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THEBROADSTREETJOURNAL June 19, 2012
theweekinbusiness
www.broadstreetjournalbarbados.com
Barbados’ Independent Business Voice
Tuesday, June 19, 2012
Clebrating the Chefette-Coke alliance- page 6
Editorial: Next week’s Budget page 5
SMALL BUSINESS
Blackman: “One-stop shop” needed for MSMEs There are over 11,000 micro and small businesses operating in the ‘formal sector’ in Barbados, comprising about a quarter (or 30,000 jobs) of the work force. But there are believed to be many more in the ‘informal’ sector, and little is known of their contribution to the economy in terms of employment, competitiveness and earning of foreign exchange, says Ruth Blackman, permanent secretary in the Ministry of Industry, Small Business and Rural Development. Speaking at the media launch of the Micro Business Sector study on Monday, Ms. Blackman said that the MSME (Micro, Small and Medium Sized Enterprises) sector in Barbados had emerged as an “engine Pictured at Monday’s launch of the study(from left): Anne Reid, CEO and John Williams, of growth” for the economy. “At present, Chairman, BPSA; Ruth Blackman, P.S., Ministry of Industry, Small Business and Rural it is the sector where employment is being Development; Christel Saab and Ruth Holliston of the Inter-American Development created on a sustained basis as more persons Bank; and Joel Richards of the BPSTT. Photo by the BSJ See BLACKMAN, Page 4
By Patrick Hoyos Although acknowledging concern in the private sector that the taxing of entertainment and travel allowances by Minister of Finance Chris Sinckler in his November 2010 budget had “negatively impacted consumer spending,” the Barbados Private Sector Association is not recommending their urgent removal in next week’s budget speech, saying it understood “the need for government to raise revenue and improve the country’s fiscal position.” The BPSA, in its recommendations, placed more emphasis on non-financial ways it felt government could improve the economy, So while “consideration should
THE BUDGET
BPSA takes the pressure off Sinckler re allowances
Body focusses instead on incentives and need to update laws
be given to reinstating the tax deductibility on travel and entertainment allowances,” it could “be done on a phased basis.” The BPSA said, for example, that it supports the Barbados International Business Assocation’s initiatives to help the country regain the “competitive advantage previous-
ly enjoyed by our jurisdiction.” These initiatives include taking quick action to “mitigate the loss of existing Canadian business to competing countries that have signed TIEA’s (Tax Information Exchange Agreements) with Canada,” and giving Invest
See BPSA ON BUDGET, Page 3
news upcoming
Calendar BCCI’s Budget breakfast dscussion • On Wednesday, 27 June from 7:30am to 10am, the Barbados Chamber of Commerce & Industry will host a breakfast at the Hilton to discuss the ecomomic implications of the 2012 Budgetetary Proposals, scheduled to be presented by Minister of Finance Chris Sinckler the previous evening in the House of Assembly. Cost per person is $65.00, VAT-inclusive. A panel comprising Lalu Vaswani, BCCI president; Gloria Eduardo, tax engagement leader, PwC; Richard Cozier, business executive; and Troy Lorde, lecturer in economics, UWI will provide useful analysis and commentary on the minister’s budget. Moderator will be Patrick Hoyos, editor of The Broad Street Journal. The BCCI invites you to “share your views on how you see the provisions outlined in the budget stimulating growth in the economy. ” For reservations, call the BCCI at 434-4750.
24 June:
Motor Sport - BRC Mud Dogs June Safari Championship Safari Round 3
There are seven rounds to the BRC Mud Dogs Safari Championships - two are characterised as “mud fests” and the other five as “safaris”. In the five safaris, there’s a competition for Best Navigator and Driver. Other prizes are awarded for novices and females. In a navigational rally, competitors follow a preset route. Penalties are assessed for failing to follow directions or for arriving at check points too soon or too late.The event, sponsored by the Barbados Rally Club, starts at 2pm.• To have your event listed in our calendar , please send the nformation to The Editor, The Broad Street Journal at bsjbarbados@gmail.com
THEBROADSTREETJOURNAL June 19, 2012
Barbados Stock Exchange
Dividend payments:
• FirstCaribbean International Bank Limited - Directors have declared an interim dividend of one point five (1.5) US cents per share to be paid on June 29th, 2012 to Shareholders on record at close of business on June 13th, 2012. • Light and Power Holdings Ltd. - Directors have declared an interim dividend of twelve (12) cents per share to be paid on June 15th, 2012 to Shareholders on record at close of business on May 31st, 2012. •Light and Power Holdings Limited 5.5% Pref - Directors have declared an interim dividend of thirteen point seven five (13.75) cents per share to be paid on June 30th, 2012 to Shareholders on record at close of business on May 31st, 2012 • Neal and Massy Holdings Ltd. - Directors have declared an interim dividend of
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forty-five (45) TT cents per share to be paid on June 15th, 2012 to Shareholders on record at close of business on June 1st, 2012. • Cable and Wireless (Barbados) Ltd.- Directors have declared a final dividend of twenty-nine point seven (29.7) cents per share to be paid on July 6th, 2012 to Shareholders on record at close of business on June 29th, 2012.
