The Tribune

A BEC union leader yesterday said he had no concern over the integrity of its preferred management partner due to assurances given by the Government, telling Tribune Business: “It is what it is”.

  Documents obtained by Tribune Business show that the securities fraud claim against PowerSecure International, which is thought to have played a key role in delaying the Christie administration announcing the company as the preferred BEC bidder, revolves around the 62 per cent “plunge” in its share price that occurred on May 8 last year.

PowerSecure has dismissed allegations that it “misrepresented” its financial performance, and artificially inflated its stock price prior to the one-day wipe-out that erased $250 million in shareholder value. It has branded the claims as nothing more than “fraud by hindsight”.

Bahamas Electrical Workers Union (BEWU), head Paul Maynard, said: “The Government assured us that that was dealt with. They got opinions on it and it was fine.

“I don’t have a problem with it. It is what it is. They say that they got opinions from their lawyers in Washington, and they also got an opinion from the Attorney General of the US and the Secretary of Commerce.  What are we going to say?”

Tribune Business understands that PowerSecure is expected to present its BEC business plan to the Government this week.

While a reduction in staff at the corporation is expected, Mr Maynard said the exact number would not be known until this is revealed.

“Once they give a business plan we will know what they are talking about. The only concern I have is generation.  I would like to get the generation issue sorted out. It has to be done,” said Mr Maynard.

PowerSecure is petitioning the eastern district court in North Carolina to dismiss the class action securities fraud claim against it on the basis that it “fails to state a claim”.

Maguire Financial, the investor leading the ‘class action’ complaint, is alleging that PowerSecure and its top executives withheld material information that would have informed the market its financial performance was about to take a hit.

By allegedly touting strong financial results, Maguire Financial and other investors claim PowerSecure “artificially inflated” its share price starting in August 2013. They allege that this occurred “just in time” for PowerSecure to place a stock issue with investors, raising $34 million from the sale of 2.3 million shares.

And, at the same time, the Maguire Financial class is alleging that Sidney Hinton, PowerSecure’s chief executive and president, raised $3.2 million by selling 30 per cent of the shares he held in the company.