Lalor INVESTORS IN Life of Jamaica (LoJ) yesterday ratified a deal for the state-owned Financial Sector Adjustment Company (FINSAC) to inject $2 billion into the island's largest life insurance operation and take an almost 80 per cent stake in its operation.
The move included the appointment of four persons to a new board for LoJ, and the resignation of all incumbent members excluding executive chairman Dennis Lalor, founder R. Danny Williams and president Milverton Reynolds.
Only one of ten resolutions put to shareholders at an extraordinary general meeting attracted a vote against, that vote made by Mr. Lalor, because of an unresolved issue surrounding his compensation which has been deferred for resolution by the company's new board.
However, it was Mr. Lalor himself, as chairman of the meeting at the LoJ Auditorium, New Kingston, who persuaded shareholders to approve the resolutions after one investor, Cliff Borough, publicly suggested that "none of us vote today", and to wait until they could get a better understanding of the way in which the changes at the company would affect them.
Before that, several shareholders vehemently expressed their dissatisfaction with the management of LoJ, criticising them for the parlous financial condition of the life insurance company, which FINSAC had bailed out for the first time in 1997.
A shareholder said he was surprised to hear Mr. Lalor say that neither the management personnel he hired nor himself had anything to do with the position in which LoJ found itself.
Mr. Lalor said "it appears that the valuation of LoJ's liabilities was miscalculated when it approached FINSAC for financing in 1997", and if they had received the amount required the insurance firm would be in a better position today.
The former executive chairman tried to downplay the role of the actuaries, suggesting that although those personnel were no longer employed by the company, "I wouldn't want you to leave here with the impression that the actuaries are the villains."
Another shareholder suggested that FINSAC should have taken charge after initially injecting capital into LoJ. "To tell us now that the figures weren't right isn't acceptable," he said.
However, Mr. Lalor sprang to the defence of FINSAC, noting that it was not fair to blame the Government agency, since "it was a joint effort between ourselves which revealed the shortfall."
But, according to the shareholder, "I am only saying that with the extent of their responsibility, they need to get competent people to run the businesses they take over."
As the criticisms of LoJ's management mounted, in addition to a lack of what appeared to be adequate explanation on the proposed allocation of the share capital under the restructured company, Mr. Borough suggested that they postpone the vote. However, additional information having been provided, another shareholder urged "everybody to vote in favour of the resolutions because Life of Jamaica is almost dead as is."
Officials at the meeting said that if the resolutions were adopted, FINSAC would control 79.9 per cent of the shares in LoJ.
The investors subsequently approved 10 resolutions, among them, to increase the share capital of LoJ by $111.5 million, and for the directors to issue and allot as fully paid up shares to FINSAC some 1.1 billion ordinary shares in exchange for promissory notes totalling $111.5 million.
The shareholders also approved the following appointments to the board of LoJ: Ministry of Finance financial regulation unit director, Brigette Wilks; FINSAC senior insurance analyst, Michelle Lindo, former FINSAC consultant Desmond Sutherland, and Union Bank chairman, Dennis Morrison, Q.C.
Mr. Lalor told the meeting that Marjorie Henriques, former Planning Institute of Jamaica (PIOJ) executive director, who was among those nominated by FINSAC for the board, has declined the appointment.
Investors also voted in favour of converting the existing 12.5 per cent cumulative redeemable preference shares of $1.00 each into perpetual non-cumulative preference shares.
The meeting having voted in favour of the resolutions, FINSAC is expected to apply to the Jamaica Stock Exchange (JSE) to have the currently suspended shares relisted.