Trading Report for June 18:
One security advanced and two traded firm as 45,803 shares traded on the Regular Market, with a total value of $123,539.42. Sagicor Financial Corporation was the volume leader trading 31,990 shares at $2.20 to close up two (2) cents. They were followed by Banks Holdings Limited and Cable and Wireless Barbados Limited which traded 10,000 and 3,813 shares respectively.•
EXHIBITIONS
C’bean architects’ work for London show Three regional architects will showcase their talent during the Caribbean Design Showcase at the University of Westminster in London, UK during the summer. The showcase, which is a part of the Caribbean Export Development Agency’s London Engage initiative, will feature a 3D projection of the architects’ designs, as well as a wall-to-wall photo display of traditional uses of indigenous building materials in home construction. The showcase will run
from June 28 - July 15. The architects participating in the are Kevin Talma of Talma Mills Studio (Barbados & Trinidad & Tobago), John Allsopp, Amonle Studios (Barbados) and Bryan Bullen, Caribbean Office of Cooperative Architecture (Grenada). The showcase is supported by the European Union’s 10th European Development Fund (EDF) Regional Private Sector Development Programme (RPSDP).•
THE ENVIRONMENT
EPD hosting Open Day Thursday On Thursday, June 21, the Environmental Protection Department (EPD) will host an open day in the Jubilee Gardens, The City, beginning at 9:00 a.m. The event day is one of a number of activities planned by the Ministry of the Environment and Drainage to celebrate Environment Month. Officers will be on hand to provide information on a number of environmental concerns, including marine and noise pollution, asbestos removal; the removal of derelict buildings and vehicles; and the disposal of solid waste and hazardous materials. Environmental Technical Officer, Philip
Pile, said the open day was designed to increase public awareness about the EPD, its functions, and also how members of the public could reduce the impact of their activities on the environment and human health. Personnel from the Diabetes Association of Barbados will be present to offer free blood pressure and blood sugar checks to patrons during the open day. The EPD, established in 1971, acts as the pollution prevention and environmental monitoring and control agency of Government. (Source: BGIS.) •
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THEBROADSTREETJOURNAL June 19, 2012
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BPSA ON BUDGET, from Page 1
Barbados more money to market Barbados in Latin America. As for Barbados’ major foreign exchangeearning sector, the umbrella body was very specific. It wanted to see more promotion of the cruise ship industry and measures which it said would be detailed by the Barbados Hotel & tourism Association, including major tax concessions to the industry. For example, it said that the land tax rate for stand-alone restaurants and tourist attractions should be the same rate as for those attached to hotels; there should be a reduction in the “bound” rates for certain processed meats, corn-on-the-cob, and heavy cream, which it said were used heavily by the sector; and the excise tax on diesel used in the tourism sector should be reduced to the level offered agriculture and manufacturing, as tourism was also an export industry. ·The BPSA wanted a Staycation Tax Rebate and locals and residents to be given the chance to purchase a certain amount of goods duty free during a “staycation”. The BPSA also called for the government to “restructure” the Barbados Tourism Authority, which, it said, had been “in limbo” for some time. The Tourism Development Act also needed urgent revision in order to encourage more investment. The association also called on the government to recognise “the need for Sanitary and Phyto-Sanitary legislation which can benefit the agricultural, agro-processing and food export sectors.” The BPSA noted that the Renewable Energy Rider tariff for householders was set to expire at the end of June, and recommended that a rate immediately be set for a 10-year period to encourage homeowners to invest in alternate energy systems. “This measure will create jobs for installation as well as reducing fossil fuel imports,” it said, adding VAT and other taxes for such systems should also be removed for five years. The association painted a fairly grim picture of what it called “current business realities” being faced by the private sector. It described the “marketplace” as experiencing “flat domestic demand” and said inflation was being driven by commodity and energy prices. The result was reduced profitability or losses, although company balance sheets remained “reasonably strong” but with re-
Visitors and locals enjoying the beach in front of the Hilton. The private sector wants to see more locals enjoying “staycations” to boost the economy. Photo by the BSJ serves and cash in decline. As a result, collecting receivables becoming more difficult and while employment levels were “holding,” they were “under pressure.” The economy was also suffering from a lack of new investment, due to condominium and villa purchases being seen as
