The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former FNM chairman yesterday blasted the "nonchalant" attitude of many public companies to respecting minority shareholder rights, especially the timely disclosure of material information.

Darron Cash, also an ex-senator, told Tribune Business there was "a pervasive level of disinterest" in ensuring retail investors were provided with details they were entitled to by law and market rules.

A Bank of the Bahamas shareholder (BOB), he, too, confirmed he had yet to receive any materials relating to today's annual general meeting (AGM) - in common with the complaints of other minority investors.

"We've got to get to the point in this country where proxy materials for annual general meetings (AGMs) are put on the Internet, like they do in most countries," Mr Cash told Tribune Business.

"The unfortunate reality is that there is a pervasive level of disinterest and nonchalance when it comes to respecting the rights of shareholders to receive information. It is time for the system to change."

Respect, and protection, for minority investor rights has been a recurring topic in the Bahamian capital markets for the past two decades, especially given that the majority of BISX-listed stocks are controlled by either a majority shareholder or group of like-minded shareholders.

Mr Cash thus joined Mike Lightbourn, Coldwell Banker Lightbourn Realty's president, and Dr Johnathan Rodgers, the 'eye doctor', in confirming they had yet to receive the BOB AGM materials that publicly-traded companies are mandated to provide shareholders as part of their listing obligations.

Mr Lightbourn, though, disclosed that BOB had finally e-mailed him its 2016 annual report, AGM agenda and proxy voting form yesterday morning - just hours after Tribune Business had gone on sale featuring his complaints about the lack of disclosure, and suggestion that today's AGM should be postponed.

Meanwhile, Mr Cash said he "didn't want to ascribe any untoward motives" to BOB's failure to provide him with the AGM materials for a third consecutive year.

He reiterated, though, that "if oftentimes becomes difficult to have information provided when the law says it should be provided".

The BOB AGM materials reveal that Kevin Higgins, a Central Bank of the Bahamas economist, and businessman Timothy Brown are the two persons nominated for election as an independent director to represent minority shareholders on the troubled institution's Board.

"Shareholders will be asked to elect one of these persons to serve as an independent director," BOB's proxy statement said. Whoever is elected will serve on a Board dominated by the appointees representing the Government's 79 per cent majority equity stake, which it holds through the Public Treasury and National Insurance Board (NIB).

Wayne Aranha, the former PricewaterhouseCoopers (PwC) partner and accountant, and Anthony Allen, ex-Scotiabank (Bahamas) chief, have been named as chairman and deputy chairman, respectively. The other two government-appointed directors are attorneys, Ruth Bowe-Darville and Kirk Antoni, with BOB acting managing director, Renee Davis, also holding a seat.

The BOB proxy statement also proposes a 30.8 per cent year-over-year cut in total director compensation, with shareholders being asked to approve a $225,000 payout for the financial year that recently ended on June 30, 2017.

The latter figure represents a $100,000 cut from the $325,000 total director compensation approved for June 30, 2016, which "was payable to eight directors and also included the chairman's remuneration".

The total director payout for BOB's 2016 financial year came in at $272,802, or $34,100 per director, which still means that 2017's figure represents a 17.5 per cent cut year-over-year.

Some may interpret this as sending a timely signal of prudence and cost-cutting from the top, given that BOB has racked up a combined $120 million-plus in losses over the past three financial years. However, the 2017 spend - should it be ratified - will have been incurred by the former Board that was chaired by Richard Demeritte.

Mr Cash said he and other investors would again seek to hold BOB's Board and management "to account" at tonight's AGM, especially when it came to a recovery plan for the troubled bank.

The former senator reiterated his previous call for "regime change at the top", and said he was keenly interested in whether the new Board would signal change or "business as usual".

"I am most interested in having a clear sense of whether this new Board is going to announce meaningful changes in the management structure of the organisation," Mr Cash told Tribune Business.

"Perhaps it may be unfair to them, but it must be the case that in the next 30-90 days they have a meaningful conversation up and down the organisation with employees and customers.

"I hope they will listen to minority shareholders, and they must listen to people with a strong sense of the absence of clear, decisive leadership in the organisation," Mr Cash added.

"If they listen, they will hear the challenges rank and file employees up and down the organisation are having due to challenges with the leadership. If they listen, they will hear what will be a clarion call that there needs to be regime change at the top of the organisation."

The former FNM chairman said he was "going to be very keen to hear whether this Board is focused on business as normal, or if they intend to change".

He added that he was concerned about the talk of BOB opening a branch on Bimini to replace the departing Royal Bank of Canada (RBC), and ensure that island continued to enjoy a physical banking presence.

"If they propose to utilise the same business model going forward, what is going to be different?" Mr Cash asked. "One would have expected a new, innovative approach to providing these services.

"It cannot be business as usual. I look forward to hearing what the new Board has to say."

Mr Lightbourn called on BOB's Board to throw open the AGM floor and allow minority shareholders to ask as many questions as they want.

"The key will be if they answer all questions," Mr Lightbourn said. "I want to know that. Under Richard Demeritte, you were limited to one question and follow-up>"