ChrisRam.net

Dear Editor,

Over the past few days, I have been engaged in several conversations with both individual and corporate shareholders in Banks DIH Limited who, like me, received from the company correspondence informing them that their shares in the company had been invalidated, and providing them with a “replacement share certificate” for an equal number of shares in a new holding company Banks DIH Holdings Inc. (BDIHHI).

Like an estimated 90% of other shareholders, I never supported the Scheme of Arrangement approved at a special members meeting of the company. The make-up of those supporting the resolution is interesting, but such details may detract from the purpose of this letter, which is to inform my fellow shareholders that I do not intend to surrender my existing shares for what is not only an insufficiently explained objective but a rather egregiously ill-conceived adventure.

Here are some of the reasons.

1. While shareholders could vote for whatever they want, they cannot deprive other shareholders to act in their best interest, including the right to dispose of their shares as they see fit.

2. It is an unfortunate fact that the directors sought and obtained the Court’s sanction of the Scheme, but no provision was made for those shareholders not willing to participate in the new Scheme.

3. At no stage was any of the two principal regulators –  the Securities Council and the Registrar of Companies – engaged in the court process. Usually, the Court would request that the regulator be made a party in any application.

4. It is amateurish and simplistic to assume that a share in BDIHHI will trade at an identical or higher price than that of Banks DIH Limited.

5. If and when the shares of BDIHHI are brought to the Stock Exchange for trading, it is the market that determines the price, not the directors. How often do we not read of share offers on a Stock Exchange either failing or steep falls in price.

6. Banks DIH Limited has retained earnings (undistributed profits) of approximately $50 Bn, available for distribution. Banks DIHHI has NONE. By virtue of two provisions of the Companies Act of which the directors were unaware or recklessly ignored, even if those were to be distributed by Banks DIH subsequently, they constitute capital and not income of Banks DIHHI. Accordingly, they can never be paid as distributable income of shareholders in the holding company.

7. The flip side of this is that the directors of Banks DIH Limited will have sole and exclusive control of the billions built up in Banks DIH Limited over the decades without any scrutiny or accountability.

 8. Banks DIH Limited pays dividends three times per year because of its strong balance sheet with billions of dollars in reserves. That will not be possible by the holding company for some time to come.

9. I have had the benefit of reading the minutes of the meeting of shareholders at which the Scheme was approved. At no time during the meeting, or in the booklet promoting the Scheme, did the directors indicate the risks associated with the Scheme. Or give any projections.

10. For the first time in the long history of this hitherto iconic company, its year end will coincide with the company embroiled in a court matter over its very existence, its shares not traded, and unable to pay dividends.

11. Yet, directors have been tone-deaf to questions raised in the media about the Scheme. This is not only irresponsible but reckless.

12. The sensible solution is to have another members’ meeting to reverse the Scheme of Arrangement, which has already cost the company lots of money. Sadly, hubris and ego will get in the way.

13. If so, the directors should do what is in the best interest of the company and the shareholders as well – resign en bloc.

I appreciate that shareholders expect to receive dividends, and to be able to trade their shares. But simply capitulating at this time can cost them dearly in both the short and medium terms. Before exchanging their shares, shareholders should demand explanation and information from the directors, contact the regulators, consult with fellow shareholders and consider seeking legal advice and action.

Christopher Ram

Shareholder in Banks DIH Limited.

A book review by Christopher Ram – Part 1

An Eventful Life, the autobiography of Dr. Maurice Odle, is among those occasional books that cast new light on facts and events with which a declining number of Guyanese are familiar, rekindling old prejudices and arousing nostalgia. This publication which will soon be available to Guyanese, does more than recount the work experiences of one of the Region’s leading economic academics and practitioners, a contemporary and intellectual soulmates of some of the Region’s top economists and leaders. It is a good read – an honest narrative of an individual who overcame personal challenges to earn his PhD in Economics from the London School of Economics (LSE) in 1973 and spent a long life characterised by political activism and professional excellence in Guyana, the Caribbean and on the international stage.

