The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AN outspoken QC last night slammed the Government’s bid to strike out his legal challenge to the $35 million GB Power buy-out, and asked: “What do you have to hide?”

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the February 26, 2018, summons seeking to overturn the permission given to launch Judicial Review proceedings amounted to “Government obstruction and stalling tactics”.

The Judicial Review challenge is seeking to overturn the approvals that enabled Emera, the Canadian utility, to proceed with its buy-out of all Bahamian minority investors in BISX-listed ICD Utilities.

The latter, which has since been delisted, was the holding vehicle for a 50 per cent equity interest in GB Power. The deal enabled Emera to acquire 100 per cent of GB Power, but Mr Smith and his client, SeSaChe Ltd, a former ICD Utilities shareholder, obtained Supreme Court permission to challenge this - something the Government is now seeking to reverse.Legal documents obtained by Tribune Business show it is advancing its arguments on multiple grounds, including the claim that the Judicial Review is “premature” because alternative legal remedies were available to SeSaChe via the Companies Act sections dealing with unfair ‘shareholder oppression’.

The Government’s summons also alleges that Mr Smith’s action is “a fishing exercise” seeking to find a basis for Judicial Review, and claims that the approvals cannot be challenged via this means because they “involve private law contractual rights between a company and its shareholders” - not the decision or public law actions of a government body.

Audirio Sears, an attorney in the Attorney General’s Office, alleged in an affidavit that Mr Smith’s Judicial Review bid was “not simply to challenge any alleged administrative deficiency”.

He added: “I note that the applicant submits, but does not aver, that there exists no adequate alternative remedy. Notwithstanding the applicant’s assertion of inadequacy, section 159 of the Companies Act coupled with Section 280 allows the applicant to apply to the court for an order against a company to restrain any action that is oppressive or unfairly oppressive, or that unfairly disregards its interest as a shareholder.”

Mr Sears also claimed that SeSaChe Ltd’s standing to bring Judicial Review proceedings was “doubtful”, given that the majority of ICD Utilities minority shareholders had voted in favour of accepting Emera’s offer.

Mr Smith, though, questioned why a government that campaigned “on transparency and accountability” should “attempt to hide in a case that is so high profile in regard to Bahamian ownership in the energy sector in the Bahamas”.

He also dismissed the notion that the Judicial Review action was ‘null and void’, given that Emera had already completed the buy-out and ICD Utilities was now de-listed from BISX.

“This is a financial matter and, as I have always said, I can be offered shares directly in GB Power as opposed to being forced to own shares in Emera in Canada,” Mr Smith told Tribune Business.

“This action has traction, and the court can provide appropriate remedies to SeSaChe and hundreds of other persons that fall into the same category: All those same shareholders that do not wish to sell their shares and become owners of shares on the Canadian stock exchange, and do not want to be divested of their ownership in GB Power.”

The basis of Mr Smith’s Judicial Review is that the Bahamas Investment Authority (BIA) and Central Bank approvals granted to Emera are “ultra vires, irrational and procedurally unfair”.’

He is also arguing that since the BIA is not created by law it has “no authority over the personal shares owned by Bahamian citizens”, and thus had “no power” to approve Emera’s purchase of SeSaChe’s shares.

Mr Smith last night again hinted that no Judicial Review proceedings would have been brought if Emera had allowed minority Bahamian investors to hold shares directly in GB Power, bypassing ICD Utilities in the former corporate structure.

“Just like many Bahamians currently owning preference shares in GB Power directly, an outcome in this case would be to quash the permits granted, which will allow a reversal of the transaction and, hopefully, then Emera and the Government will see the wisdom of offering the option of direct ownership than continuing to litigate,” he told Tribune Business.

“This case is really an attempt by a Bahamian shareholder not to be compulsorily divested of its shares.”

Mr Smith then hit out at the Government for seeking to block his action, adding: “What does the Government have to hide? What’s all the secrecy about? Why are they resisting producing the permits?

“This is government by secrecy, not free enterprise, free trade, transparency and above-board business. This is exactly the kind of behaviour that causes investors from abroad and Bahamians to flee from investing in the Bahamian economy.”

Calling on the Minnis administration to allow SeSaChe to “have its day in court”, Mr Smith said: “Judicial Review is supposed to be about quick access to the court for adjudication of public law rights and good governance. They’re hiding. What are they hiding?”