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WEDNESDAY, JULY 3, 2019

$4.55 IMF tells banks: Don’t ‘penalise’ merchants on debit card use

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE International Monetary Fund (IMF) has urged local banks to stop “penalising” Bahamian merchants for accepting debit card payments by levying “unjustified” transaction fees.

The fund, in its newlyreleased financial sector assessment on The Bahamas, said there was “no economic rationale” for the banks to apply the same processing fees for credit and debit card transactions given that the former’s costs are higher.

It added that many Bahamian merchants were also unaware that they can negotiate these processing fees, known as the merchant discount rate (MDR), with the bank that maintains their business account.

As a result, it said many companies were paying higher transaction fees than necessary on every debit and credit card payment they accept.

The IMF warned that card-related fees were another potential obstacle to the Central Bank’s drive to shift the Bahamian payments system from its traditional reliance on cash to electronic transactions, and called for merchants to be “incentivised” into accepting digital commerce.

“A paradox that occurs in The Bahamas is that there is no differentiation between debit and credit card merchant discount rates,” the IMF found. “There is no economic rationale for this practice given that interchange fees (which are the main driver of MDRs) are higher for credit cards compared to those for debit cards. In other words, merchants are ‘punished’ for accepting debit cards.”

Calling on Bahamian commercial banks to “differentiate between debit and credit card merchant discount rates”, it added: “The current model of applying the same MDR for debit and credit cards does not have any economic justification and serves as a disincentive for merchants to accept debit cards.

“As such, acquiring banks need to revise the current fees they charge to merchants, and ensure that a differentiation for debit and credit cards is in place given the different interchange fees they pay to (card) issuing banks.

“Even though merchants have the option to negotiate with acquirers the merchant discount rate, often times they are not aware of it and thus end up paying a high per transaction fee for every card payment they accept.”

The IMF said many Bahamian merchants “opt out” of installing point of sale (POS) systems to accept electronic payments

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$4.59

$4.56

DPM: Middle class fear over IMF’s income tax

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

T

HE deputy prime minister yesterday warned that following the IMF’s income tax call would likely result in “a significantly higher tax burden” for middle class Bahamians.

KP Turnquest told Tribune Business that there would likely be a major shift, or rebalancing, of the tax burden that would work against middle class and working Bahamians should The Bahamas heed the International Monetary Fund’s (IMF) oft-repeated suggestion that it consider switching to such a taxation system.

He added that The Bahamas’ relatively small 400,000 population was another factor working against the imposition of an income tax, and warned

THE government’s majority ownership of Bank of The Bahamas may have impaired the Central Bank’s “independence” in regulating the troubled institution, the IMF has reported.

The International Monetary Fund (IMF), in its just-unveiled Article IV and financial sector assessment reports on The Bahamas, raised a concern that many Bank of The Bahamas shareholders and other observers have expressed over the eight years since the BISX-listed institution first came under heavy

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• Says may have been ‘hindered’ by govt control • BOB ‘undercapitalised’ again if US recession • Urges ‘corrective action’ at large credit union scrutiny.

“The Central Bank of The Bahamas has been heavily engaged in the recovery efforts of one of its largest domestic banks, which is majority state-owned,” the IMF said, not naming the institution although all will know it can only apply to Bank of The Bahamas.

“Although it has successfully made use of several corrective measures over the past ten years pertaining to this supervised financial

institution (SFI), state ownership of the bank may have hindered the operational independence of the Central Bank in the past.”

The IMF chose its words carefully, as it produced no evidence to prove that the Central Bank’s regulation of Bank of The Bahamas was compromised by the government’s majority ownership, which has currently resulted in it - via a combination of the Public Treasury and National Insurance Board

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

- holding around 82 percent of its equity.

John Rolle, the Central Bank’s governor, did not reply to Tribune Business’s phone, text and e-mail messages seeking comment to this and other questions raised by the IMF report, which praised the regulator’s banking sector supervision as “effective overall”.

Yet the fund’s statement on

that this nation had to guard against “complicated tax models” being pushed by external forces that took no account of the practical realities on the ground.

Again ruling out any plans “at present” to introduce a Bahamian income tax, either corporate or personal, Mr Turnquest said the government will also not be taking up the IMF’s advice to raise real property tax rates.

He added that the Ministry of Finance, together with the Department of Inland Revenue, is instead focused on cutting the $480m real property tax

IMF queries Central Bank ‘independence’ over BOB

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

Bank collapse fund at just 45% of $125m target THE fund protecting Bahamian depositors against bank failure contains just 45 percent of its desired $125m asset target, the IMF has revealed, as it called for the industry to pay more.

The International Monetary Fund (IMF), in its just-released assessment of the Bahamian financial sector, said Bank of The Bahamas’ near collapse had exposed the Deposit Insurance Corporation’s (DIC) inability to fully protect Bahamian households and small businesses from the failure of even a midsized institution.

While the corporation’s protection fund contained some $56m at year-end 2018, the fund warned that this remains well short of both its current $88.5m “target balance” and the elevated $125m goal desired by its board.

Given that the latter target will take ten years to reach based on the corporation’s own projections, the IMF called for its main financing mechanism the annual premium levy imposed on Bahamas-based commercial banks - to be increased from the present 0.0005 percent of each institution’s insurable deposit base.

Hitting the $125m target will give the corporation assets equivalent to two percent of the Bahamian commercial banking industry’s insurable deposits, but the fund recommended doubling this ratio to four percent over the long-term.

