In an obvious effort to pre-empt potentially destabilising speculation about its future, Jamaica's National Commercial Bank (NCB) Group has told the market that it would not be affected by last week's decision by its majority owner, Michael Lee Chin, to sell the retail arm of his Canadian fund management business, AIC Ltd.

"AIC Ltd is not the majority shareholder in National Commercial Bank of Jamaica Ltd," the group said in a statement after the announcement of Lee Chin's deal to sell that firm to the Canadian insurance giant, Manulife Financial.

"The majority shareholder is AIC Barbados and, as such, this transaction has no bearing on the ownership of NCB," the statement said.

Both AIC Ltd and AIC Barbados are listed on its website as separate subsidiaries of Lee Chin's Portland Holdings Inc, the umbrella under which the Jamaican/Canadian entrepreneur apparently masses most of his assets.

Lee Chin owns 66 per cent of NCB and his decision to sell the Canada-based funds to Manulife would have raised eyebrows in Jamaica, not least among the holders of US$155 million of AIC Barbados bonds, against which Lee Chin pledged 52 per cent of his 1.68 billion NCB shares. Those notes - the redemption of which Lee Chin has had to seek extensions - are also partially backed by real estate in Kingston.

retire the debt

But Lee Chin's preference would be to retire the debt with proceeds from the sale of his 20 per cent stake in Columbus Communica-tions, a telecommunications service provider, whose assets include undersea fibre-optic links as well as Caribbean cable television systems, including Flow in Jamaica.

It is unlikely that there will be cash from the Manulife acquisition to retire bonds, given reports that Lee Chin will mostly get Manulife shares in exchange for the AIC funds - as happened when he sold his investment advisory outfit, Berkshire Group, to Manulife two years ago.

The sale price for the AIC Ltd assets was not disclosed. Analysts in Canada suggested an upward limit of C$150 million.

At the time of the deal, AIC Ltd had just under C$4 billion under management, down from $14 billion eight years ago. Like most independent fund managers, it found itself under pressure in an environment where the push for size has led to a flurry of mergers and acquisitions.

period of transformation

"Companies around the globe have clearly entered a period of transformation, and this is not different for the mutual fund business where consolidation continues," Lee Chin said of the deal, which is expected to be concluded towards the end of September.

Although Manulife - which will now have around C$13 billion under management and which has moved to the mid-tier of the league table of Canadian fund managers - will take control of AIC Ltd's Canadian Funds, another Lee Chin firm, AIC Investments will remain as a sub-adviser to a dozen of them.

This arrangement, Lee Chin declared, provided "a new foundation" to expand his investment advisory businesses for high net worth clients and on its own account.

Nor will the acquisition by Manulife affect the distribution in Jamaica of those AIC funds which are sold by NCB Capital Markets, NCB said in its Kingston statement.

"This sale of the real arm of AIC Ltd to Manulife will not affect the value or liquidity of the funds held by clients in Jamaica," the statement said. "NCBCM will continue to distribute and service the funds in Jamaica."