The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Minority Bank of the Bahamas (BOB) shareholders yesterday called for tomorrow's annual general meeting (AGM) to be delayed, after failing to receive the traditional agenda and other key disclosures.

Several investors complained to Tribune Business they have yet to receive the information publicly-traded companies are mandated to provide shareholders as part of their listing obligations.

Both Mike Lightbourn, Coldwell Banker Lightbourn Realty's president, and Dr Johnathan Rodgers, the 'eye doctor', confirmed to this newspaper that they had yet to receive BOB's AGM mailings, which are supposed to contain the BISX-listed institution's 2016 annual report; meeting agenda; minutes of the previous year's AGM and proxy voting form.

"I told two or three people with access to the top that they should postpone the meeting, or at least tell us where we can get the material and set a new date," Mr Lightbourn told Tribune Business. "I shall see what happens."

Dr Rodgers, when contacted by this newspaper, added: "No, I haven't received anything myself. I'm a little bit surprised nothing has gone out. I guess the guys are trying to get organised."

Keith Davies, the Bahamas International Securities Exchange's (BISX) chief executive, told Tribune Business that its listed equities were required to mail out their AGM materials 21 days in advance of the meeting being held.

He acknowledged, though, that there was "a fine" distinction between the company mailing out its materials and the Post Office's ability to deliver them on time.

Implying that the Post Office's recent woes may have impacted mail deliveries, Mr Davies said BOB and other listed companies could not be held liable if they "delivered them to be issued" in accordance with the 21-day deadline but shareholders did not receive them.

"Companies are required to issue their AGM materials 21 clear days before meeting," the BISX chief executive said. "But there is a fine line here.

"The requirement is they are to be sent 21 clear days in advance. If I present it at the Post Office, and deliver it there 21 clear days in advance, I've met my burden."

Mr Davies added: "The problem here in this country is you deliver it there, and when people get it. People sometimes don't get it at all, or get it late.

"This is why we're trying to find alternative electronic means of getting it into people's hands. If the company delivers the materials to be issued, it's not the company's fault; they can't be held responsible."

A Tribune Business search of both BISX's and BOB's website failed to turn up the material for the AGM, which is due to be held tomorrow night at SuperClubs Breezes.

One investment banker, speaking on condition of anonymity, confirmed to this newspaper that his company had received the AGM materials, although these included just the financial statements for the year to end-June 30, 2016, as opposed to an annual report.

This, though, creates the opportunity for information arbitrage, where some BOB shareholders have access to information that others do not, thus creating the potential for disruption of an orderly market.

Meanwhile, looking ahead to tomorrow night, Mr Lightbourn expressed hope that BOB's Board and management will follow the lead established by the Minnis administration.

"I hope that first of all they do the same as the Government with its expenditure, and cut back on waste and paying each director $40,000 on average," he blasted.

"Tell us what you're going to do to turn things around, and stop hiding those political loans still in default. They haven't made any attempt to correct that, and are keeping it under cover."

Mr Lightbourn suggested that BOB may have to transfer more of its 'toxic' loan portfolio to bail-out vehicle, Bahamas Resolve.

Dr Rodgers, though, indicated that he was willing to give BOB's newly-appointed Board, led by chairman Wayne Aranha and deputy chairman, Anthony Allen, time to implement a strategy to turn the stricken institution around and return it to sustained profitability.

"Let's give them a shot. They're new," he told Tribune Business. "Let's hear what they have to say. I'll be interested to hear what they've got to say about one or two minority directors on the Board. They previously stated they would appoint one or two from the minority shareholder side."

K P Turnquest, deputy prime minister and minister of finance, previously confirmed to Tribune Business that the Government planned to pick up where the previous administration left off and appoint independent directors, representing the minority investors, to the Board.

Dr Rodgers, meanwhile, said the new Board had likely "not been in place long enough" to develop a complete BOB turnaround strategy, although the question was likely to be raised at the AGM.

"If it comes up, we'll have to see what they have to offer," he added. "It's a tough one, and will be a long, hard road, but with a new Board in place they'll be able to turn it around.

"We're all shareholders in this, and hopefully it will be sorted out. With the right people in place it stands a chance of being turned around."

Mr Turnquest previously pledged that "a comprehensive plan" to rescue Bank of the Bahamas will be unveiled at the AGM, the institution having "abandoned" its legal battle with the Central Bank.

He added that the stricken BISX-listed bank had also become "fully compliant" with the regulator's capital requirements, and emphasised that there would be "no political interference" in Board and management decision-making under this government.

The Deputy Prime Minister suggested that this had contributed significantly to the bank's nine-figure losses, and the potential systemic risk it continues to pose for the banking system and wider economy.

He promised that the new government's turnaround plan, for which he revealed no details, would restore shareholder and depositor confidence by returning Bank of the Bahamas to "sustainable profitability".

BOB's latest financials showed that its total comprehensive loss for the nine months to end-March 2017 jumped by 69 per cent year-over-year, growing from $6.707 million to $10.793 million. This was in addition to the $120 million-plus in 'red ink' racked up over the previous three years.

A staggering 46.07 per cent, or $234.886 million out of a total $510 million loan portfolio, was non-performing at end-June 2016.