The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

ArawakX’s chairman dismissed the company’s largest investor as someone who “can’t use a computer” and was “over his head on Fintech” after he turned whistleblower over its financial, governance and regulatory concerns.

D’Arcy Rahming senior, also the crowd-funding platform’s chief executive, told Securities Commission executives during an April 12, 2023, interview that James Campbell was “a businessman from a different era” after their battle for control resulted in Bank of The Bahamas freezing all ArawakX’s bank accounts.

The meeting, led by Christina Rolle, the regulator’s executive director, produced the disclosure that Mr Campbell had provided MDollaz, which traded as ArawakX, with nearly $1.6m in total financing. This was broken down into a $1.3m “option” which, if exercised, would give the former Colina Insurance Company president a 22 percent equity stake in the platform plus a further loan for $279,000.

Based on the $1.9m raised from outside investors, as noted in ArawakX’s draft financial statements for the year to end-July 2022, Mr Campbell’s $1.3m option accounted for 68.4 percent - or more than two-thirds - of the new equity capital that the platform was hoping to obtain Securities Commission approval for.

Mr Rahming, who labelled the relationship with Mr Campbell as “kaput” by that stage, also alleged that the former insurance executive must have “just flipped” to go to the Securities Commission with his concerns and suggested he was “driven crazy” by the paperwork required to become ArawakX’s chairman.

The Securities Commission’s bid to wind-up ArawakX, launched last week, on the basis of an alleged $2.4m solvency deficiency plus “governance irregularities, regulatory breaches and possible criminal infractions” suggests the capital markets regulator’s subsequent investigation found sufficient evidence to back Mr Campbell’s concerns.

Meanwhile, other documents viewed by Tribune Business reveal that ArawakX contacted all of Prime Minister Philip Davis KC; Michael Halkitis, minister of economic affairs; and Central Bank governor, John Rolle, in early November 2022 in an attempt to pressure Bank of The Bahamas to unfreeze its accounts.

The BISX-listed institution had blocked access to the crowd-funding platform’s accounts from October 31, 2022, due to uncertainty over whether Mr Rahming and his son, D’Arcy junior, or Mr Campbell were the proper control persons. This prompted Mr Rahming senior to write to both the Prime Minister and Mr Halkitis, given that Bank of The Bahamas is majority government-owned, via an e-mail headlined: ‘Urgent: Injustice in financial markets to small investors’.

“Please find attached a letter regarding a grave injustice being done to investors in the country by the Bank of The Bahamas that needs your urgent intervention,” Mr Rahming wrote to Mr Davis and Mr Halkitis.

Then-Bank of The Bahamas managing director, Kenrick Brathwaite, was left distinctly unimpressed. “It is unfortunate that you have chosen to communicate in this manner considering that you are fully aware of the total circumstances which have caused this bank to place a freeze on your account,” he told Mr Rahming in a November 2, 2022, e-mail.

“The situation that caused this ongoing apparent conflict within the company is as a result of decisions made by the principals and may result in unnecessary exposure to Bank of The Bahamas. Incidentally, the captioned referring to any injustice appears a bit disingenuous when we consider the cause of this conflict and the fact that our duty is to mitigate any possible exposure as a result of this ongoing internal conflict.”

That ‘conflict’ was seemingly the battle between Mr Campbell and the Rahmings. When questioned by Ms Rolle at the April 12 interview as to why he wrote to the Prime Minister, Mr Rahming replied: “That they would understand that this was good for the country. We had major markets...”

The Securities Commission chief then asked if Mr Davis was contacted on the basis that Bank of The Bahamas is a government-owned bank, to which Mr Rahming responded: “Exactly. So that’s the capacity of.. ‘Please can you address this issue’. These are client funds. People are trying to invest. That was the passion behind this.”

Earlier in the same interview, confirming that the relationship with Mr Campbell had completely broken down after the latter approached the Securities Commission, the ArawakX chief sought to discredit the former Colina Insurance president by asserting: “Mr Campbell is a businessman from a different era.”

When asked what he meant by Ms Rolle, Mr Rahming replied: “What I mean is that this is a Fintech (financial technology) era. He can’t use a computer, so he doesn’t understand the fundamentals of business. I didn’t realise that. We were friends, and I didn’t really realise that. So maybe some of the explanations in terms of how Fintech developed was over his head, in my opinion.”

Mr Rahming alleged that Mr Campbell’s concerns may have originated from the fact ArawakX’s initial financial projections were not met, as the crowd-funding market took time to develop, with their relationship deteriorating over efforts to develop a savings bond product for the Government.

“Then he began to put on some ridiculous demands. Saying ‘Oh, I need to see this report. I need to see that report. I need to be able to see that report’. So the relationship grew contentious because I don’t work with Jimmy. Jimmy is just an investor.... He was supposed to.. the idea was that he is supposed to open up his network to us so that we could...” Mr Rahming asserted.

“We were trying to get things done properly at this point to get him to actually come on board properly to be a chairman. You will see from our notes and stuff, we even set up an appointment with him. He was supposed to come in. I don’t know if the paperwork drove him crazy or what. But he just flipped and so he came here [to the Securities Commission].... So at this point, the relationship is kaput.”

Hillary Deveaux, one of Ms Rolle’s predecessors as Securities Commission executive director, was on Mdollaz/ArawakX’s Board but he resigned on December 9, 2022, to become a whistleblower. Together with Mr Campbell and Felix Stubbs, the former IBM Bahamas chief, he met with the regulator on October 11, 2022, to voice concerns about the platform’s operations and corporate governance structure.

“Mr Campbell, in particular, who is a silent investor in the company and invested roughly $1.2m, expressed deep concerns about the direction and operations of the company,” the Securities Commission’s winding-up petition alleged.

The former Colina chief asserted “that since operations began the company had been cash strapped, and that roughly $1.5m received from investors had been spent as only one out of the six crowdfund offerings that was listed on the platform had met its minimum ask”.

It was also claimed that ArawakX staff “had not been paid for several months”, while $40,000 “was moved from the fiduciary account to the operating account” - suggesting that client/investor monies were used to finance the platform’s operating expenses. When this was brought to Mr Rahming senior’s attention, he allegedly described this as “an error”.

Mr Campbell also alleged that senior ArawakX executives were travelling and spending lavishly to promote the business, which he argued was not wise given the company’s financial position. The Securities Commission, meanwhile, noted that the former Colina chief’s appointment to ArawakX’s Board on January 10, 2022, was a breach of the Securities Industry Act because it had not received prior approval from the regulator.