(Trinidad Express) The Government’s move to nominate two people to the One Caribbean Media board of directors has arisen out of what Minister in the Ministry of Finance Brian Manning yesterday described as its concern for the “precipitous decline in the value of OCM shares”.
He was responding to a motion of adjournment filed by Senator Wade Mark asking the Government to explain its recent nominations of two directors to the OCM board.
Government is seeking to get insurance executive Dale Mcleod and Shakka Subero, head of Government Relations at Digicel, as directors on the OCM board.
Speaking in the Senate yesterday Manning insisted that it had nothing to do with freedom of the press or with any intention to influence the editorial direction of the media companies—CCN TV6, the Express newspaper and radio station i95.5 FM-which are part of the OCM Group.
The Government acquired 15,286,000 shares in OCM, valued at $183.4 million, equivalent to 23% ownership, as part of the $30 billion “CLICO bailout” by the Government.
The Government has not sought to place a nominee on the board until now. Manning said there had been a “precipitous decline in the value of OCM shares, since the Government acquired ownership…OCM shares have plummeted over the last six years from a value of $12 when they were acquired in July 2018 to a value of $3.68 on July 1, 2024, a decline of $8.32 per share or 69.3%.
“This has reduced the Government’s asset value held in OCM shares, and by extension the National Investment (Fund) Company and the taxpayers of Trinidad and Tobago, by $172.2 million,” Manning stated. “The Government as the largest single shareholder of OCM had not sought to have a presence on the board of the company over the last six years, but having seen its shareholding, and by extension the people’s shareholding, in OCM, reduced in value by over $100 million, with no sign of a recovery in the value in the near future under the present board, it is now considered necessary for the largest shareholder in OCM to be present in the corporate decision-making at the company.”
Nothing to do with influencing editorial policy
Manning said, contrary to what Senator Mark alleged, this move “by no stretch of the imagination has anything to do with seeking to influence the editorial policy of the various media companies within the OCM Group”.
Instead, Manning said, the Govern-ment’s move was “all about responsible corporate governance”.
“It would be wrong for any major shareholder of a company incorporated under the Companies Act in Trinidad and Tobago to sit idly by and watch its assets dissipate and its share value diminish in this way. After all, we are talking about a loss in the value of taxpayers’ assets,” he said. “To sit idly by and do nothing about this huge loss of share value would be irresponsible.”
Manning said public statements made by members of the current OCM board that they do not support and will not support one of the Government’s nominees to the board of OCM “was contrary to all known principles of corporate governance”.
He said under Section 7 (3) of the Companies Act, shareholders at an annual general meeting at which an election of directors is required, elect directors.
“However company directors, unless they are also shareholders, or they have been given a proxy, cannot elect directors at an annual general meeting of a company. Shareholders elect directors, not directors; and while it is a common misconception that directors of companies can elect themselves and other directors… this is simply not the case under the Companies Act of Trinidad and Tobago. Directors, on the other hand, owe a duty to the company, and it is expected that directors will at all times make every effort to maintain and develop the capital value of a company,” Manning stated.
Manning, who itemised the shareholdings of the ten largest shareholders of OCM—(23%, 8.8%, 7%, 4.5%, 3.6%, 3.1%, 2.9%, 2.5%, 2.4% and 2.2%), said the Government through NIF, was by far the largest single shareholder and therefore “stands to lose the most through the serious decline in share value”.
He said the present directors of OCM collectively only directly own 0.16% of the shares, while parties connected to these shareholders hold a total of “just 11.9% of the company”.
He added that four of the present directors—chairman Faarees Hosein, Michael Carballo, Gregory Thompson and Douglas Wilson—own no shares in OCM and are not connected to any shareholder of OCM.
Manning said to underscore the Government’s commitment to freedom of the press, in mid-2023, the Minister of Finance, based on a request from the Express, agreed to request the Eximbank to provide access to foreign exchange, through one of the special windows at the Eximbank, to the Express and other daily newspapers, to purchase newsprint. This facility had not been made available to newspapers under any other Government.
Share price manipulation
In November 2020, OCM chief executive Dawn Thomas blamed active market manipulation for the decline in the media-dominated conglomerate’s share price.
She said although OCM reported double-digit increases in its after-tax profits in its first and third quarters, “nothing has happened with the share price. She said after the company delivered a 15% improvement in its profit after tax, the share price started to go downwards.
“We had a positive first quarter, and we thought we would start to see some improvement in the share price because we were delivering and growing. I would tell you that the persons who were reported to the Trinidad and Tobago Securities Exchange Commission not only bought the shares at a higher price…but immediately sold it down,” she said then. In October 2020 chairman Hosein wrote to the country’s securities regulator, the TTSEC, requesting a formal investigation into a number of purchases and sales of OCM’s shares since the start of that year.
In the letter to TTSEC, Hosein identified 22 instances of “significant declines” of the OCM share price between January 13 and October 9, zeroing in on one shareholder who consistently sold shares at a lower price (than they purchased them), driving down the share price.
Hosein said all sales, with the exception of one block on May 5, 2020 were sold at a price lower than the purchase price.
How OCM has performed
The OCM Group has delivered three consecutive years of profitability, its financial statements for 2021-2023 show.
Over these past three years:
—Profit attributable to shareholders and earnings per share grew by 44%
—Dividends paid grew by 24%
—Dividend yield increased from 3.85% to 5.53%
—The Group has never reported an operating loss.
