THE FINANCIAL Services Commission (FSC) has entered the fray in the Kingston Wharves saga and are seeking to ascertain whether the consortium of pension funds, stevedoring concerns and shipping interests acted in concert to obtain control of the Board of Kingston Wharves.
In September of last year, Lascelles deMercado & Co. Limited sold approximately 201 million shares of Kingston Wharves Limited to a group of shipping companies and their pension funds.
Concerned as to what the disparate shareholders would now do and sensing the likelihood that these entities would now seek to act in concert to obtain control of the Board of Kingston Wharves Limited (KWL), the Chairman of KWL wrote to the FSC to seek clarity.
The FSC is responsible for the general administration of the Securities Act and as far as this case is concerned, The Securities (Take Overs and Mergers) Regulations 1999 is the appropriate authority.
It is looking to determine whether Regulation 26 was breached. It states: " A mandatory offer shall be made to other shareholders of the same class when any person acquires whether or not by a series of transactions over a period of time, shares which (taken together with shares held or acquired by persons acting in concert with him) carry 50 per cent or more of the voting rights of a company or control of the company."
What has to be determined here is whether the various entities were indeed acting in concert. Regulation 12 (1) states: "Where control of a company is acquired by a person or persons acting in concert, or where such control is consolidated, a general offer to all shareholders shall be made within 30 days of acquiring control."
A letter written by the FSC addressing this matter dated February 14,2003, and signed by the FSC's Executive Director, Brian Wynter read: "Arising from information gathered to date, the Commission is of the opinion that on the balance of probabilities, it would be reasonable to conclude that the entities and individuals, collectively referred to as "the consortium", came together pursuant to an agreement with a view to obtaining or consolidating control of Kingston Wharves Limited.
Based on the foregoing, the Commission is of the opinion that regulations 12(1) and 26 of the regulations have been triggered and the consortium members would be jointly and severally required to make a mandatory offer to the other shareholders.
The Commission is hereby offering you (The Chairman, the Board of Trustees, Kingston Port Workers Superannuation Fund) an opportunity to response to these conclusions by way of written submissions to be received by the Commission at its offices no later than 4.30 p.m. on March 3,2003.
