The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Property Fund’s administrator last night expressed hope that its trading suspension will be short-lived, having been blindsided by the stock exchange’s move.

Michael Anderson, pictured, RoyalFidelity Merchant Bank & Trust’s president, who only learned of the Bahamas International Securities Exchange’s (BISX) action when Tribune Business contacted him, said the publicly-traded company’s annual financial statements should be filed and disclosed today.

BISX announced late yesterday that had suspended trading in the real estate investment trust’s (REIT) stock with effect from this morning “until further notice”, due to the Property Fund’s failure to file its audited financial statements for the 2017 full-year and 2018 first quarter.

Keith Davies, BISX’s chief executive, told Tribune Business that the exchange had acted to preserve an orderly market because there was no up-to-date financial information to inform investors’ about the Property Fund’s actual, material financial health.

“It’s somewhat of a standard operating procedure,” he said of the trading suspension. “In order for a company to continue trading it needs to have adequate financial information in the public domain, and at this point the Property Fund is unable to do that despite receiving several extensions. Therefore we have to take action to ensure the integrity of the market.”

Mr Davies said BISX judged such issues “on the merits”, and a “case by case basis”, but emphasised the need for all listed, publicly-traded securities to provide timely disclosures of material information to the market to ensure investors can make informed decisions.

BISX-listed companies have to file their quarterly financial results within 90 days of each quarter ending, and their full-year results within 120 days of period end. The exchange, though, has frequently granted its listed entities extensions to these filing deadlines once the case is made.

Mr Anderson, who was in Barbados when contacted by Tribune Business, confirmed that the Property Fund had requested and obtained an extension until June 18 for the filing of its 2017 year-end financials.

The RoyalFidelity chief, who returned this week from a lengthy holiday, said he thought the audited statements would have been completed by that deadline only to return and find they were not.

He explained that the delay related to the valuations that had to be conducted on the Property Fund’s three commercial properties - the Bahamas Financial Centre in downtown Nassau; One Marina Drive on Paradise Island; and Providence House, the former PricewaterhouseCoopers (PwC) head office.

“We had extended the filing date formally until June 18,” Mr Anderson told Tribune Business. “We felt we would get the audit completed by the end of May. When I came back on Monday we were in the final stages of closing the financials. I signed them yesterday [Wednesday], and the directors approved them today [Thursday]. They’re going to be filed [today].”

That could mean the Property Fund’s trading suspension lasts for a day or less, with Mr Anderson conceding that the 2017 full-year audit “took a lot longer than anticipated” due to the number of personnel involved from its external auditor, PWC.

He added that another contributing factor was a change in past accounting treatment for common area maintenance (CAM) costs associated with vacant rental space, which required assessment and independent verification by PWC.

Still, Mr Anderson said he had been unaware of the trading suspension until Tribune Business called, adding: “I’m surprised they didn’t bother to tell me.”

In practical terms, the Property Fund’s suspension is unlikely to have a major impact on the Bahamian capital markets, given that it is among the most illiquid and thinly-traded stocks listed on BISX.