The National Insurance Scheme holds 8% of the issued shares in Demerara Distillers Limited (DDL) while Secure International Finance Company Ltd owns 18.49%, a combined percentage of 26.49% of the company’s issued shares. My first-hand information is that both the NIS and Secure International have been trying for years to have a seat or two on DDL’s Board so that they can have a say in the strategic decisions of the board, exercise some control of the executive management and have access to the operations of the company.
I am advised that on every occasion their request has been rebuffed by one or both Mr Samaroo and Mr Persaud, one of whom, in the eternal tradition of the family property, is the current inheritor of the executive chairmanship of the company from the other. What makes this situation so strange is that, on paper at least, Messrs Persaud and Samaroo own only 0.27% of the shares in DDL. An examination of the shareholdings in DDL suggests that what one sees is not necessarily the effective or beneficial shareholding in the company. The relevant shareholdings as stated in the 2016 annual report of DDL are as follows:
The power of Messrs Persaud and Samaroo to reject the reported separate and joint representation by the NIS and Secure International is surprising but may be explained, partly at least, by who owns and controls the shares held in DDL by: a) foreign entities or trusts held in Nassau Bahamas and the Channel Islands; and b) the real owners of shares in TCGL identified by an account number whose address is given as Trust Company, or by entities located in the Channel Islands and The Bahamas. The evidence I have collected from the Commercial Registry is troubling and reinforces my concerns about the shameless wealth gap in this country, not only between employees and employers but between shareholders of a company and the company’s directors and officers.
The NIS and Secure International have a right to feel a sense of injustice at being left out of any say in a company in which they are by law and fact substantial shareholders. At the same time, however, they have no one to blame but themselves for not making full use of their rights under the Companies Act to seek some fair representation. While their requests have been dismissed as there is “no room” in the boardroom, others over whom control could be exercised have been brought in. The Act gives the NIS and Secure International each the right to make a proposal for consideration by the Annual General Meeting the nomination of a person or persons for election as a director, or to seek the appointment of an inspector to investigate the shareholdings in the company.
Additionally, the Registrar has the power under the Act to make inquiries into the ownership interest of companies and under a more recent amendment effected by the Anti-Money Laundering and Countering the Financing of Terrorism Act, the Registrar is also required to ascertain the beneficial ownership of companies.
For decades, corporate governance in our two most prominent public companies has been defined by the personalities and interests of their top executives. They have done everything to frustrate the Securities Council and not unusually, any requests from the Securities Council are met with lawyers’ letters. That era must now be brought to an end and whether in the context of procurement, share transactions or directors’ emoluments, disclosure and accountability must be the watchword for those who have ruled as if the companies which employ them are their private property.