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BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 2013 • WEEK FOUR
1. The proposal was submitted by a
small group of minority shareholders com-
prising several prominent individuals and
organisations which includes Stephen
Espinet, Kamal Ali, Tatil Life Assurance Ltd,
Issa Nicholas Holdings, Nicholas Develop-
ment Ltd, Helen Bhagwansingh Ltd, Bourne
Investment Inc, Masa Investments Ltd, Bri-
mont Ltd, Alescon Readymix Ltd and Wilnet
2. The proposal seems somewhat ambi-
tious since, on the face of it, it s coming
from minority shareholders, who collectively
own only 5.68 per cent the company s shares.
Accordingly, if the proposal were to have
any chance of succeeding, it would require
the support of other larger shareholders,
possibly Republic Bank and/or Cemex.
3. The pre-emptive response of the
board along with, their rather tenuous
rational that "the proposal in the best judg-
ment of the directors is inimical to the com-
mercial interest of the company.
The above therefore beg the following
questions: What is the current board really
afraid of? Does this small, but well-
resourced group of shareholders have
some kind of guarantee or assurance that
their proposal would get the requisite
support at the AGM or have they taken
the above legal action, at significant
expense to themselves, just to prove a
Could we be witnessing something sim-
ilar to what happened in 2002 but this
time with the key protagonist having the
benefit of hindsight?
One would recall that in 2002, Cemex,
which at the time owned 20 per cent of
the shares of TCL, made a takeover bid
to acquire 100 per cent of the cement
company s issued share capital.
However, according to the by-laws of
TCL no single shareholder can hold more
than 20 per cent of its shares.
Accordingly, for the bid to have any
chance of success, it first required a 75
per cent special-majority shareholder vote
in the affirmative to remove the existing
ceiling on individual share-ownership.
One would also recall that a corporate
dogfight ensued which eventually came
down to a shareholders meeting to amend
the by-laws to allow a shareholder to be
able to own more than 20 per cent of the
However, when the dust cleared the
votes fell just short of the 75 per cent that was
required to remove the restriction and the rest is
I have always found the positions of the various
stakeholders at the time very interesting.
The then Government took a hands-off
approach, arguing that the company was not of
critical strategic importance to the country and,
therefore, it was not necessary for any regulatory
The Jamaica and Barbados governments were
concerned about the impact on employment that
the acquisition may have had.
The TCL directors (many of whom are still on
the board) mounted stiff opposition to the bid
except for one former director, who had significant
The management of the company was against
the takeover, obviously influenced by the likely
loss of their jobs, post- acquisition.
The workers were also against the acquisition
notwithstanding Cemex s commitment to maintain
the employment levels at all the plants.
Now let s fast forward to 2013, if you re Cemex
one thing is certain, you would not wish to repeat
the errors of the past.
In fact, you might be tempted to capitalise on
the mood of the long-suffering TCL shareholders,
who have not received a dividend since 2007 in
addition to experiencing a precipitous decline in
the price of their shares of more than 77 per cent
from a high of $10.25 in 2008 to $2.35 at pres-
You might also be wondering, if as a consequence
could those shareholders who voted against lifting
the 20 per cent restriction be now second-guessing
their earlier decision.
It seems to me that other thing that may cross
your corporate mind would be to devise a strategy
to gain majority control of the board, not necessarily
via the obvious, but confrontational route of req-
uisitioning an extraordinary shareholders meeting to
have perceived anti-Cemex directors removed but by
tacitly lending support to a slate of nominees proposed
by others with whom your interests may coincide.
In other words, could what appears to the casual
observer as a mere public spat between the TCL board
and a small group of shareholders, replete with "High
Court" and "Court of Appeals" drama, really be a pre-
cursor to the return, a decade later, of a wiser, more
experienced and meticulous Cemex ensuring that this
time all its "I"s are dotted and its "T"s are crossed.
I guess only time will tell.
Public spat or the return of Cemex?
Recently, I observed a notice
published on the T&T Stock
Exchange Web site
informing Trinidad Cement
Ltd (TCL) shareholders and
the public that the appeal filed by TCL
challenging the injunction granted by
Justice Harris on July 12 restraining
the holding of the annual general
meeting (AGM) was rescheduled from
October 9 to November 13.
Avid Business Guardian readers
would recall this matter arose some
four months ago when the nine-
member board of the financially-
troubled cement producer blocked a
duly submitted proposal to nominate
five new persons to serve as directors
from being presented to the company's
AGM for approval. I have no doubt, like
me, on learning of this development, a
few things must have immediately
stood out for you as follows:
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