Access board to decide on future of legal matter
Avia Collinder, Business Reporter
The ding-dong battle between Access Financial Services chief executive officer Marcus James and board members appears to have come to an end with the sale by Mayberry Investments of its shares in the microfinance company to Proven Investments last week.
James told Sunday Business that the board of Access, slated to meet before Friday this week, will eventually decide what becomes of the ongoing court case between the company and former shareholders and directors representing Mayberry Investments Limited.
They will have to decide what happens to the court case from the Access side, he said. The matter is next slated for hearing in the Supreme Court on Thursday.
Mayberry Investments announced that it sold more than 100 million of its shares in Access at $9 per unit or just under $1 billion.
After an initial investment of J$38 million in 2006, Mayberry Investments said it would earn about J$955 million or US$8.34 million from the transaction.
With the purchase, Proven Investments acquired a 49 per cent stake in Access Financial, resulting in it becoming the single largest shareholder in the 14-year-old company, with Marcus James, founder, having the second largest shareholding.
On December 31, the Jamaica Stock Exchange announced that one of Access Financials directors, Gary Peart, resigned and that Christopher Williams, CEO of Proven, was appointed to sit on the board.
A further board revamp is on the cards, with the chair likely to be taken by someone selected from Proven Investments.
The last board makeover was in September when shareholders of Access voted for new faces amid the ongoing legal battle.
James position as CEO of Access Financial was in doubt for much of last year as the court battle ensued between himself and the Mayberry-connected directors on Access Financials board, namely chairman, Brian Goldson, Gary Peart and Christopher Berry, as well as the then second-largest shareholder, Mayberry West Indies Limited.
James turned to the courts in April 2014 to stop the Access Financial board from ousting him as CEO. Wrangling between the parties led at one stage to the board stripping James of his responsibilities as CEO, but not his title, and conferring those powers to another board member.
That board members appointment was rescinded when the matter was challenged in the court, but the Access board then conferred the powers of CEO on itself.
In July 2014, the Supreme Court granted an injunction restoring full powers to Marcus James as CEO of Access Financial.
The injunction also provided that James should not be harassed in any way by the directors of the company, and imposed a standstill agreement restricting the sale of shares until the matter is heard.
In a release on Friday, James said, This acquisition is a positive development for Access and I look forward to continuing to lead the team and to the establishment of a common vision for the organisation and for maximum returns to our shareholders.
The release said that Access Financial Services remained one of the leading microfinance institutions in the Caribbean, with its network of 16 branches in Jamaica.
I look forward to continuing to lead the team and to the establishment of a common vision for the organisation and for maximum returns to our shareholders, James said.
Williams was quoted as saying that the acquisition has afforded us a giant move into the microfinance industry and provides a perfect complement to our microlending entity, Asset Management Company Limited.
He added that Proven has bought into a profitable company which has shown exponential growth since inception in 2000. Access track record is remarkable and we look forward to the continued strong leadership of Marcus James as CEO.
In its third-quarter results for the period ended September 30, 2014, Access reported profit of J$94 million, 17 per cent more than the year prior. Revenues were up by $214 million to $793 million for the period, with interest income rising 34 per cent year over year to $721 million.
Return on equity improved by 52 per cent, compared to an eight per cent improvement for the similar period the year before, while earnings per share was 87 cents compared to 73 cents at September 2013.
Challenges mentioned in the report were outstanding receivables from loans made to government workers.