BOJ knew structure of Guardian deal, says NCB
National Commercial Bank Jamaica (NCB) said that its regulator, the Bank of Jamaica (BOJ), knew of the method it utilised to acquire a stake in Trinidad-based Guardian Holdings Limited (GHL).
NCB, the largest banking group in Jamaica, indicated that it paid $28 billion for the shares, but recently disclosed in its quarterly financials that it controls but does not own the company that holds the 29.99 per cent stake in GHL.
The bank later said its wider restructuring programme required of financial conglomerates constrained it from disclosing additional information.
"The fact that the restructuring is under regulatory consideration has constrained, and continues to constrain, our ability to give significant details, but the BOJ has been kept aware both of the structure of the GHL transaction and the reason for the structure," said NCB in a statement issued in the wake of Gleaner Business reports on the structure of the GHL acquisition and the bank's acknowledgment that it did not 'legally' own the shares.
"This transaction structure was outlined to and approved by BOJ and disclosed by way of release dated May 12, 2016," said NCB. The bank is managed by Patrick Hylton and chaired by Michael Lee Chin.
CONTROLLED BY LEE-CHIN
NCB made the acquisition through an entity described as its nominee and affiliate, NCB Financial Group Limited (NCBFG). That entity is owned by AIC Barbados, according to Companies Office of Jamaica records. AIC Barbados is controlled by Lee-Chin and is the vehicle chiefly used by the investor to hold majority stake in NCB.
NCB said NCBFG was created in April to eventually become the holding company for NCB and its subsidiaries.
The BOJ to which Gleaner Business reached out for comment said, legally, it could not comment on the individual entities it polices.
Last month, the central bank chose not to renew the contract of former banking regulator Gayon Hosin, saying her familial connections presented a conflict of interest resulting from the Guardian-NCB deal. Hosin's husband, Eric, manages Guardian Life Limited, a local subsidiary of GHL.
The Jamaica Stock Exchange and Financial Services Commission did not respond to queries on the NCB transaction.
In November 2015, NCB entered into agreement with the Lok Jack Family, the Ahamad Family and the International Finance Corporation to purchase a 29.99 per cent interest in Guardian Holdings Limited (GHL).
"At the time the agreement was signed, the structure of the transaction was not yet decided. However, the agreement always contemplated that NCB might appoint a nominee to purchase the GHL shares," said NCB in its statement issued Friday.
The bank said that at the time of the acquisition, the GHL shares were held directly by the Lok Jack family, the Ahamad family and IFC, but by companies fully owned by them and which only held the GHL shares.
"What NCB-FGL acquired therefore were the shares in those companies. As those are private companies, the transfers to NCB-FGL did not involve a transaction over the Trinidad and Tobago Stock Exchange," NCB said.