The Guyana Securities Council has filed legal action against Managing Director of Caribbean Container Inc (CCI) Ronald Webster seeking to cancel the transfer of shares of CCI to another company controlled by Webster who is also the chairman of the Private Sector Commission (PSC).
“The claim seeks to set aside, among other things, the transfer of shares in Caribbean Container Inc to Demerara Holdings Inc and any benefits which may have flowed therefrom,” the Guyana Association of Securities Companies and Intermediaries Inc. (GASCI) said in a brief advisory on its website. Apart from CCI, the GASCI lists Demerara Holdings Inc and Tech-nology Investments and Management Inc as companies managed by Webster.
Last year, accountant Christopher Ram had questioned how the shareholding of CCI ended up in companies
owned and controlled by Webster, a longstanding director of CCI. “The common law and the Companies Act have strict rules and sanctions regulating gains from one’s office as a director,” Ram had stated.
“This company is headed by the Chairman of the Private Sector Commission and it would be inappropriate and dangerous for market confidence if a company headed by such a prominent person does not seek to clear its name in the most open and transparent manner. The Securities Council must move quickly to have this addressed under section 506 of the Companies Act,” Ram had written.
He had also expressed several other concerns.
In response, CCI had said that where a breach of fiduciary duties is concerned, one must usually be in a position where his personal interest conflicts with the interest of the company to which he owes a fiduciary duty.
“In our estimation, no such conflict existed, this was also the sentiments of learned counsel who in 2006, prior to the conclusion of the transaction, prepared and issued an opinion that the transaction did not constitute a breach of fiduciary duties. This opinion was shared with the Securities Council in 2006 before the transaction was finalised, and full disclosure was made to the shareholders of CCI in the 2006 Annual Report,” the company had said in a statement which also questioned what conflict of interest Ram was alluding to.
“CCI, its employees, and its shareholders have not suffered a detriment as a result of the change in majority ownership, in fact – the actions of Ronald Webster, Colin Wiltshire and Patricia Bacchus have culminated in the write-off of a very large debt, the avoidance of foreclosure and consequently – continued employment for 140 employees of CCI and a gain to shareholders; both in terms of the increase in the traded value of their CCI shares over the past seven years, the bonus shares awarded to them last year (where TIMI decided not to take up its bonus shares so as to allow the benefit to accrue solely to the minority shareholders), and not forgetting the dividend recently declared and paid – the first such payment in over 20 years,” the company had said.
“The question remains to be asked, if there were concerns over the legality of the transaction, which was fully disclosed to the regulators as well as to shareholders, why hadn’t Mr Ram – both as shareholder of CCI as well as a financial analyst for the Securities Council, ever raised the issue before, instead of now seven years after the event,” the statement had said, while adding that legal advice was being sought.