The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Disgruntled Bank of the Bahamas shareholders are complaining their demands for sweeping Board and management changes have been met with complete indifference, with Thursday’s annual general meeting (AGM) doing little to inspire confidence in an immediate financial turnaround.

Several minority investors who attended also slammed the BISX-listed institution for what they termed a lack of transparency, arguing that it failed to provide concrete, definitive replies to a barrage of questions from concerned shareholders.

They also expressed disbelief that no one, at either Board or senior management levels, appeared to have been held accountable after a record $69 million net loss forced the Government to rescue Bank of the Bahamas with a $100 million ‘bail out’.

However, their ‘lack of transparency’ complaints were totally rejected by Bank of the Bahamas managing director Paul McWeeney, who told Tribune Business: “That’s just not the case at all.”

Mr McWeeney, who seemed to have been at a different meeting than some of his unhappy minority investors, said he personally stayed behind to speak to every shareholder who was there, and answer any questions they had.

“We were open and transparent with everything we are doing,” he told this newspaper.

That, though, is unlikely to pass muster with some of the aggrieved shareholders and AGM attendees spoken to by Tribune Business, who remain concerned for their investment and its future prospects.

The AGM saw a ‘revolt’ by around 20 minority shareholders (see other article on Page 1B), who voted against the Board of Directors’ nominees and their compensation for the financial year to end-June 2015.

Daron Cash, the former Free National Movement (FNM) chairman and one of Bank of the Bahamas’ biggest critics, told Tribune Business that free-ranging discussion of Bank of the Bahamas’ plight was effectively ‘shut down’ from the start by chairman Richard Demeritte.

Mr Cash, whose home was searched and electronic devices seized during an inconclusive police inquiry into data leaks from Bank of the Bahamas, said Mr Demeritte quickly made it clear that discussion would be “limited” during the formal AGM proceedings.

Tribune Business understands that shareholders were limited to just one question, and a follow-up, during the question and answer (Q&A) period, with “discussions of substance being off the record after the meeting”.

“I went there with fairly low expectations of what to expect, especially in the area of presentation of information,” Mr Cash told Tribune Business. “I wanted to see for myself what level of reporting the chairman and senior management would deliver.

“It was, in my view, a third-class demonstration of arrogance and stonewalling... They lived true to form in terms of low expectations.”

He added: “The chairman and managing director’s presentations lacked substance, and there was no meaningful explanation of what went wrong and how they’re going to turn it around.

“There was no meaningful information to inspire confidence in the shareholders that this new strategy of consumer loans would pan out. There was just a continuation of lack of information.

“The managing director [Mr McWeeney] made an effort to explain away some of the bad decisions made. Nothing meaningful came out other than the clear implication or indication that they are planning on finding a new managing director at some point.”

Mr Cash, though, said no details were given on the timelines or process for finding a successor to Mr McWeeney.

And he questioned why it was necessary for Bank of the Bahamas to have a potential new chief operating officer on board when the present incumbent, Wayde Christie, was still in the seat.

“There is nothing that will inspire confidence that the road map ahead is very detailed,” Mr Cash told Tribune Business.

“There has been some discussion about a class action lawsuit. I think that ought to proceed, because it is clear from the AGM that the directors and senior management do not get it in terms of the lack of confidence the minority shareholders have in them.”

Mr Cash said the “way forward” for Bank of the Bahamas was new leadership at both the Board and management levels, and a complete overhaul of its governance processes.

His analysis of the AGM was backed by other minority shareholders who were present, including Mike Lightbourn, president of Coldwell Banker Lightbourn Realty.

“There was nothing transparent about what they presented to us at all,” Mr Lightbourn told Tribune Business. “It was a pathetic meeting, and there was no communication whatsoever. They should be ashamed of themselves.”

He compared Bank of the Bahamas’ efforts to be transparent to the Government’s disclosure, or lack of it, over the Renward Wells ‘Letter of Intent’ affair.

Tribune Business understands that Mr Lightbourn challenged Mr McWeeney over Bank of the Bahamas’ bad loans during the AGM, suggesting they were caused by poor lending decisions rather than falling collateral values.

Mr McWeeney, though, denied the ‘lack of transparency’ claims. “That’s not the case at all,” he told Tribune Business. “I don’t share that view.

“We were very open with everything, and told them exactly what we were doing on our future plans, and gave a broad outline on our cost savings initiatives.

“Some of the shareholders got up and stated their case. That’s fine. They have a right to do that. We respect that.,” he added.

“I stayed behind and spoke to almost everyone there. I can’t put words in people’s mouths, but we were open and transparent with everything we’re doing.”

Mr McWeeney continued: “There were some strong views raised, but that’s what an AGM is about. Everyone had a chance to say what they wanted.

“I didn’t run away from one question, not one. I answered every single one.”

Yet the hits kept on coming, Outspoken businessman Dionisio D’Aguilar, another Bank of the Bahamas shareholder, described the AGM as a “well choreographed meeting that took advantage of the fact they had a majority shareholder”.

The Government holds 51 per cent of ordinary shareholder voting rights, and 65 per cent of the equity, in Bank of the Bahamas, meaning that its position always will carry the day regardless of what the minority shareholders think - as happened on Thursday night.

Suggesting the meeting’s outcome showed that the bank was not interested in change, Mr D’Aguilar said: “It was a very painful meeting.

“What was immediately unacceptable was that management and the Board, while they gave the impression they wanted to be forthcoming, very little information was given out.”

Mr D’Aguilar also said it was “completely unacceptable” that there was no discussion of Bank of the Bahamas’ financial results for the past two years.