For those persons who are wont to dismiss the usefulness of market regulators, events this week at the Jamaica Stock Exchange (JSE) should give pause for reflection.

The board of the JSE, having reviewed the draft bid document by Trinidadian firm Angostura Ltd. for the acquisition, ostensibly of 49.24 per cent of the voting stock of Lascelles deMercado, ruled that Angostura was, in fact, moving for a takeover of the listed Jamaican firm.

In other words, the manoeuvres by Angostura, declared or not, would effectively give it control of over 90 per cent of the votes.

In that regard, the offer would trigger the JSE's acquisition rule, which stipulates that ownership/control of over 50 per cent of a company requires a takeover offer.

This would, therefore, demand an offer for all of Lascelles' shares, on the same terms for all shareholders.

The JSE is right. At the very least, the management and board of Lascelles owe their minority shareholders, as the lawyers say, more and better particulars. To put it bluntly, there is need for transparency. There are questions to be answered not only by Angostura but by Messrs. George Ashenheim and Billy McConnell, the chairman and CEO, respectively, of Lascelles deMercado. More important, these two men have effective control of Lascelles, given their ownership of over 46 per cent of the voting shares through a vehicle called Calla Lilly.

For those who are unaware, Lascelles has 96 million ordinary issued shares, with one vote being allocated for every 1,600 of these shares. So, the ordinary shares account for 60,000 votes.

But Lascelles has 60,000 preference shares (50,000 15 per cent and 10,000 six per cent), with each of these preference shares carrying one vote. In other words, the 60,000 preference shares and the 96 million ordinary shares carry the same voting weight for a total of 120,000 votes.

Mr. Ashenheim and Mr. McConnell, through Calla Lilly, own all the 50,000 15 per cent preference share and over 9.5 million of the ordinary shares. Another company owned by these two gentlemen controls nearly half of the six per cent preference shares.

There is nothing amiss in their control of Lascelles. Except that the proposed deal, as outlined in Angostura's draft offer document, lacks the clarity to allow all shareholders to make the most informed judgement on whether to sell, or whether they are being offered the best price.

Ostensibly, Angostura is bidding for 86,484,020 of Lascelles' ordinary shares and 5,028 of its six per cent preference shares at a price, respectively, of US$10.65 and US$0.30 cents. This offer excludes the stocks held by Calla Lilly, of which Mr. Ashenheim and Mr. McConnell are the beneficial owners.

What has raised concern, having been revealed in the draft offer document, is the bid inducement agreement under which Mr. Ashenheim and Mr. McConnell would later transfer ownership of Calla Lilly to Angostura for J$2. Unfortunately, the document, insofar as is immediately apparent, is short on details regarding this deal; and especially when it is considered that the ordinary stocks held by Calla Lilly, on the basis of the Angostura offer, would be valued at over US$100 million.

How the assets held in that vehicle are being dealt with, assuming that they remain there, is a question which even the least curious of investors would want answered, and which has clearly exercised the minds of the regulators.