“no longer attractive”; international and domestic demand “not seen as picking up”; and uncertainty among investors regarding Barbados “macro-economic risks.” The high cost of operations also made return on investment unattractive; and there was a need to facilitate business in a “modern” way.•
BPSA launches IDB-funded study on micro-business The Barbados Private Sector Association on Monday launched an Inter-American Development Bank (IDB) funded study titled “A Policy Framework to Incentivize the Micro Business Sector in Barbados.” The study was done on behalf of the BPSA by the late economist Mr. Lindsay Holder and coordinated by the Barbados Private Sector Trade Team (BPSTT), a Division of the BPSA. According to Mr. Joel Richards, Trade Consultant with the BPSTT and Coordinator for the Project, “Access to finance continues to be a major issue for the business community, particularly among micro, small and medium business operators. This study was designed with the intention of identifying and removing the impediments/ obstacles facing micro entrepreneurs.” The study proposes better information flows on the micro business sector; more coherent, coordinated and targeted policies for the sector; and the creation of an environment that makes implementation of the policies easier.
This study is also part of a wider programme of cooperation between the IDB and the BPSA with the overall objective of assisting the Barbados private sector to benefit from regional and global integration. The contribution of the IDB to the programme is valued at US$150,000. The BPSA made an “in-kind” contribution to the execution of the project to the tune of roughly US$75,000. Attending the launch were representatives of the IDB’s Country Office in Barbados; the Permanent Secretary in the Ministry of Industry, Small Business & Rural Development; the Chairman and CEO of the Barbados Private Sector Association; the Small Business Development Unit; representatives of Fund Access and the Enterprise Growth Fund Ltd. the Barbados Agricultural Society, the Barbados Chamber of Commerce & Industry, the Small Business Association, the Hotel & Tourism Association and the Barbados Manufacturers’ Association. •
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THEBROADSTREETJOURNAL June 19, 2012
BLACKMAN, from Page 1
are seeing entrepreneurship as a viable option for employment,” she said, especially as a result of the recession, “which is making it difficult for persons to become wage earners.” Additionally, she noted, there had been “a change in the Barbadian mindset regarding entrepreneurship”, as seen in sub sectors such as information and computer technology, craft, and the culinary arts. Ms. Blackman said her ministry would meet shortly with “stakeholders” as it seeks to establish a Small Business Development Centre, which she said would be a “one-stop shop” for small businesses. “Help is being received for this initiative from the Organisation of American States, the American Embassy and the University of Texas, San Antonio as well as Caribbean Export.” Ms. Blackman added that the “short-comings” of the Small Business Act had been recognised and it was to be reviewed. “This could very well result in the Act being repealed and replaced with legislation which takes MSMEs into consideration in their entirety,” she said. “These changes will pave the way for further access to financing, the most frequent challenge articulated by the sector.” •
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THE BUDGET
The BMA’s Budget submissions lack “big picture” quality The Barbados Manufacturers’ Association, some of whose members played a pivotal role over the past several decades in bringing affordable solar water heating to the island, is calling on the government to remove VAT on solar water heaters even as it raises an eyebrow at photovoltaic systems. In its “Budget Submissions for 2012”, the BMA said that while “photovoltaics (PV) are important, 70% of the purchase price of a PV system is lost in foreign exchange, whereas when a consumer purchases a SWH (solar water heating) system, the FX (foreign exchange) spent is 36-40%.” The BMA therefore concluded that “a lot more manufacturing value” was added in purchasing the latter over the former. Since SWH systems cannot be used to create electricity, there seemed to be no need any negative comparison. The same BMA document also contained an indirect endorsement of PV systems, in which the body
urged the government to ensure that legislation was passed to allow homeowners and companies “to sell electricity back to the grid,” and to ask the BL&P to extend the Renewable Energy Rider until the law was in place. The BMA also asked the government to give local manufacturers the chance to supply all schools as well as the new government buildings at Warrens with furniture. It wants government to become compliant with the necessary Phyto Sanitary requirements, which would “allow us to export meat, poultry, fish and dairy products to the EU” as well as service “EU-registered cruise ships right here in our port.” As for the Bridgetown Port itself, the BMA wants government to ensure that goods are cleared in a “timely” manner as “most containers are cleared in overtime,” generating additional costs which are usually passed on to the consumer.