Dr. Odle was born in 1937 in colonial British Guiana and his early education gave no hint of the contribution he would later make as a respected economist and influential figure in Caribbean and what was then referred to as the Third World. The fifth of eight children to parents of contrasting dispositions in which a strict disciplinarian mother and a father who was less visible and influential, Odle entered Queen’s College where he continued what might be considered a solid but not exceptional student career after which he worked in various Ministries as a public servant. This phase witnessed the blackouts and rationing against the backdrop of World War 11, shaping his early life, social development and political awareness influenced by the growing social and political developments which led to universal adult suffrage and the suspension of Guyana’s constitution in 1953.  

Reluctantly Odle took up his six months’ long leave in the Mother Country, determined to return home. Later, persuaded to change his mind by siblings and friends, Odle elected not to return home but to pursue higher education in London which had seen a large influx of Caribbean and Commonwealth citizens exercising their rights as British nationals.

Following a stint at the Board of Trade and aided by some additional studies, Odle gained admission to LSE in 1961, a move which changed his life forever. At LSE, Odle immersed himself in a rigorous economics curriculum, broadening his understanding of political economy and international relations. He became an active participant in campus life, particularly as an office holder in the West Indian Society a feature of which was the hosting of international politicians and academics, as well as organising cultural events. Odle narrates an incident in London in which he had a tense exchange with Mr. Forbes Burnham which Odle described as disturbing and warranting inclusion in the book. This period also saw Odle engaging in political activism, participating in protests against apartheid and the Rhodesian Unilateral Declaration of Independence (UDI), all influencing his left-wing inclination.

His experiences at LSE and in London broadened his worldview, deepened his understanding of global issues, strengthened his commitment to addressing development challenges in the Caribbean and most importantly caused him to rub shoulders with some of the Region’s intellectual giants in the pre-UWI era, such as Clive Thomas, Norman Girvan, Alistair McIntyre and the world-famous Walter Rodney. 

For those who endured life as an immigrant in the UK, the expression  Life in London seems to be a cruel joke and throughout his studies, Odle faced significant financial challenges, balancing his academic pursuits with various jobs to support himself and his growing family. Having myself done weekend work at Lyons at Piccadilly Circus, I think I understand his comment about washing dishes at Lyons in Regent Road, London.

After completing his MSc at the London School of Economics, Odle secured a lectureship at Enfield College of Technology (later Middlesex University) in England. However, the call of home proved irresistible, and in 1967, Odle returned to the newly independent Guyana to take up a position at the University of Guyana (UG).

Odle’s time at UG was marked by both academic pursuits and political activism. He quickly rose through the ranks, becoming Head of the Department of Economics and later Dean of the Faculty of Social Sciences. His research during this period focused on various aspects of economics, including monetary policy, public expenditure and technology transfer.

The political climate in Guyana during the late 1960s and 1970s was tense, with growing authoritarianism under Forbes Burnham’s government. Conditioned by his early life and the growing political consciousness of the era, Odle became involved in political activities, serving as President of the UG Staff Association and participating in the publication of ‘Ratoon’, a critical pamphlet addressing social and political issues.

Throughout this tumultuous period, Odle managed to maintain his academic focus, producing significant research and publications. He completed his PhD from London University in 1973, becoming a full Professor and Director of UG’s Institute of Development Studies in 1974.

A pivotal moment in this period was the denial of a professorship to Walter Rodney, a prominent historian and activist. Odle was part of the committee that reviewed this decision, which was ultimately politically motivated. The subsequent political tension culminated in Rodney’s assassination in 1980, an event that deeply affected Odle and the course of politics in Guyana.

To be continued

By Christopher Ram & Associates – August 16, 2024

Following concerns expressed about the reliability of the records of the NIS and the mounting number of complaints against the body, the Government announced several initiatives to clear the backlog while Budget Speech 2024 claimed that the Government will offer eligible persons with between 700 and 749 contributions a one-off grant.

