The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Free National Movement’s (FNM) former chairman will urge his party’s leadership to demand that the Government table a controversial report on Bank of the Bahamas in Parliament.

Darron Cash pledged that he would write to Dr Hubert Minnis and the party’s deputy leader, K Peter Turnquest, calling on them to lobby for release of the report by Canadian banking consultant, George Marlatte.

He was speaking to Tribune Business in the wake of a hostile reaction by Bank of the Bahamas chairman, Richard Demeritte, to the mere mention of Mr Marlatte’s name by a shareholder at Friday evening’s annual general meeting (AGM).

Mike Lightbourn, Coldwell Banker Lightbourn Realty’s president, sparked a vehement response from Mr Demeritte when he asked for a copy of Mr Marlatte’s report, and questioned why this had not been disclosed to the bank’s 3,000 minority shareholders.

“I know Mr Marlatte. I know who he is,” snapped Mr Demeritte in reply. “I know he came. I know he’s gone. He came to do a job. I wasn’t satisfied with it. He’s gone. No report was given to me as chairman.”

“No report was given to the Government?” asked Mr Lightbourn. “I can’t speak to that,” replied Mr Demeritte.

The latter’s sharp reaction to Mr Lightbourn’s question, and criticism of Mr Marlatte, provide evidence that strongly suggests there was a major clash/bust up with the Bank of the Bahamas chairman over the contents of the Canadian consultant’s report.

Mr Lightbourn later told Tribune Business he had been informed by other Bank of the Bahamas’ directors that the Board had never seen Mr Marlatte’s report and findings.

This strongly suggests that the Canadian, a former senior banker with Scotiabank and Royal Bank of Canada, was hired by the Government - as 65 per cent majority shareholder - not Bank of the Bahamas.

“He was caught off guard,” Mr Lightbourn said of Mr Demeritte’s response. “I understand it was a very damning report about the operations of the bank.

“His [Mr Marlatte’s instructions were to look at the state of the bank. I wanted to ask if the directors had seen the report, and one I asked later said, no, they hadn’t.

“I understand that he [Mr Demeritte] was so incensed with the contents of the report that he blew his top, and they had a big bust-up.”

Tribune Business understands that Mr Marlatte, a friend of James Smith, former minister of state for finance, was hired by the Ministry of Finance to examine Bank of the Bahamas’ affairs, and determine the way forward.

Mr Cash, meanwhile, expressed disappointment that Friday’s AGM had provided few specifics on how Bank of the Bahamas would turn around an operational and financial performance that had produced a more than $100 million collective net loss over its past three financial years.

Mr Cash, himself a Bank of the Bahamas shareholder, told Tribune Business that the bank’s directors and management had “provided nothing meaningful for investors to hang their hats on” when it came to the BISX-listed institution’s recovery.

He pointed out that virtually no mention had been made of McKinsey & Co, the worldwide management consultancy firm, which is the latest external advisor to have been parachuted in to Bank of the Bahamas.

“The one reason to come here today was the remote chance we were going to be provided with meaningful information based on the work done by McKinsey & Co on the restructuring and turnaround,” Mr Cash told Tribune Business.

“What is clear is that the Board has adopted the approach of the chairman, and that they are hostile to shareholders asking meaningful questions. They’re not interested in providing meaningful information in an open way about how the bank’s operations are to be turned around.

“The chairman [Mr Demeritte] wanted us to take him on confidence and his faith, but he hasn’t provided anything meaningful for investors to hang their hats on.”

Mr Demeritte had earlier given a stirring address to Bank of the Bahamas’ AGM, designed to boost shareholder morale and gain their support for the Board’s strategy.

But, while long on rhetoric, he gave few details and specifics on how the BISX-listed institution will return to sustainable growth and profitability, beyond implying that the revival will take between 18 months to two years. (see article on Page 3B).

Mr Demeritte dealt in generalities rather than specific details, and Mr Cash said this would do little to restore Bank of the Bahamas’ credibility, plus confidence in the among shareholders, depositors, borrowers and wider Bahamian society.

“There was no information specifically about what McKinsey has uncovered and is proposing,” the former FNM chairman said. “Then there is the unwillingness to provide any information about the Marlatte report that Mr Lightbourn raised.

“My intention is to write to the leader of the FNM and the shadow minister of finance, Mr Turnquest, to petition the Prime Minister to table that report in Parliament.”

Mr Cash also said it was “specious and misleading” for Mr Demeritte to assert that there was no political interference in Bank of the Bahamas’ affairs, either at the Board or management level.

He argued that the level of Government involvement had last week been exposed by Prime Minister Perry Christie, who had pledged in a media interview to “make sure the Board understood his views” on the bank prior to the AGM.

“What is clear is that there is political interference,” Mr Cash told Tribune Business. “They talk about the absence of government interference, but it is clear the bank is only surviving because of the Government’s direct engagement in propping it up through NIB deposits and other means.

“This assertion of no government interference is specious and misleading.”