Business
JM | Sep 10, 2021

FSC intervenes in Barita APO concerns

/ Our Today

administrator

Orders Barita to make addendum to APO prospectus

Barita Investment’s Fairview, Montego Bay branch in St James. (Photo: Kevin Sam/Google.com)

The Financial Services Commission (FSC) has intervened in the swirling controversy regarding the timing of certain large transaction involving Barita and its affiliated companies and its majority shareholder, Cornerstone Financial Holdings.

The FSC this afternoon (September 10) announced that Barita, whose second APO in a year opened this week, will be providing additional information for its APO prospectus.

In a statement released to the media, the FSC, which regulates new equities coming to the market, advised it has determined that an addendum to said prospectus is required.

This requirement comes subsequent to the prospectus released by Barita Investments Limited in respect of its APO.

“Subsequent to the opening of BIL’s (Barita Investments Limited) APO of shares on September 6, 2021, the FSC believed it was prudent for the issuer to formally release an addendum to the prospectus to ensure an orderly disclosure of material information relevant to the public offer. The disclosures have been reviewed in line with our requirements for disclosures in Management Discussion and Analysis,” the FSC said in its news release.

FSC has no objection to the release of the addendum

Based on that assessment, the FSC says it has no objection to the release of the addendum. The regulatory body for non-deposit taking financial institutions concluded that, “interested investors may speak with their licensed investment advisors for further guidance”.

First Citizens Bank. (Photo: The Bankers Association of Trinidad and Tobago)

Questions have been mounting about loans to Cornerstone Financial and the relationship between Cornerstone and its entities and its subsidiary, Barita. These transactions came days and weeks before the APO with market interests raising questions about the timing of these transactions.

Our Today reported earlier this week on loan transactions, where majority Trinidad government-owned financial institution First Citizens Bank (FCB) is one of three financial entities listed as having provided long-term loans to Jamaican holding company, Cornerstone Financial Holdings.

Documents show that FCB provided a long-term loan of US$25 million to Cornerstone Financial, which is the majority shareholder and parent of the Jamaican brokerage and investment company, Barita. Cornerstone Financial reported in its financials for the year ended September 30, 2020 that JMMB Bank (Jamaica) and Jamaica National Bank provided it with loans of US$5.6 million and US$4.2 million, respectively. 

The Trinidad Express reports that Cornerstone Financial also received US$47.7 million from corporate bond holders between October 1, 2019 and September 30, 2020.

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