Properly understood, the one-off grant is nothing more than the current legal framework provides. It has not addressed an outdated, harsh and unfair arrangement. In the Speech, the Minister also referred to the 14,000 claims outstanding at August 2020 which had been resolved. Our experience tells a less positive story. Here are a few examples.

You will recall that we met in November 2023, after the Court had ruled that the National Insurance Scheme pay an NIS pension to a 73-year-old former employee of Toolsie Persaud Limited. Apparently, under pressure from the Government, the NIS appealed the decision and on 26 January of this year, the Full Court of the High Court referred the matter back to the Trial Judge. The matter is still pending while Mr. Zainul is deprived of a modest pension for which he contributed for over decades. Mr. Zainul is with us again today.

The other person here with us today is Ms. Julia Clarke, aged sixty-eight who, according to the records of the NIS, has 739 contributions – eleven short of the 750 to qualify for an NIS pension. Ms. Clarke disputes the poorly kept records of the NIS, providing evidence that her employment with one employer alone, qualifies her for a pension and not a one-off grant. Like Mr. Zainul, Ms. Clarke submitted to the NIS copies of her pay slips.

Sadly, these are not isolated cases. We have been trying to help another person who worked with the Special Constabulary in the late seventies, but the Special Constabulary cannot locate records which they had once admitted to having. And of course, the poor man cannot find one person, let alone two, who can give a sworn statement that they worked together at the Constabulary some forty years ago. Like so many employers from the state interventionist era, the employers no longer exist.

As a final example, a case was also brought to our attention where persons willing to sign affidavits were scared out of doing so after being cautioned about their failing memories.

Notwithstanding the promises by the Administration, the letters in the press indicate a continuing high level of public dissatisfaction with the NIS, largely due to past inefficiencies and failures by both the NIS and employers, as its former General Manager Patrick R. Martinborough admitted in his book The NIS in Guyana – Its Conception, Development and Future.

Those associated with the NIS and its administration must recognise that the payment of a pension is less about insurance and more about social security while the receipt of a pension is often the difference between poverty and extreme poverty. The ‘floodgate’ argument used in the Zainul matter is unsupported by facts and completely ignores the real human cost to workers who have contributed for decades.

It is incumbent on the Administration to restore public confidence in the NIS by making it more transparent, accountable and responsive to members of the public generally and to contributors and claimants in particular. The conditions for long term benefits under the Scheme have not changed since the Scheme was established in 1969.

Insistence on strict, inflexible and outdated rules which seek to transfer the responsibility for the maintenance of records from the NIS to workers is unlawful, unreasonable, unjust and inhumane. After 55 years, it is more than time for the Government to commission a comprehensive review with a view to modernising the Scheme, providing adequate security and fairer outcomes.

The advent of oil has provided the Scheme with both a financial and actuarial windfall that allows for more generous benefits, and to address inequities. We call on the Administration to immediately publish its Annual Reports and Financial Statements for the years 2022 and 2023 and the long overdue Actuarial Report. It is ironic that the NIS, which holds contributors to strict standards and legal compliance, does not think that such standards apply to itself.

We implore the Government to Immediately withdraw its appeal against the court’s decision in the Zainul matter and to review cases like Julia Clarke’s in an enlightened, humane manner. We also call for the immediate implementation of a sliding scale or partial pension system for persons who have made more than 500 contributions, the equivalent of ten years.

The NIS is one issue that can be objectively and impartially addressed outside of political affiliations or legal technicalities. It is about our values as a society and our commitment to those who have worked hard for their entire productive lives. We cannot stand idly by while our fellow citizens, who have contributed so much, are left without support in their golden years.

I want to show my personal commitment to the cause by making a small token of goodwill to Ms. Clarke and Mr. Zainul by donating to each of them on an ongoing basis, the equivalent of an NIS Old Age Pension out of my NIS and Old Age Pension.

I will be happy to answer your questions.

Christopher Ram
16 August 2024