By McPherse Thompson, Assistant Financial News Editor
An areial view of Kingston Wharves, is a public wharf company that has been in operation since 1945 and has been managed by Grace, Kennedy since 1946. - File
THE BATTLE for boardroom control of Kingston Wharves will be decided by about 1,400 shareholders at an extraordinary general meeting at the Jamaica Conference Centre in downtown Kingston today.
At stake are seven seats on the 12-member Grace, Kennedy & Company dominated board, and by extension corporate control over the lucrative multi-million sea front trade in predominantly imported cargo for the domestic market.
Shareholders will determine whether Grace, Kennedy, which has held the management contract for Kingston Wharves for the past 57 years, will continue to exercise sole administrative authority over the public wharf company, whether it should be shared with a consortium of shipping interests, or changed.
Three shareholders The Shipping Association of Jamaica Property, Maritime & Transport Services, and Transocean Shipping have formed themselves into a consortium and requested the extraordinary general meeting to remove seven directors and replace them with seven nominees.
Those being proposed are: Roger Hinds, Lance Hylton, Kim Clarke, Harry Maragh, Grantley Stephenson, Brian Young and Charles Johnston. The existing directors whom they have proposed to replace are: Robert Kinlocke, Christopher Bovell, Anthony Chang, O.K. Melhado, John Allgrove, Peter Bitter and Mark Golding.
Of the 12 directors currently on the board, four are representatives of Grace, Kennedy. They: are Rafael Diaz, chairman; James Moss-Solomon, Douglas Orane, and Robert Kinlocke. The other seven are independent directors.
The consortium had initially indicated they would be seeking to replace two Grace, Kennedy appointed directors Mr. Orane and Mr. Kinlocke as well as five independents Messrs Bitter, Bovell, Melhado, Golding, Chang and Allgrove. However, having modified its notice of intention, it is no longer clear if they will still be seeking to unseat Mr. Orane as well.
Kingston Wharves is a public wharf company that has been in operation since 1945 and has been managed by Grace, Kennedy since 1946.
It is listed on the Jamaica Stock Exchange (JSE) and has about 1,400 shareholders. About 90 per cent of the shares were held by six entities until the ICD Group, Commonwealth Development Corporation (CDC), Furness Withing, and Lascelles de Mercado sold their holdings between 1999 and last year.
Grace, Kennedy, with a 43 per cent stake, and Jamaica Fruit and Shipping, with a six per cent holding, remains the only two of the traditional big six shareholders in Kingston Wharves. Jamaica Fruit and Shipping is headed by Charles Johnston, one of those seeking representation on the Kingston Wharves board.
Other large shareholders are the Kingston Port Workers Superannuation Fund, which has about a 15.8 per cent stake; Shipping Association of Jamaica Property, which controls about 15.7 per cent, and Maritime & Transport together with A.E. Parnell & Company, owned by Hylton Clarke, which has about a six per cent holding. Mr. Clarke's son, Kim, is among those being proposed for election to the board of Kingston Wharves.
The Kingston Wharves group comprises the parent company and its two subsidiaries - Harbour Cold Storage, which facilitates public cold storage, and Security Administrators, a security company specialising in maritime security and operates in Kingston, Montego Bay in St. James, and Port Antonio, Portland.
The group recorded a net profit of $156.5 million during its 2001 financial year, and $1.1 billion in group sales. The main activities of Kingston Wharves, the parent company, are receiving, storing and delivery of mostly imported cargo.
As part of an expansion drive, Kingston Wharves was merged with Western Terminals in 1994 and thereafter it was listed on the JSE. At that time, directors of Kingston Wharves retained Grace, Kennedy as the managers.
A $30 million fee earned by Grace, Kennedy in management fees from Kingston Wharves has been a bone of contention for the consortium seeking to unseat the current board.
However, Robert Kinlocke, managing director of Kingston Wharves, said the management contract "is performance-related and therefore there is an incentive for Grace, Kennedy to perform and to make money for Kingston Wharves." The management fee is based on a small percentage of revenue and a larger per cent of profit. "So, if the company makes more profit Grace, Kennedy will get more in management fees," he said.
Today's extraordinary general meeting starts at 11:30 a.m.
