By McPherse Thompson, Assistant Financial News Editor
Johnston and Orane
THE KINGSTON Port Workers Superannuation Fund has appointed four new trustees ahead of next Tuesday's extraordinary general meeting of Kingston Wharves, which will consider the removal of the current Grace, Kennedy & Company controlled board.
At the same time, Kris Astaphan, deputy chairman of the National Commercial Bank (NCB), and Ravi Rambarran, chief financial controller of Life of Jamaica (LoJ), who were among those persons originally proposed to replace members of the existing Kingston Wharves board, have been removed from the list of prospective directors.
The extraordinary general meeting has been requested by three shareholders of Kingston Wharves - The Shipping Association of Jamaica Property, Maritime and Transport Services, and Transocean Shipping - to remove eight of the current board members of Kingston Wharves and replacing them with eight others. The three shareholders had also proposed to appoint one additional director.
However, according to correspondence obtained by the Financial Gleaner, Lance Hylton, the attorney representing the shareholders who have requested the meeting, wrote the registrar of Kingston Wharves last Friday, naming seven directors who will be up for election to replace existing board members.
Contacted, Mr. Hylton said both Mr. Astaphan and Mr. Rambarran would be unavailable to take up positions on the anticipated newly reconstituted board of Kingston Wharves at this time, but they are expected to join at a later date.
On Monday, four of the trustees of the Port Workers Superannuation Fund resigned against the background of an objection by the current Kingston Wharves board to them voting the shares held by the pension scheme in Kingston Wharves at the upcoming meeting because of conflicts of interest. That conflict of interest, the board contends, arose from some of the trustees' current involvement in litigation with Kingston Wharves.
The trustees resigning were: Roger Hinds, who owns Transocean Shipping; Hylton Clarke of Maritime and Transport; Grantley Stephenson, a director of Jamaica Fruit and Shipping Company, and Charles Johnston, chairman of the board of the Superannuation Fund. Mr. Hinds, Mr. Stephenson and Mr. Johnston are also being proposed as directors for the new Kingston Wharves board, in addition Mr. Clarke's son, Kim.
Douglas Orane, chairman and chief executive officer of Grace, Kennedy, which manages Kingston Wharves, had told the men that their positions as trustees of the pension scheme conflicted with those of the shareholder companies seeking to remove the existing Kingston Wharves board. As such, he would seek to block them from voting the shares held by the Superannuation Fund in Kingston Wharves.
By Tuesday, the Shipping Association of Jamaica (SAJ), which regulates the Port Workers Superannuation Fund, appointed four new trustees: Stephen Bell, managing director of LSK & Co.; Paula Pinnock, managing director, Port Contractors Ltd.; Warren Sweeney, client services manager of APM Terminals, and James Worten, all of whom are members of the SAJ.
The SAJ, in a release, said the new appointees were not involved in litigation with Kingston Wharves and, as such, could be declared "independent employers" with an interest in the shipping industry.
The three shareholders seeking to remove the Kingston Wharves board have formed themselves into a consortium which controls about 49 per cent of the shares in the company. The 49 per cent includes 15.7 per cent which is held by the Port Workers Superannuation Fund, and another 15 per cent by the SAJ. On the other hand, Grace, Kennedy controls 43 per cent.
At a press conference in downtown Kingston on Tuesday, Mr. Orane, who is among the directors being proposed for removal from Kingston Wharves' board, said there was still a conflict of interest in that Harry Maragh, who has also been proposed as a director of the new board, continued to be a trustee of the Port Workers Superannuation Fund.
Mr. Orane said that two weeks ago, Grace, Kennedy entered into negotiations with the consortium, during which it was suggested that the parties should agree to a 90-day "cooling off" period where they would put all the issues on hold, including seeking an adjournment to an action brought by three stevedoring companies in the Supreme Court against Grace, Kennedy. The stevedores brought the action after Grace determined they would no longer be allowed to provide stevedoring services at Kingston Wharves.
Mr. Johnston, whose company, Shipping Services Stevedoring is among those involved in the case against Grace, Kennedy, said they felt it necessary to have the matter resolved in the court.
On January 27, before the negotiation began, Grace, Kennedy had written the SAJ, which represents several Grace-owned companies, asking for an assurance that it would remain objective and not vote its 15 per cent shares in Kingston Wharves for or against any of its members at the extraordinary general meeting. Grace, Kennedy had also warned that if the SAJ failed to give that assurance it would seek injunctive relief. That was among the issues placed on hold to allow the negotiation to take place.
However, on Wednesday, Mr. Orane told the Financial Gleaner that the parties having failed to reach an agreement, Grace, Kennedy had no choice but to seek an injunction before the end of this week, barring the Shipping Association from voting its shares at the upcoming meeting.
He said some of the trustees of the Port Workers Superannuation Fund would also be seeking an injunction, by the end of this week, to bar the trustees from voting the 15.7 per cent of shares held by the pension scheme in Kingston Wharves.
Mr. Orane also questioned the rationale for investing as much as 28 per cent of the pension fund in Kingston Wharves alone, saying that was "way above what anyone acting prudently would do."
He said Grace, Kennedy was confident of success at the extraordinary general meeting "because the Kingston Port Workers Superannuation Fund has taken the decision that the Fund should not be voted at the meeting." He was also confident that injunctive relief would be successful against the Shipping Association.
The net effect of the grant of an injunction would be that the consortium's 49 per cent majority would be reduced to 34 per cent if the pension scheme shares are not voted, and to 19 per cent if the Shipping Association follow suit.
