter, or for the Bahamas Central Securities Depository to be paid to send out mailings, the sources argued.

A small advertisement, published in Friday’s Tribune Business section, informed shareholders of City Markets’ operating parent that the meeting was supposed to be held at 4pm yesterday at the former Burns House property on John F. Kennedy Drive - the company’s registered office.

That property is owned by an affiliate of Trans-Island Traders. Both companies, and the JFK Drive property, are ultimately owned by the Finlayson family.

City Markets shareholders are likely to have written off 100 per cent of their investment in the defunct supermarket chain.

City Markets’ demise has its roots in the ill-fated $54 million deal that saw Trans-Island Traders’ immediate predecessors, BSL Holdings, acquire the Bahamian supermarket chain from Winn-Dixie.

The transition from the US chain was botched, and City Markets slipped into consistent, multi-million dollar annual losses from which it never recovered.

Trans-Island’s purchase of the business, in late 2010, came too late to save it.