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To this end, it said, the port should also be kept open until after 3:30 p.m. “If truckers can clear the containers before the Port closes they can park them in a dedicated lot and deliver the containers at night.” The BMA also wants the government to lobby on behalf of manufacturers “for less onerous commercial bank interest rates,” and it wants government to introduce reverse mortgages, as “this will allow homeowners to have more spending power.” The association also made a “special request” to protect local producers of hamburger patties. It said these companies were being “severely impacted” by the importation of “frozen beef patties” which are apparently being imported both VAT and duty free as “ground beef ” inder the “Meat of Bovine Animal” category. The BMA noted that Customs’ position was that “since ground beef is in the basket of goods this practice cannot be stopped.”•
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Editorial Next week’s Budget The pencils are being sharpened by journalists, tax accountants, economists, professional firms, ratings agencies, and number crunchers in commercial banks and developmental institutions. It is not too much to say that, given all that is going on in the world at this juncture in history, next week’s Budget Speech, scheduled to be delivered by Minister of Finance Chris Sinckler in the House of Assembly next Tuesday, June 26 at 4 p.m. will be one of the most important for Barbados ever presented. Not just because of our extremely dire economic position, but because of the impending general elections. The nature of the budget provisions could decide who runs the government for the next decade or more. Like France, Greece, Ireland, Italy and Spain - the EU countries with looming budget deficits that must be addressed - Barbados has to decide on austerity versus growth. We put it this way to stress the competing nature of the two dominant choices facing policymakers, but the final result will of course be a mixture of the two. On the one hand we have a Minister of Finance who has recently defended the “success” of his austerity policies in making the economy stable during a time of crisis. On the other, a Loyal Opposition whose leaders say the continuation of such measures will stop much-needed growth from taking shape. In essence, this is the same debate that is being fought internally in the EU countries mentioned above, particularly Greece and France. In those countries anti-austerity forces roiled the establishment. Last weekend’s elections in Greece - the second in a month - returned to power to “pro-bailout” (and therefore, austerity) government that had been sent packing before. The problem was that the anti-austerity forces were from too wide a political spectrum, including Nazis and Communists, and could not form a majority in parliament. Not so in France, where the former Opposition leader Francois Hollande is leading a new, resolutley anti-austerity administration. In Barbados, the chart on this page shows the effect of the minister of finance’s austerity measures over the past 18 months. These figures may well be further updated next week but are from the government’s own estimates and central bank figures. The chart shows only Value Added Tax making significant gains in revenue while the others remain fairly flat. The rise in VAT is based on its increase in November 2010 by 2.5% to 17.5%, which, combined with a spike in commodity prices last year, caused the Treasury to report $75 million more in VAT receipts than even the government’s own estimate. Equally significant is that, despite its increase by 50% and the said spike in oil prices, the Excise Tax intake remained flat. At the heart of government’s stabilisation efforts has been the conservation of foreign exchange. Hence, the decision by Mr. Sinckler to tax personal allowances. The idea was to bring in more revenue for the Treasury while, and perhaps more importantly, reducing the demand for foreign exchange caused by such spending. A few weeks ago in the House of Assembly, the Leader of the Opposition pointed out that up to 75% of the local economy was
THEBROADSTREETJOURNAL June 19, 2012
2009-10 $1,000.0
CBB
2010-11 CBB
2011-12 Rev. Est.
(Bds $m)
5
2011-12 CBB Est.
