The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport “can ill-afford” another shareholder squabble at the Grand Bahama Port Authority (GBPA), the FNM’s deputy leader yesterday warning that the fight over the Hayward estate could “retard growth” throughout the island.

K P Turnquest told Tribune Business that the uncertainty created by placing the late Sir Jack’s trust, and investment vehicle, under Supreme Court supervision could deter both Bahamian and foreign investors from doing business in Freeport.

The GBPA, reacting to Tribune Business’s exclusive revelations about the ‘battle for control’ that has erupted over Sir Jack’s estate, itself rushed out a statement yesterday to reassure the private sector and residents that all was still well.

“The Grand Bahama Port Authority (GBPA) assures its licensees and the Grand Bahama community that the business of the GBPA continues as usual and is in no way impacted by the October 5 court Order,” it said.

“Neither the GBPA nor its parent company, InterContinental Diversified [Corporation] are the subject of the Order, and GBPA executives and management will continue with the management, promotion and development of Freeport in the best interests - and for the well-being - of the people of Freeport and the wider community of Grand Bahama.”

Yet Tribune Business revealed yesterday how former Cabinet minister, Ryan Pinder, and his Deltec Bank & Trust colleague, Paul Winder, have been appointed as Judicial Trustees for the ‘Sir Jack Hayward Discretionary Settlement 1993’.

And, perhaps of more significance, they have also been appointed as the Supreme Court-supervised receivers for Seashells Investments Ltd.

That, as this newspaper reported, was the late Sir Jack’s British Virgin Islands (BVI)domiciled investment vehicle that held his 50 per cent equity stake in the GBPA and its Port Group Ltd affiliate.

That equity stake was held through InterContinental Diversified, which sits between the GBPA and Port Group Ltd in the structure created by Sir Jack and his late business partner, Edward St George.

Thus the effect of Monday’s Order is to place the Hayward family’s 50 per cent ownership stake in Freeport’s quasi-governmental authority, and the company that owns half of the city’s most profitable assets and infrastructure (Port Group Ltd), into the hands of Supreme Court supervision.

“My reaction is: Here we go with round two,” Mr Turnquest told Tribune Business of its report, alluding to the eerie similarities between the Hayward family squabble and that which beset the late Mr St George’s estate for four years.

In that episode, too, an internal family squabble broke out over the estate, and quickly morphed into a wider battle that effectively ‘paralysed’ the GBPA and its decision-making for four years.

Suggestions that all was far from well within the Hayward estate have been circulating for some time, but they have erupted into the open over an alleged attempt to remove two trustees of the late Sir Jack’s trust back in May.

“Most of us saw this coming,” Mr Turnquest told this newspaper yesterday, “but having had the experience with the St Georges, we’d hoped the Haywards would have made sound preparations before Sir Jack passed, so they would not have these kind of issues.

“Obviously, Freeport can ill-afford another shareholder dispute. This whole disturbance in the Port Authority that results from all this internal squabbling has not only retarded growth in Freeport, but growth in Grand Bahama. It gives us significant concerns to see this happening.

“I think we were all aware, concerned of rumblings within this investor group [the Haywards], and now we see that there is some truth to that. The last one took four years, and it’s still not settled.”

Mr Turnquest agreed that the discord within the Hayward estate, and appointment of Judicial Trustees, could dissuade potential investors from looking at Freeport due to the “uncertainty” over who was in charge at the GBPA.

“Once again, any kind of uncertainty drives away investors,” the east Grand Bahama MP said. “No one wants to get involved in a litigation situation.

“Any potential investor would have to consider whether he wants to be involved at this time. It’s not a nice situation.”

Tribune Business also reported that the latest eruption in the Hayward camp was especially ill-timed for the Government, which is currently embroiled in the middle of a consultation/review process over Freeport’s short and long-term future.

It has already extended the investment incentives that were due to expire on August 4, 2015, for another six months, and is currently assessing the recommendations on potential reforms to the Hawksbill Creek Agreement that were supplied by a committee it appointed.

The outbreak of infighting in the Hayward camp threatens to disrupt this effort, and potentially kill-off hopes the Christie administration has that a new investor/owner will be found to buy-out the two families and take over the GBPA.

“It certainly complicates matters with respect to any negotiations that may be going on with the Port Authority and Freeport’s future,” Mr Turnquest agreed.

“They [the Government] don’t know who their partner is, and who they are negotiating with. We have to sit and wait now to see if this has a long-term detrimental effect on what we’re trying to do in Freeport. I would be very concerned about what’s happening.”

Mr Turnquest added that he found Mr Pinder’s appointment as Judicial Trustee “interesting”, given that he recently sat in the Christie administration’s Cabinet as financial services minister.

He questioned whether this might make the GBPA more amenable to what the Government is seeking to do with its Hawksbill Creek Agreement review.

The ‘battle for control’ over Sir Jack’s estate has pitted his son, Rick, his siblings and their children against Patty Bloom, Sir Jack’s long-time partner and her children. And, hovering in the background behind the Blooms, is alleged to be the controversial former GBPA chairman, Hannes Babak.

Contacts close to the Bloom camp suggested that Sir Jack’s children were unhappy with their share of the family’s assets, and the fact that the ‘lion’s share’ of the estate had been bequeathed to Ms Bloom and her family.

Yet sources close to the Hayward children and grandchildren rejected the “greed” allegation, claiming instead that the situation has arisen from fears that Mr Babak is seeking to take control of the estate via the Blooms and, ultimately, take over the GBPA and Port Group Ltd.

This, though, was countered by contacts familiar with the Bloom side’s position. They argued that the Hayward children were merely using Mr Babak as a ‘bogeyman’ or ‘red herring’, raising his spectre in a bid to get their way.

The spark that lit the latest legal battle appears to have stemmed from alleged efforts in May 2015 to remove two trustees for the ‘Sir Jack Hayward Discretionary Settlement’.

The two trustees in question are Richard DeVries and former GBPA chief financial officer, Ian Barry. The October 5, 2015, Order by Justice Indra Charles suggests that an entity called Prometheus Services Ltd was then left as “sole trustee”.

Although the Order is not explicit, ‘reading between the lines’, it is clear that the Hayward children believe Prometheus Services Ltd is ultimately being controlled by Mr Babak.

The October 5 Order mandates that “an inquiry as to the validity and effect of two documents”, both purporting to remove Messrs DeVries and Barry as trustees on May 17, 2015, be held.