The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of the Bahamas is aiming to hold annual general meetings (AGMs) for its 2013 and 2014 financial years simultaneously, as regulators yesterday pledged to address “gaps” and “grey areas” surrounding this issue.

Paul McWeeney, the BISX-listed financial institution’s managing director, told Tribune Business it was being advised by its attorneys over plans to hold the two AGMs “at the same time”.

And he also confirmed that the Government, the bank’s 65 per cent majority shareholder, had removed the main obstacle to holding an AGM by finally naming the Board of Director appointments.

Despite widespread expectation that the Government was going to extensively revamp Bank of the Bahamas’ Board, just two directors have been dropped from the group who served up until June 30, 2014.

Tribune Business understands that the two who the Christie administration has chosen not to re-appoint are attorneys Rawson McDonald, who was deputy chairman,. and Roger Minnis.

Mr McWeeney confirmed that “all but two” directors from the previous Board had been reappointed, although he did not name them. He also indicated that the National Insurance Board (NIB) chairmanship had changed, impacting Father James Moultrie’s seat.

“I’m trying my best to have the AGM for last year and this year held at the same time,” Mr McWeeney told Tribune Business. “We’re working with our attorneys to work out the best way for this to happen.”

Mr McWeeney added that Bank of the Bahamas would likely make a formal announcement on its AGMs next week.

He declined further comment, or to discuss Bank of the Bahamas’ results for the year to end-June 2014 - a period in which it is expected to have incurred heavy losses, given that shareholders had already sustained $9.88 million worth of red ink for the first nine months.

However, Mr McWeeney said Bank of the Bahamas’ results for its 2014 financial year would be released within the timeframe permitted by regulators.

BISX-listed companies have until 120 days, or four months, after year-end to release their annual financials. This means Bank of the Bahamas must issue its financial statements by next week Friday.

However, Bank of the Bahamas is now more than three months into its 2015 financial year, and has completed the first quarter, but has still to hold an AGM for its 2013 financial year that closed more than 15 months ago.

This does not fit with the requirement to maintain an ‘orderly market’, and ensuring shareholders and investors are equipped with all necessary information.

AGMs are an important formal event on the public company calendar that allow shareholders to quiz management/the Board about the performance of their investment, and Bank of the Bahamas investors have been denied this opportunity.

The 2013 AGM also deals with a crucial period, in which minority shareholder were diluted from a collective 49 per cent holding to just 35 per cent, after the Government - via NIB and the Treasury - took up 100 per cent of a ‘non-voting’ equity issue.

K P Turnquest, the Opposition finance spokesman, yesterday said of the delayed Bank of the Bahamas AGM: “It obviously does not conform with the Securities Commission’s requirements, and [the public] as an investor ought to be concerned.

“We would certainly expect the Securities Commission to do its job with respect to ensuring the AGM is held.... It is vitally important to a financial institution many Bahamians have invested in and hold deposits in.”

Bahamian regulators yesterday agreed that AGMs, and how long public companies could take to hold them post-financial year-end, was “a weak point” in both the law and regulations.

Hillary Deveaux, the Securities Commission’s executive director, told Tribune Business: “There’s really no provision in our legislation to deal with that right now. It is a weak point.”

He blamed the repeal of several sections of the Companies Act, which occurred when the Securities Act’s 1999 version was implemented, for creating “some challenges for us with respect to these AGMs”.

He suggested that stipulations on when AGMs should be held were removed from the Companies Act at this time.

However, in the case of Bank of the Bahamas, the Securities Commission chief said he understood a new Board had been appointed and that an AGM was “imminent”.

Mr Deveaux suggested that the Bahamas International Securities Exchange (BISX), to whom the Securities Commission had devolved much regulatory authority over its listed companies, was best placed to deal with the AGM issue.

Keith Davies, BISX’s chief executive, took the reverse approach to Mr Deveaux, though, suggesting that the matter be dealt with via statute law rather than BISX Rules.

He acknowledged that the exchange’s rules did not deal with when its listed companies must hold an AGM, only with the related materials and documents that must be issued to shareholders.

“This is something that we have looked at. We have looked at this issue,” Mr Davies told Tribune Business. “We will be speaking to the company [Bank of the Bahamas] to find out what it’s going to do.”

This newspaper understands that BISX may already have been in informal contact with Bank of the Bahamas over its 2013 AGM, and Mr Davies reiterated: “We are going to be speaking to them, and one of the things we’d like the company to do is advise shareholders of plans for the AGM.

“That is an event that we would want to find out what the company is going to be doing.”

Acknowledging that AGMs, and when they should be held, may be “a grey area”, Mr Davies said: “To the extent there are gaps, we want to close those gaps, so we can give shareholders the benefit of certainty as to when they will hear from their companies.

“That’s a definite. I know the Commission has looked at this issue, and I know they have some general guidance notes speaking to this.”

Mr Davies praised the co-operation between BISX and the Securities Commission, saying the two were “working hand in glove” to secure the Bahamian capital markets.