$952
VAT
($875) $750.0
$765
$704
$500.0
$386 $373
$395
($412)
$422
$294
($297)
$294
$250.0
Income Tax Corp. Tax Import Duties Excise Tax Land Tax
$0 CBB 09-10
CBB 10-11
$147
EST 11-12 (R)
$146
CBB (P) 11-12
($161)
$163
fuelled by domestic activity, which of course impacts foreign exchange. The administration’s current policy of drying up this commerce is having deleterious effects all over the economy. Barbadians are begging for release from the economic chains into which they have been cast over the past two years. There is, of course, the danger that local spending will lead to imports rising faster than we can produce foreign exchange to pay for them, but we believe there is so much pent up demand in this market that, once unleashed, will make Barbados once more a popular place for investment. Getting together the right mix of policies that will spur an increase in Foreign Direct Investment back to the levels of pre-recession times - and in that mix we include urgently-needed measures to make our tattered international business sector more competitive - will provide us with the foreign exchange cover and also create the infrastructural improvements necessary to re-tool our tourism and manufacturing sectors. It does not have to be a roll of the dice; just prudent as well as insightful policies. There is no end to the brain trust we have here, which is made up both of local and foreign grey matter. The party whose mix of policies is deemed best suited to re-start of economic engines of growth will likely be the one entrusted to take charge of the country at the looming elections.•
THEBROADSTREETJOURNAL theweekinbusiness Editor: Patrick R. Hoyos Published weekly in PDF by Hoyos Publishing Inc. Boarded Hall, St. George, Barbados Tel: 230-5687 Email: bsjbarbados@gmail.com © 2012 Hoyos Publishing Inc. All rights reserved.
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THEBROADSTREETJOURNAL June 19, 2012
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Chefette Restaurants Ltd and Banks Holdings Ltd (BHL) have entered into an agreement to give Chefette customers the option of ordering Coca-Cola beverages at all Chefette outlets, starting this week. Raising a toast to the deal last week were (from left) Chefette Restaurants Ltd.’s Executive Chairman Assad Haloute, Deputy Managing Director Janine Haloute and Managing Director Ryan Haloute, with Barbados Bottling Co. Ltd.’s General Manager William Haslett, Coca-Cola’s Franchise Operations Director for the Caribbean, Daniel Saenz, and CEO of the BHL Group Richard Cozier). Photo courtesy of Chefette Restaurants FOOD & BEVERAGE
Coca-Cola now “makes the meal” at Chefette Chefette Restaurants Ltd and Banks Holdings Ltd (BHL) have entered into an agreement to give Chefette customers the option of ordering Coca-Cola, Coca-Cola Light, Sprite, Frutee Extreme Red and Frutee Pineapple beverages at all Chefette outlets, starting Tuesday June 19th. BHL subsidiary Barbados Bottling Company Ltd (BBC) is the local producer of Coca-Cola beverages. Managing Director of Chefette Restaurants Ltd., Ryan Haloute said Friday that “Banks offered a very good long-term contract and price to supply us with Coca-Cola beverages. This partnership solidifies our commitment to support local manufacturing and create more job security, especially in these challenging economic times.” CEO of the BHL Group Richard Cozier said: “It is an honour for us to be providing our products to an indigenous chain of restaurants known for quality meals, standards and service. We are very proud of this al-
liance.” Franchise Director for The Coca-Cola Company, Daniel Saenz, who flew into Barbados for the occasion, said: “Through this importance alliance, we have an exquisite combination over which the main chain restaurant in Barbados joins the most recognised beverage brand globally: CocaCola, declared by InterBrand as #1 Best Global Brand for the past 12 years, and Chefette being a leading brand in Barbados since 1972. ” In his address, Mr. Haloute noted thsat Chefette had recently been voted by New York-based magazine Travel & Leisure as one of the world’s top fast food chains. “We are proud to be able to further support the local manufacturing market, especially in these challenging economic times, to further provide job security and also offer our customers great specials at fantastic prices,” he said. He said Chefette currently purchased the
vast majority of its supplies from the local manufacturing market, including the following products: - Pine Hill Dairy (another BHL subsidiary, thick shakes and soft serve ice cream - Chickmont Foods, chicken - HIPAC, chicken nuggets - COT Printery, food packaging - Roberts Manufacturing, cooking oil - Zepherin’s Bakery, bread - Baker’s Choice, pizza dough - Local vegetable supplies Added to the above list, Mr. Haloute said, was the new alliance between Chefette Restaurants and Banks Holdings, “two local titans who employ over 1,300 staff combined. Both companies have similar founding philosophies of being good corporate citizens by always giving back to the various communities. The synergies between both of our companies will continue to strengthen and be seen in the public as we move forward for the betterment of Barbados.” •
