The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Hannes Babak yesterday said he owed the late Sir Jack Hayward a duty to “get the best possible price” for his family’s 50 per cent Grand Bahama Port Authority (GBPA) stake, otherwise he would not have opposed its purchase by the world’s largest asset manager.

The former GBPA co-chair told Tribune Business that he “would never not promote” an offer by BlackRock, the global private equity firm, but the price had to fairly value Freeport’s quasi-governmental authority and its Port Group Ltd affiliate.

Contacted by Tribune Business after the latest rift in the Hayward family erupted into open warfare, Mr Babak said it was “completely wrong” for the late Sir Jack’s children and grandchildren to allege that his interests and theirs - in relation to the GBPA’s potential sale - were not aligned.

The Austrian businessman added that, in his capacity as an adviser to the Sir Jack Hayward Discretionary Settlement 1993, he had acted “in the best interests” of all beneficiaries by engineering the removal of its two individual trustees.

Mr Babak said he had simply explained to Keith Griffiths, the Settlement’s protector, that its main asset - the GBPA/Port Group Ltd equity stake - was “at risk” because the individual trustees, Richard DeVries and Ian Barry, wanted to agree a “very poor deal” with BlackRock.

And he also denied the Hayward family’s claims that Mr Griffiths’ deteriorating health meant he did not know what he was doing when he signed documents ‘authorising’ the two trustees’ removal.

Emphasising that he was speaking reluctantly, and only to provide his ‘side of the story’, Mr Babak confirmed that he and Freeport-based attorney, Andre Feldman, visited Mr Griffiths in the UK on May 17, 2015, to explain why it was necessary for Messrs DeVries and Barry to be removed.

“I can tell you that Keith Griffiths was in perfect mental health,” Mr Babak told Tribune Business. “Physically he was not in the best condition, but that had nothing to do with his mind.

“His mind was well, and he was giving clear conversation. He asked about Freeport, projects in Freeport. He gave me no sign that he was not in perfect mental health.”

Mr Babak’s assessment differs markedly from the of the Hayward family, who have alleged in court papers that Mr Griffiths was “so mentally and physically frail” that he spoke of getting a friend “to DRIVE him from Freeport to Miami”.

Mr Babak, meanwhile, also confirmed that the purpose of his and Mr Feldman’s visit was their concern that Messrs DeVries and Barry were about to agree a deal with BlackRock that was not in the interest of the Settlement and its beneficiaries.

“We went to see him [Mr Griffiths] to explain that the assets, the main assets of the trust, were at risk because it looks a very poor deal,” he confirmed to Tribune Business.

“The individual trustees want to sign a very poor deal for the trust... If it’s not in the best interests of the Settlement, Jack would expect me to raise it.”

Court documents obtained by Tribune Business have claimed that two of the three trustees for the Sir Jack Hayward Discretionary Settlement 1993 were removed by Mr Babak because his interests in a sale of the GBPA and its Port Group Ltd affiliate “may well not coincide” with those of the Hayward family.

The Hayward family attorneys, in their arguments, alleged: “It appears from the evidence of Rupert Hayward that Mr Babak arranged for the removal of the individual trustees because they wished to deal with a purchaser of the Settlement’s interest in the GBPA who was not introduced by him, and which proposed a partial sale of assets of the Settlement and deferral of consideration [purchase price].

“That proposal was not in Mr Babak’s interests because he claims to be entitled to $20 million upon the sale of the GBPA.

“Rupert Hayward formed the impression that Mr Babak was opposed to the proposal because under it the St George family would continue their involvement in running of the GBPA, and because the purchase price depended on the future performance of the relevant companies. These were terms which might not have suited Mr Babak.”

The former GBPA chairman, though, implied to Tribune Business yesterday that he would have recommended the BlackRock deal had it been in the Hayward estate’s interests.

While his comments indicated there was an issue with the purchase price offered by the private equity firm, Mr Babak declined to reveal details of the BlackRock offer, citing commercial confidentiality.

“I think BlackRock is a fantastic success story and amazing company,” he told Tribune Business. “I would never not promote a deal with BlackRock as long as it could be recommended and was in the Settlement’s best interests.

“BlackRock is the largest money manager in the world, and it would be wonderful if they purchased the GBPA and Port Group Ltd.

“It would be great to finally get a long-term investor with deep pockets that wants to develop Freeport to its potential. I would personally be totally happy if the Port Authority gets sold.”

Mr Babak added that the $20 million due to him once a sale was consummated would not influence the purchase price, nor how it was structured.

“I just hope it gets sold for the right price,” he said. “It’s the duty of the trustees, and anybody advising the trust and trustees, to get the best price possible. You have the duty to do it.

“I have lived for 35 years in Freeport. I have invested in property in Freeport. I would wish, and love, to see Freeport developed for what it could be.

“Everyone says the GBPA has to be sold, and I believe it should be sold. What cannot be aligned with me?”

Mr Babak also denied the Hayward children and grandchildren’s claims that “he appears able to influence the decisions” made by Prometheus Services Ltd, the corporate entity that was left as the sole trustee for the Settlement prior to the appointment of the Supreme Court’s Judicial Trustees.

“Since I’m not a director it’s not my role,” Mr Babak said. “I have no right.”

He confirmed, though, that he was friends with two of Prometheus’s three directors, Felix Stubbs and Tony Adderley. And he acknowledged that the third, Robert Anglade, was a friend of Mr Feldman.

“The key is that you want to find somebody as trustee, and in the case of a corporate trustee, that has unquestioned integrity and understands a trust, and how to handle the day-to-day operations,” Mr Babak said.