The facts on AAJ’s First Rock deals
The Gleaner has published eight news stories on the Airports Authority of Jamaica (AAJ) Group’s investment in First Rock Capital Holdings, which have been factually unchallenged.
Timeline of how the issues developed:
AAJ board appointed; William Shagoury named chairman. Membership included Fay Hutchinson, a sales executive and high-ranking member of Jamaica Labour Party. AAJ is a statutory body that falls under the Ministry of Transport and Mining.
Through a private placement, AAJ and subsidiary NMIA Airports Limited bought US$1m worth of shares in First Rock, a St Lucia-registered private-equity real-estate firm.
Fay Hutchinson purchased one million units.
New AAJ board appointed; Shagoury retained as chairman; Hutchinson named deputy.
AAJ/NMIA bought second set of First Rock shares (US$2m) through IPO. Investment totalled US$3m (J$443 million) for 28.52m shares split equally.
National Insurance Fund bought US$1.1 million worth of shares. Hutchinson’s son, Andre Hutchinson, sits on NIF’s board.
March 3, 2020
First Rock announced in Jamaica Stock Exchange filing that Hutchinson appointed to its board.
New AAJ board appointed; Hutchinson named chairperson. Three others from previous board reappointed: Epsi Cooper-Morgan; Pauline Bowla; Denton Campbell.
March 17, 2021
Hutchinson resigned from First Rock.
June 10, 2021
AAJ statement to Gleaner provided by AAJ President and CEO Audley Deidrick:
1. Investments approved by AAJ/NMIA boards and were “in accordance” with investment policy.
2. NMIAL board member declared interest, recused self from decision. AAJ said it was not “appropriate” to confirm whether the member was then board chairman Newlyn Seaton, whose brother, Y.P. Seaton, is a shareholder and founding director of First Rock.
3. Confirmed that Hutchinson did not declare interest in First Rock. On the directorship appointment, it said “this was not construed to present a conflict of interest”. No mention that Hutchinson is a First Rock shareholder. No mention she recused herself from discussions over 2020 investment.
June 10, 2021
Acting permanent secretary in transport ministry, Dr Janine Dawkins, said ministry “satisfied” no conflict of interest involved in transactions.
June 17, 2021
AAJ said current market value of US$3-million investment at share price of US$0.09 was US$2,566,620.
June 24, 2021
Questions sent to board chairman of First Rock Capital, Norman Reid. No response received to date.
June 25, 2021
Hutchinson answers Gleaner questions:
1. Said overlapping directorship did not pose a conflict of interest because “no personal benefit or interest was being derived”.
2. Asked what role she played in the AAJ’s decision to buy shares in First Rock, she said: “As a director of the AAJ’s board, the board made the decision.”
Ministry of Labour and Social Security said Hutchinson’s son declared his interest, recused himself from discussions over 2020 NIF investment.
June 27, 2021
Sunday Gleaner investigative report
June 29, 2021
Former AAJ board Chairman Dennis Morrison (2012-2016) said First Rock investment was not in line with the agency’s mandate; “non-core” expenditure.
Opposition Spokesman on Finance Julian Robinson tables questions in Parliament on the AAJ transaction for Finance Minister Dr Nigel Clarke to answer.
June 30, 2021
Former board Chairman William Shagoury, who presided over the investments, said he did not know that Hutchinson overlapped as a director of First Rock. Said situation was a “conflict of interest” he would not have tolerated.
July 21, 2021
A. Finance minister answers questions:
1. First AAJ/NMIA transaction broke the law (Public Bodies Management and Accountability Act). Finance ministry’s approval not sought as required for equity purchases in private companies not listed on Jamaica Stock Exchange. First Rock listed in February 2020.
2. AAJ policy mandates equity investments in “blue-chip” companies (recognised firms with performance record); AAJ/NMIA 2020 IPO purchase represented 9.97% of First Rock’s issued shares; entities became third and fourth largest shareholders.
3. Confirmed AAJ/NMIA trying to sell shares.
B. Opposition Spokesman Robinson asked what action the ministry planned to take against the AAJ for breaches. Clarke said the law has no penalty for violations. His ministry would issue reminders about the law.
C. Robinson asked about the Holness administration’s confidence in the board. Minister Clarke said Transport Minister Robert Montague should answer that question.
July 23, 2021
Request made for statement from the transport minister. No response to date.
July 24, 2021
Opposition Spokesman Robinson called for the sacking of the AAJ board because of “poor judgement” and breach of the law. Said Integrity Commission should investigate issue.
Anti-corruption advocate Carol Narcisse said the current board members connected with boards that made the decision should be fired, summoned before a parliamentary committee.
July 25, 2021
Opposition Leader Mark Golding said the AAJ board “must go” for the unlawful investment and that Hutchinson’s overlapping roles demonstrated a “clear conflict of interest”.
July 26, 2021
Bruce Golding, a former prime minister who chairs First Rock Global Barbados, said it would have been “proper” for Hutchinson to declare her interest in First Rock. Interview done July 1.
July 26, 2021
Opposition Spokesman on Transport Mikael Phillips called for the removal of Hutchinson because her lack of disclosure was “unforgivable and smacked of conflict of interest and an abuse of office for which she must take full responsibility”.
July 26, 2021
Prime Minister Andrew Holness said he was not fully briefed but his preliminary view was that the “issues raised are matters of grave concern to the Government”.
July 28, 2021
AAJ board meeting.