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THEBROADSTREETJOURNAL June 19, 2012
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Lashley: Private sector interested in heritage buildings Government has been successful in creating “very practical and productive partnerships” with the Barbados Chamber of Commerce and Industry, interested individuals and business persons, said Minister of Culture Stephen Lashley, as he addressed the ceremony last Wednesday at the Garrison Savannah for the official inscription of Historic Bridgetown and its Garrison as a UNESCO World Heritage Property. Mr. Lashley disclosed that his Ministry had already had expressions of interests in the restoration of Queen’s Park House, with the Daphne Joseph Hackett Theatre and the Queen’s Park Gallery, as well as the Empire Theatre. The management plan for the property highlights Barbados’ commitment to bringing cultural life back to Historic Bridgetown and its Garrison, Mr. Lashley said. He suggested that Barbadians should conceptualise and design cultural activities to give locals and visitors good reasons to frequent Bridgetown, especially outside of regular business hours. “Remember that a World Heritage Prop-
Expressions of interest have been received for restoring the dilapidated Empire Theatre and other heritage sites in Bridgetown. Photo by the BSJ erty attracts its own following, its very own particular brand of tourist, and we must make ourselves ready to provide for them the experiences that they expect in such a destination,” he said. Director General of UNESCO, Irina Bokova, said the inscription of a site was more than a label, but the beginning of a journey. “This journey must be driven forward by a long-term commitment to safeguard that which we have inherited against the trials of history and against the vagaries of nature, and to transmit it to future gen-
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erations. This is the commitment we take today for Historic Bridgetown and its Garrison,” she told the large audience. Ms. Bokova applauded Barbados’ efforts to establish the Caribbean World Heritage Fund and the development of a World Heritage Policy within CARICOM. According to her, this reflected the deep commitment of the citizens of Barbados to safeguard their heritage as a source of strength and a foundation for a better future. (Source: BGIS)•
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CRIME AND PUNISHMENT
Stanford sentenced to 110 years Compiled from press reports
F
ormer billionaire Allen Stanford was sentenced to 110 years in prison last week for running a US$7 billion scheme, stealing money from his investors to finance his luxurious, high-profile lifestyle in the Caribbean. U.S. District Judge David Hittner said Mr. Stanford’s actions were among the most “egregious criminal frauds.”  In March, a jury had convicted Mr. Stanford of 13 charges including fraud and conspiracy for selling certificates of deposit from his bank in Antigua to thousands of investors in the United States and Latin America. For years, Allen Stanford lived a lifestyle of super luxury, courting the Caribbean public through his promotion of a regional cricket tournament with big prize money and his Caribbean Star airline. His 2008 five-year deal with the England and Wales Cricket Board (ECB) for five annual Twenty20 matches for a US$20 million jackpot was cancelled when the United States Securities and Exchange Commission closed his operation six months later. Stanford landing his helicopter at Lord’s to sign his ECB deal, wrote journalist Nick Hoult, was “a sign of how even the English establishment fell for his patter.” The image of Mr. Stanford wheeling a glass Perspex box filled with US$20 million in prize money on to the pristine Lords field led many to believe that that “the ECB had been blinded by the ostentatious display of wealth to the whispers about his financial dealings which had led other cricketing authorities, in South Africa and Australia, to shun him,” according to another Telegraph writer, Rosa Prince. THE INTERNATIONAL CRICKET world was starting to take notice of Mr. Stanford. But the U.S. authorities had also been watching, and investigating him for years. Apart from his high lifestyle in Antigua, according to the Miami Herald, Mr. Stan-
