- Norman Grindley/Staff Photographer
Charles Johnston, chairman of Jamaica Fruit & Shipping, centre, was among those re-elected as directors of Kingston Wharves during the company's annual general meeting at the Jamaica Conference Centre, downtown Kingston on Friday. At left is Douglas Orane, chairman and chief executive officer of Grace, Kennedy & Company, and at right, Harry Maragh, president of the Shipping Association of Jamaica who was also re-elected a director.
McPherse Thompson, Assistant Financial News Editor
OUTGOING CHAIRMAN of Kingston Wharves, Rafael Diaz, has assured minority shareholders that the company would remain public and that they would be given the option of accepting or rejecting an offer to sell their stocks to the major investors.
Mr. Diaz gave the assurance against the background of the Financial Services Commission (FSC) ruling that Grace, Kennedy & Company and a consortium of shipping interests have effectively taken over Kingston Wharves and must make an offer to acquire stocks held by minority shareholders.
The Securities (Take-overs and Mergers) Regulations has been triggered by a May 30 agreement between the parties, which saw them sharing a new 11-member board and together controlling more than 91 per cent of the shares in Kingston Wharves.
FSC'S RULING
The FSC's ruling was made a day before Friday's annual general meeting at the Jamaica Conference Centre, downtown Kingston, at which minority shareholders questioned whether the ruling meant they would be obliged to surrender their shares.
Noting that the board of Kingston Wharves would be required, in due course, to make a statement to shareholders in that regard, Mr. Diaz said "You will have the option to accept or reject any offer made for the additional shares." He said that although the major shareholders has the option to "take the company off the Jamaica Stock Exchange and make it private, that is not something that I would consider. The board is here to stay, to protect the interest of all shareholders."
One shareholder had suggested that minority interests should also be represented on the new board, but Mr. Diaz said that as chairman he represented all shareholders, notwithstanding his nomination by Grace, Kennedy, which holds a 43 per cent stake in the company.
"It's in the spirit of co-operation and the protection of all shareholders that this agreement was entered into," he added.
The agreement was the culmination of attempts by the consortium to change the structure of Kingston Wharves' board following its acquisition, around September last year, of a block of shares that placed them on equal footing with Grace, Kennedy.
Mr. Diaz said they were also proposing to select four independent directors who have no connection whatever with Kingston Wharves to ensure transparency in the operation of the company. Brian Young, a company executive who is chairman of the Caribbean Cement Company, has been the first independent director selected and he will chair the board of Kingston Wharves.
"We are looking to select as independent directors, people of integrity, good standing, with no connection to the company and who can assist us in our deliberations," Mr. Diaz said.
Earlier, in delivering what he said was his last address as chairman of Kingston Wharves, Mr. Diaz noted that the new board would work towards developing a business plan to maximise returns to all shareholders. "The new board, which comprises representatives of a cross-section of the shipping industry, has expressed its determination to work closely together to promote the growth and development of the company in the interest of its customers, staff and all its other stakeholders," he said.
MORE SERVICE AT LESS COST
Mr. Diaz bowed out as chairman after serving in that capacity for the past 14 years and 11 years before that as deputy chairman. He said the new board was being given a mandate to provide more services at a lower cost if Kingston Wharves wanted to effectively compete in the global environment.
He also reported that total volume of cargo handled by Kingston Wharves up to May amounted to 766,272 wharf revenue tons or 1.8 per cent less than the same period last year. Container traffic declined by 7.8 per cent to 39,295 20-foot equivalent units. The reduction was primarily due to the loss of Tecmarine, which ceased operations in the last quarter of last year, as well as the loss in April this year of containers carried by Mediterranean Shipping Company, which shifted its operation to the container terminal. He explained that Mediterranean Shipping Company has deployed larger vessels in their service, requiring deeper draft than was available alongside Kingston Wharves' facility.
VOLUMES FAIRLY CONSISTENT
Break bulk volumes have been fairly consistent with those moved last year, and motor vehicles handled through May totalled 11,251 units, a 17.6 per cent increase over the same period last year. The year to date performance for Kingston Wharves' subsidiaries Harbour Cold Stores and Security Administrators have been above projections and prior year performance, said Mr. Diaz.
At the meeting, Douglas Orane, chairman and chief executive officer of Grace, Kennedy, was re-elected a director, as well as seven others who were appointed on June 5 pursuant to the May 30 agreement.
