The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of the Bahamas’ managing director “fully endorses” minority shareholder representation on the BISX-listed institution’s Board of Directors, the only obstacle being how to achieve this.

Paul McWeeney told Tribune Business that the bank had to “find a mechanism to make it happen”, following an annual general meeting (AGM) which saw numerous unhappy investors call for independent Board representation of their interests.

Mr McWeeney, speaking after Thursday night’s somewhat heated AGM, said Bank of the Bahamas had received “very good recommendations from the floor”, the majority of which centred on the 35 per cent minority shareholders gaining Board representation at the Government-owned bank.

“I totally endorse that. I don’t think anyone objects to that. It’s just finding a mechanism to make that happen,” Mr McWeeney told Tribune Business.

“I want the minority shareholders to have some say in the bank. I fully endorse that. “

Minority shareholder interests have frequently been a concern in the Bahamian capital markets, given that most BISX-listed and publicly traded companies have either a majority shareholder or group of ‘like minded’ controlling shareholders whose interests dominate the Board of Directors and its representation.

This has frequently led to concerns over whether the interests of minority shareholders are being properly protected, especially when the company involved has made a loss or series of losses; is embroiled in some sort of controversy; or is the subject of a takeover bid.

In Bank of the Bahamas’ case, its shareholders have suffered a collective $69 million net loss for the 2014 financial year; it has had to be ‘rescued’ by the Government to the tune of $100 million; and the Government appoints the entire Board of Directors.

Thus it is little surprise that the minority investors want Bank of the Bahamas Board representation, and it remains to be seen whether the backing from Mr McWeeney soothes their cries.

Minority investors who attended Thursday’s AGM said the Bank of the Bahamas Board and management replies were “vague” when the issue of minority investor representation on the Board was raised.

The Government, which owns 51 per cent of the ordinary voting rights and 65 per cent of the equity, may be reluctant to cede too much control.

Mr McWeeney, though, said chairman Richard Demeritte “went as far as to say he had no objection to a representative from the minority shareholders” viewing the bank’s recovery plans.

And the Bank of the Bahamas chief said he welcomed investor recommendations and suggestions being incorporated in that plan.

However, with the Government currently appointing all Bank of the Bahamas’ directors’, one disgruntled minority shareholder suggested “the buck” for the bank’s woes stops with the person who appoints them - Prime Minister Perry Christie.

Dionisio D’Aguilar told Tribune Business: “It’s mind boggling to me, and worrying to me, that the person making the decisions, the Prime Minister, while he seeks advice, he really has no idea how to run a bank. It manifests itself in the Board and how it runs the bank.

“It ain’t looking good. The buck stops with Perry Christie. No doubt about it. He’s the only one who can make a decision about what’s going on at that bank. He appoints the Board, and the buck stops with him.

“If I was him, I would get some people in there who are heavyweights, and will ask the tough questions and make the tough decisions. On that Board, most people are political appointees.”

Mr D’Aguilar also railed against the reappointment of Ernst & Young as external auditors, given that the firm had missed the incorrect classification in 2013 of $40 million worth of loans that should have been branded ‘non-performing’.

Mr McWeeney, meanwhile, repeated his plea for shareholders and the public to give Bank of the Bahamas time to return to profitability.

“Leave us alone. Let us do our job. The issues Bank of the Bahamas has are not unique to Bank of the Bahamas,” he told Tribune Business.

“We have developed a road map to profitability, and that’s what we’re focusing on. That’s my commitment to the bank; within 12 months of Resolve to make the bank profitable. We should be making a profit.

“I’m very confident that Bank of the Bahamas is going nowhere, and that we have an extremely bright future.”

Mr D’Aguilar, though, was less convinced, saying: “The bank is in a horrendous financial position, and I don’t know what is going to happen.

“I don’t think the bank is going to fail, but how much is this going to cost the taxpayer?”