Allen Stanford, who once loomed large on the Caribbean’s sporting, financial, aviation scenes, heading to court during his trial. ford also owned a US$10 million mansion in Coral Gables plus a $6 million yacht anchored in Biscayne Bay, and ran his financial empire from headquarters at the Miami Center near Bayfront Park. In February 2009, Mr. Stanford’s reign over an international financial empire came to an abrupt end as a federal authorities showed up at the Houston headquarters of his company, the Stanford Financial Group, to shut down what they described as a “massive ongoing fraud” in the sale of about US$8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Around the same time, The Miami Herald said it had found that “Stanford made a deal with Florida regulators allowing him to open a special trust office without regulation. His office sold US$800 million in bogus certificate of deposits, mainly to South American investors. Checks were sent to Antigua and records were destroyed.” During his trial, prosecutors argued that Mr. Stanford had consistently lied to investors, promoting safe investments for money that he used himself, or put into a secret Swiss bank account and mostly failed business deals. Mr. Stanford’s defense lawyers asked for a sentence of “time served” due to the three years he spent in prison waiting for his trial, while prosecutors recommended 230 years. The former financier denied committing fraud or running a Ponzi scheme and, in a statement that went on for over half an hour, blamed the U.S. government for shutting down a business he said had enough assets
to repay its depositors. “I’ve been called a lot of things -- arrogant, abrasive, a son of a gun, difficult, very opinionated and strongwilled. But I am not a thief,” Mr. Stanford, dressed in green prison garb, told the judge. “I never planned to, never did, either corporately or personally, defraud anyone and never set out to do that.” Prosecutor William Stellmach told the judge: “This is a man utterly without remorse. He treated his victims like roadkill.” One of the victims, Angela Shaw, said Stanford preyed on retired teachers, veterans and refinery workers - unlike Madoff, who targeted the wealthy. “He stole more than millions. He stole our lives as we knew them,” Shaw said. Stanford’s attorneys said the conviction and sentence will be appealed. “We’re very disappointed in the outcome,” said Ali Fazel, a Stanford lawyer. “It’s a harsh punishment, and it’s tough on him. He is upset because he feels like he didn’t do anything.” ALLEN STANFORD HAD originally located his businesses in Montserrat, but he resigned his banking license and relocated to Antigua in 1990 after authorities on the British colony began to ask questions, Ms. Prince wrote last week. In Antigua, when reports began to circulate about possible financial misconduct, writes Ms. Prince, Stanford “pulled off the extraordinary feat of having himself named as the island’s regulator.” But she notes that Stanford and his company had by then come to the attention of both the US and British financial authorities, “who wrote several reports warning of irregularity and protested about Antigua’s failure to follow up on them.” Stanford employees, she added, also began bringing law suits against his company, “alleging that they had been fired for refusing to carry out acts they considered illegal or improper.” But investors were unaware of these developments and continued to put money See STANFORD, Page 7
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THEBROADSTREETJOURNAL June 19, 2012
Columbus promises “lower prices” after agreeing to buy TeleBarbados
Barbados-based Columbus International Inc. said last week it has agreed, through a wholly-owned subsidiary, to acquire Antilles Crossing (Barbados) IBC Inc. and Antilles Crossing Holding Co. (St. Lucia) Ltd. from Caribbean Fibre Holdings, LP. The transaction includes the purchase of TeleBarbados Inc., Tele-St. Lucia Inc. and Wamco Technology Group Ltd. TeleBarbados owns and operates a fibrerich telecommunications network in Barbados and provides advanced voice and data services to a diverse retail and corporate customer base on both a wireless and a hard-wired basis. It holds a broad range of licenses as issued under the Telecommunications Act of Barbados to provide domestic and international voice services, backhaul bandwidth capacity services, Internet exchange services, managed data network services, virtual private network services, public Internet access services, fixed wireless telecom services, domestic and international telecom services, and various wireless spectrum services. Tele-St. Lucia holds a series of licenses issued under the Telecommunications Act of St. Lucia to provide similar services throughout that country. Commenting on the transaction, ColumSTANFORD, from Page 6
into the Stanford Group Company and Stanford Investment Bank, “which promised them high yields on investments in safe, heavily-audited financial instruments,” she wrote. She notes that it would later be found that the “vast majority” of the portfolio “was personally handled by Stanford and his best friend of 40 years James Davis (who would later testify against him) who invested it in far riskier private equity and real estate, the proceeds of which the financier used to fund his extravagant lifestyle.” When the much larger Ponzi scheme run by Bernie Madoff unravelled, U.S. federal investigators began to focus on Stanford.
