Lok Jack defends Guardian share purchase

Lok Jack bought the shares — representing five percent of Guardian’s issued stocks — from the RBTT, a company in which he is a director. RBTT, which, like Guardian, has a subsidiary in Jamaica, is chaired by Peter July.

In an article in the Business Observer in Jamaica, Lok Jack, responding to media reports in which industry players raised questions about the transparency of the transaction, declared that he had done everything possible to address all potential issues of conflict of interest with the transaction. "All directors face conflict of interest, and have to manage them with the best corporate governance and within law," he said. "That is what we did."

RBTT held 20 per-cent of Guardian’s shares, but according to the bank, wanted to liquidate some of the holding to raise cash to explore other investment options within the region.

Lok Jack said that in order to avoid any conflict or undue influence, the director of RBTT disinvited him and another director — both of them also directors of Guardian — from the RBTT board meeting at which the matter of the sale of the Guardian shares was discussed.

"Nobody who is also a member of the Guardian Holdings board attended the meeting at which RBTT decided to sell the Guardian shares," he said. "They told us they were going to sell the shares, and that therefore we were not invited to the board meeting when the issue was put on the agenda. That was their decision."

Lok Jack and the Ahamad family — which is represented on the RBTT and Guardian boards — paid market price for the shares through a company they jointly own.

In response to criticism that the transaction was done as a block, rather than being allowed to cross the floor of the T&T Exchange, Lok Jack argued that there were only two sets of holders of Guardian shares who were obviously in a position to buy such a huge chunk of the company’s shares.

"They decided to sell and obviously, who were the best to buy it not the two other major groups in Guardian who could afford it and have an interest in buying it?"

In the interview, he pointed out for example that the transaction worth nearly $TT400 million, compared with total stock exchange sale in a typical week of around TT$100 million.

"It would have taken quite a long time to sell such a large block so you must make some kind of agreement for the sale. You do not want to wait for 15 weeks to sell them."

Lok Jack also argued that with RBTT still holding 15 percent of Guardian’s shares, the bank had no interest in seeing the shares being depressed by placing so many on the market at one time.

"Also as the major shareholders of Guardian we — Lok Jack and the Ahamad family — did not want the share price to decline as a result of a large block on the supply side, so we decided to purchase the stocks." With the latest transaction, Lok Jack and the Ahamad family now own 1.3 billion Guardian shares, or a third of the company’s stocks. Lok Jack told the Observer that there was no attempt to hide the transaction. "When I purchased the stock, I informed the SEC (Securities and Exchange Commission) immediately. All disclosure were also made to the Guardian board."