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Turnaround expert banks on new ventures

Published:Friday | February 26, 2010 | 12:00 AM
Aubyn Hill - File



Huntley Medley, Contributing Editor - Business


Aubyn Hill mixes private business with state job

Aubyn Hill
has known banking and management all his life. Now Hill, a turnaround artist of sorts for bad businesses around the globe, even while applying his professional passion to a few choice ventures of his own, has been helping the Jamaican Government chuck underperforming sugar assets for a fee. He has, at the same time, just landed a $7.5 million-a-year job as the chief executive of the state sugar-holding company while earning a commission on the sale price of sugar entities he manages to sell.

"I have always loved economics and finance," Hill told the
Financial Gleaner
in an interview conducted before the announcement of his latest job undertaking this week by Agriculture Minister Christopher Tufton.

"I find that it tells you how the world works. If you follow the money trail, you never get lost," he noted.

The self-styled country boy from Southfield, St Elizabeth, armed with a Munro College education, marketing, economics and business administration degrees from the University of Miami, and a trademark Harvard MBA, has worked on Wall Street, in Rome, India, Sri Lanka, Bahrain, Saudi Arabia, Kuwait, Oman and ran National Commercial Bank (NCB) in Jamaica for two years.

As head of the consulting firm, Corporate Strategies, he now gives business development advice to a range of clients, including the Government. It is not clear how Hill's new full-time assignment will affect his private businesses. But controversy was stirred last year with the publicising of his reported $1.9 million-per-month remuneration package for his role as lead negotiator for the divestment of the state's sugar factories and lands. And only this week the Government announced his new 9-5 job, immediately prompting the parlia-mentary Opposition to raise concerns about a possible conflict of interest.

"With more than 30 years working in the financial and merchandise trading sectors in many countries, in 2004, after leaving NCB (National Commercial Bank), I decided it would be time to help companies which needed assistance in establishing or adjusting their business models, medium- and long-term strategies and finding debt and equity funding to assist these businesses," he explained.

But while his five-staff consulting business is familiar territory after 15 years as a CEO, his investments in micro finance, renewable energy and farming do not constitute his usual corporate stomping grounds. Hill is chairman and one of 15 shareholders in NationGrowth MicroFinance Limited, chairman of Innovative Renewable Energy and Electronics (IREE) Solar, and is knee deep in vegetable farming in his native St Elizabeth through his Saltfield Producers.

NationGrowth MicroFinance, he noted, has collaborated with the Ministry of Agriculture and the Rural Agricultural Development Authority to help many small farmers access money for their operations.

"We have put a product together that allows us to not always demand collateral because many small farmers can't (find collateral) but they have 20 years of experience and they know what to do, so we finance that," said Hill.

Entrepreneurial pursuits

NationGrowth has been capitalised with a private equity base of J$221 million.

Hill said he is driven by entrepreneurial pursuits that make a sound national contribution while possessing the potential to be profitable. In the case of IREE Solar, he pointed out, Jamaica's more than $2 billion-a-year oil bill was a strong motivator. He develops and sells solar water heaters which do not use solar panels but rather, evacuated tubes, which are said to be more efficient and can heat water even when there is little sunshine.

Hill is serial board member serving at Jamaica Broilers Group; Michael Lee Chin's Advantage General Insurance; the University Council of the University of the West Indies, where he chairs the audit committee for all territories; and was up, to recently, chairman of the now wound-up US-based debt-collecting company, Tympana.

After Harvard, he worked with American Express bank, which placed him in plump postings in some five countries, where he fixed broken banks and other aspects of American Express' business as a professional under-30-year-old, along the way learning credit, he said, from a very capable but quite cantankerous Irish man.

Aubyn Hill has been around the block, so to speak, where jobs are concerned.

"You know when to call it quits and there must be no job you have (which) you cannot leave. Otherwise, you become very close to (being) a slave."

His professional life has been intertwined with economic and political world events, like being driven out of Kuwait by Saddam Hussein's invading army in August 1990 after having gone there to help fix a bank that was involved in the stock market meltdown of 1982, which is said to have wiped US$93 billion off equity investments. After Kuwait, Hill journeyed to another Gulf state, Oman, to run a trading company, but was soon called in to rescue and fix another bad bank, the National Bank of Oman, which he ran for 11 years before trekking back to his homeland.

He recalled that it was while on vacation in Canada in July 2002 that a friend introduced him to Michael Lee Chin, who asked him to lead the management team for NCB, the then troubled bank the Canada-based billionaire had just bought off the Jamaican Government's auction block following the financial meltdown here.

"In two years, we moved it (NCB) from a profit of $317 million to something like about $3.2 billion, and, of course, the stock price moved from about $5.60 to a high of $31.70 in six months," Hill recalled.

Turning around businesses, he maintained, takes special character.

"You can't be deterred by difficulty if you are going to be a turnaround artist and you also have to have a very thick skin."

Hill said he left NCB in November 2004 after major disagreements with 'one particular important director' who, he contended, had serious difficulties with the CEO's approach.

"I do not believe in an executive chairmanship and I believe that for good corporate governance, there must be a clear distinction between the board and the management."

Board interference

There are particular regulatory sensitivities that are at risk of being sacrificed if board interference in day-to-day management of a bank is allowed, Hills said.

"A bank (operates in) a regulated industry. Anytime there is a problem in a bank, there are two people that the regulators and police go for - the group managing director or managing director and the chief financial officer. I happened to have been the group managing director, therefore nobody was going to make decisions that could put me in jail or have me in conflict with the regulation."

Since NCB, Hill has done consultancy work for Lee Chin's AIC financial group in Trinidad and stills serves on the board of Advantage General, the insurance company, formerly United General, which the billionaire bought several years ago.

Having led the sale of some government sugar assets, Hill said, without pay up to August 2008, the career banker said he has no timetable for successfully wrapping up the assignment. But for him, the project has reinforced one critical lesson along the way.

"Government should not own businesses because it can't manage them really well. The resources are not there on time, especially (for) a government that is struggling to meet its fiscal targets."

For him, good managers in government-owned businesses are the exception. On the matter of sentimental ties that often bind a country to keeping failing state enterprises, Hill is clear.

"We have an emotional tie with Air Jamaica and sugar, but emotions alone cannot run a business."

The assets now being sold, he suggested, were difficult sells even in good times, because they were not cared and kept in good condition, a situation, he believes, that would only worsen should they be kept on the State's books.

huntley.medley@gleanerjm.com