With $225 million to spend Columbus says it’s ready to make a “significant” direct investment in Barbados’ infrastructure bus chief executive officer Brendan Paddick said, “The acquisition of TeleBarbados marks a significant milestone in Columbus’ entry into the Barbados telecom marketplace. Columbus plans to invest heavily in Barbados over the next 24 to 36 months to offer consumers the full triple play of broadband Internet, digital landline telephone and advanced Internet protocol based video services under the brand name FLOW. In addition, Columbus will be launching a series of corporate data, connectivity and IT services under the brand Columbus Business Solutions.” Paddick continued, “With our recently announced $225 million credit facility, CoBy then, according to Ms. Prince, “Antigua had become known as Stanford-land – he had a private terminal at the airport, had built a much-needed hospital, was so well-connected politically he was said to attend cabinet meetings and, with a fortune exceeding the island’s GDP, was one of its biggest employers. Indeed, by 2008, when Stanford performed his “Lords stunt,” she writes, the warning signs should have been clear. “The only appropriate sentence is life,” she quotes one of the victims as saying. “I would not want him to get out and be in a position to hurt anyone else. That is the nature of the man. If he is not in prison he will keep doing this.” •
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lumbus is well positioned to make an immediate and significant direct investment in infrastructure in Barbados, resulting in the launch of a host of new advanced consumer and corporate services, the creation of hundreds of new high technology jobs and lower prices leading to a more competitive Barbados in the global economy. We welcome TeleBarbados’ 60 talented professionals to the Columbus team and we look forward to serving its loyal customers for many years to come.” Columbus International Inc. is a privately held diversified telecommunications company based in Barbados. The company currently operates in Trinidad, Jamaica, Grenada and Curaçao. Through its wholly owned subsidiary, Columbus Networks, the company provides capacity and IP services, corporate data solutions and data center hosting throughout 23 countries in the greater Caribbean, Central American and Andean region. Through its fully protected, ringed submarine fiber optic network spanning close to 18,000 km and its 21,000 km terrestrial fibre and coaxial network, Columbus’ 1,900 plus employees provide advanced telecom services to a diverse residential and corporate client base of close to 500,000 customers.•
Shortly before his fall, Allen Stanford posed with the England Cricket Team after signing the ECB to a five-year deal for Twenty20 cricket.
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THEBROADSTREETJOURNAL June 19, 2012
When quality and accuracy matter InBusiness EXECUTIVE OUTLOOK: How we can emerge stronger from recession
Premiere Edition • January 2012 • From The Broad Street Journal
who’swho
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July 2012 • PILOT EDITION
in Barbados Business
Photos and contact information for over 500 top business executives at your fingertips
HABIB ELIAS Finally living out his dream KAYMAR JORDAN
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THE MAKING OF AN EDITOR
LISTINGS AND RECOMMENDATIONS FOR MARK KING
PAul AlTMAN
NEW MAN IN POWER
lIMEGROVE’S VISIONARY CREATOR
In January thus year, Hoyos Publishing Inc. launched a new publication called INBusiness. The magazine focusses on achievers - business executives, entrepreneurs and professionals based in Barbados whose life and work experiences are informative, educational and inspiring. This positive editorial environment has made the first edition of INBusiness widely-read at all levels of the community.
Advertising Rates (add VAT): INBusiness and Who’s Who: - Full page: $2,800; - Half-page: $1,400; - Qtr Page: $700; - Eighth page: $350.
INSIDER:
2012 Edition Who’s Who in Barbados Business has become one of the most sought-after local publications. It is widely used as a research tool by middle- to upper-level executives interested in reaching upmarket consumers, senior executives, entrepreneurs and buyers. 8,000 copies are distributed annually to hundreds of company offices, as well as hotels, conference centres, banks, supermarkets, coffee shops, convenience stores and restaurants. The cost per listing (including photo), logo, 40-word profile or corporate box is $120.00 each plus VAT, and clients can take advantage of the following discounts for early payment (add VAT): - 15% OFF by June 30: $102 per listing - 10% OFF by July 31: $108 per listing - 5% OFF by Aug. 31: $114 per listing.
Per column inch: $75.00 Full page: 8” H x 3.25” W, $I,200 Half page: 4” H x 3.25” W, $600 Quarter page: 2” H x 3.25” W, $300
• Shopping • Dining & Entertainment • Health & Medical • Professional Services • Art Galleries & Museums The Barbados INSIDER • May 2012 • Page 1
Our new “what’s on” publication, Barbados INSIDER Magazine, will contain accurate, up-to-date information on attractions, restaurants, nightclubs, health and medical services, shops, boutique and stores, museums and galleries, vehicle hire and tours. It will also provide information on major events each quarter, and showcase the people and establishments in our hospitality and service sectors. 8,000 copies of the magazine will be distributed free every quarter in over 200 locations, aimed at both locals and visitors who want to enjoy the best the island has to offer in food, drink, entertainment, culture, health services and shopping. Get one free basic listing for your business. Just send us your email address and we’ll send you a URL for an online application. You can enhance your free listing with a logo, 50-word profile or photo for $I00 each plus VAT. Size of publication: 9” high x 4” wide Number of columns per page: 2
For more information, please call us at 230-5687