Avia Collinder, Business Reporter
Access Financial CEO and his lawyers have accused the company's board of breaching the company's articles and a Supreme Court order by appointing a co-chief executive in the ongoing fight to oust Marcus James.
The Jamaica Stock Exchange, meantime, is being buffered by the opposing parties and is attempting to play it safe by limiting the disclosures it publishes on what has evolved into a messy public fight between James, three other board directors, and Mayberry West Indies Limited.
On Wednesday, James told the Financial Gleaner that it was "business as usual" at the microfinancing firm that began operations in 2000.
Access Financial's company secretary, Gary Peart, said he had no comment on the developments.
"I don't want to be caught up," he said. "Our disclosures are pretty clear. They are on the stock exchange. We go from there."
In documents secured by the Financial Gleaner, James' lawyers have put the JSE on notice that another error like the inaccurate disclosure that claimed James and his company were at odds would not be tolerated.
JUDGE VARIES INJUNCTION
Last Friday, Justice Brian Sykes varied an order that previously froze any effort to remove James as CEO.
The judge ruled that defendants, directors Gary Peart, Chrisopher Berry, and Brian Goldson and Mayberry West Indies Limited, are permitted under Article 112, "to pass resolutions and make decisions" but that "such resolutions and decisions are not to remove" James as CEO of Access Financial and "neither vary, alter or modify" his salary or emoluments.
On the very next business day, Monday, April 14, the board of Access Financial voted to strip James of his management functions, and assigned a fellow director and current business development manager, Alexander Johnson, as co-CEO, alongside James, and gave him the responsibility of running the company.
That same day, James wrote to the board objecting to the vote and citing Article 112 of the Articles of Incorporation, which he said provides for one CEO and that it makes "no provision for the appointment of two CEOs or a co-CEO".
His lawyers also wrote to the stock exchange making the same point, but also charging that Access' board had breached Sykes' ruling on Friday, and charged that the appointment of a co-CEO was tantamount to the removal of James.
In that vein, they objected to the posting of a notice sent to the stock exchange on the appointment of the co-CEO.
"You will observe that notwithstanding the exercise of the directors' power in paragraph (a) of the defendant's draft, the learned judge made it clear that the claimant is not to be removed as CEO by the use of the words 'but such resolutions are not to remove the claimant as chief executive officer'. In other words, their paragraph (a) is consistent with our paragraph 2 and does not permit the appointment of a co-CEO, which effectively removes our client," Gibson Henlin wrote on April 15.
JSE asked for clarification from Peart and subsequently posted a notice saying Access board had removed all of James' management powers and disclosing Johnson's appointment.
The JSE also noted that the dispute continues.
On Wednesday, JSE General Manager Marlene Street Forrest said the stock exchange was duty-bound to publicly release market notices in line with market rules.
The matter is still set for hearing in the Supreme Court next week on April 23.
Access Financial's board comprises six directors, with the addition of Peter McConnell on April 7. The other directors are Brian Goldson as chairman, Marberry Investments CEO Gary Peart as company secretary, Mayberry's Christopher Berry, Alexander Johnson, and Marcus James.
Johnson was first appointed as a non-executive director back in October 2008, but became an executive director of the company in November 2012, meaning that he is both a board member as well as part of the management team.
James said it would be business as usual at his firm until next week's court hearing.
He says he expects a reversal of the board's decision to strip him of his functions as the court case proceeds.
"What has happened is the judge has made an order and there are two different interpretations of what that order means," he said.
"I think ... the stock exchange has gone ahead and made its own interpretation and has taken action accordingly," James commented.
"We have a court hearing on the 23rd and we will also be seeking to get a signed copy of the court order to see which interpretation is the correct interpretation and seek to procure action in accordance with what the court has ruled. Based on our interpretation, action is likely to be reversed."
James said he is still CEO and, therefore, still engaged in the running of the company.
"I am still CEO, so I still go to work but, for example, I will not be signing our first-quarter financials which are about to come out ... it's a co-CEO situation, so I am integrally involved in the day-to-day operations of the company."
Access Financial and Mayberry's partnership extends several years. Mayberry Investment was the broker of the microlender's offer to go public and is now a primary shareholder through Mayberry West Indies with a near-equal stake to James 40.95 per cent share.
The investment in Access has also been profitable for Mayberry, which has reaped large dividends from the junior company.
"Access Financial Services contributed a share of profit of $102.6 million to our overall performance .... we sold a small portion of our holding and generated a gain of $60 million, in addition we received approximately $108 million in dividends," Mayberry disclosed at yearend 2013 in a period when it made a loss.
"The market value of our current investment in Access has grown to $1.27 billion since our overall investment of $73 million to date," Mayberry said.