“Recent experience has demonstrated the insufficiency of the DIC fund to absorb the failure of a midsized institution,” the IMF concluded. “The fund is at $56m as of year-end 2018 with a target balance of B$88.5m.”

• Urges care against ‘complex external views’ • Argues Bahamas already has ‘simple flat tax’ • Eyes ‘irreducible’ property tax arrears • Bahamas GDP growth cut ‘no surprise’

KP TURNQUEST

$4.59

Full steam ahead for Sarkis on CCA claim

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

SARKIS Izmirlian’s $2.25bn fraud and breach of contract claim against Baha Mar’s main contractor was yesterday given full clearance to proceed by a New York appeals court.

The mega resort complex’s original developer scored another comprehensive victory against China Construction America (CCA) and its affiliates in their preliminary legal battles as the court rejected all efforts by the state-owned contractor to either dismiss the case or have it sent into arbitration.

This represents the second appeals ruling won

by Mr Izmirlian this year, as the same court in February also threw out the

• Second victory in New York appeals court • No arbitration or dismissal for $2.25bn case • Paves way for Baha Mar discovery start

SARKIS IZMIRLIAN temporary “stay”, or injunction, CCA had obtained in a bid to stall legal proceedings until this latest matter was resolved.

Yesterday’s verdict now

paves the way for attorneys representing Mr Izmirlian to begin the legal discovery process where both sides are required to exchange documents, and

subpoena/interview witnesses, relevant to their respective cases.

This, in theory, could result in the production of papers that shed light on both CCA and Christie administration decision-making during Baha Mar’s Chapter 11 bankruptcy case, and subsequent receivership, liquidation and sale, and the nature of contacts between the two parties as they worked to remove Mr Izmirlian and complete the $4.2bn mega resort.

Some observers have already speculated that former Christie government

ministers may be called to give evidence as witnesses by both sides should the matter get to trial, although both this event - and the prospect of that happening - are still some way off and may have to overcome further legal hurdles that will be set by CCA. Mr Izmirlian’s BML Properties vehicle, in a statement sent to Tribune Business yesterday, said: “The appellate division of the Supreme Court of New York today rejected the appeal of defendants China Construction America and its affiliates.

“The court ruled unanimously and entirely in favour of BML Properties, and determined that all of its claims for fraud and breach of contract must

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THE TRIBUNE

Wednesday, July 3, 2019, PAGE 3

Hurricane Hole targeting largest dock in Caribbean

By NATARIO MCKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net HURRICANE Hole’s developer yesterday said its investment will increase by $20m-$30m amid plans to build the Caribbean’s largest marina at the Paradise Island destination.

STERLING Global Financial executives said the project was a “couple of weeks” ahead of schedule and has met all its milestones to-date, with total investment now projected to rise from the initial $250m to between $270m to $280m.

“Thus far we have made all of our milestones and done it ahead

of schedule,” said Khaalis Rolle, Sterling Global Financia’s senior executive vice-president for business development. “We said we would break ground a year from the time we purchased the property. We were actually a week ahead of that, and I think now we are a couple weeks ahead of the construction schedule.

“We have employed with the project directly about 55 to 60 people, but with all of the sub-contractors and contractors we are well within the hundreds.” Some 600 jobs are expected to be generated during Hurricane Hole’s redevelopment, with around 500 permanent jobs created at completion.

Mr Rolle, former

HURRICANE HOLE, PARADISE ISLAND

KHAALIS ROLLE

investments minister under the Christie administration, added: “We purchased this property from Brookfield in February of 2018, and one of the commitments we made was we wanted to break ground within a year.

For a development of this nature and size it is virtually unheard of, from purchase to design, to go through that process within 12 months.

“Due to some of the changes we have made

to the design, we think it’s going to go beyond our original estimates of $250m to maybe $270m or $280m. The entire project is expected to be completed in five years.”

Sterling Global Financial is expected to move its offices to Hurricane Hole upon its transformation into a “mixed used” development consisting of retail, office and residential space.

Mr Rolle said: “We have seen quite a bit of interest from various services providers. The retail offerings will be service-oriented. We will have two restaurants, which will be standalone.

There will be a liquor store, a mailboxes type facility, dry cleaners, a spa, hair and nail salon, doctor’s offices and things of that nature that people will need. We are also building a 5,000 square foot supermarket.

He declined to name the tenant for the supermarket, but added that the Hurricane Hole development is being carried out in three phases. The first two buildings will be called Sterling Commons, and feature retail, office and residential components. The marina will also be incorporated into first phase work.

Yesterday featured the pouring of concrete to mark the start of vertical construction for the first phase, which is expected to be completed by the end of June 2020. The second phase will be called One Paradise Island, said Mr Rolle, adding that this will include residential towers, the restaurants and supermarket.

“A key feature which excites me in this first phase is the mega yacht marina, which will be the largest in The Bahamas and Caribbean. Our smallest slip will be north of 50 feet, and the largest one would be 500 feet. There is no other marina in the Caribbean that has a dock as big as that. We are very excited about that,” said Mr Rolle.

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PAGE 4, Wednesday, July 3, 2019

THE TRIBUNE

IMF tells banks: Don’t ‘penalise’ merchants on debit card use FROM PAGE ONE because there are too few users to justify the costs, resorting back to cash and cheque methods.

“There are also cases where the merchants are willing to install a POS terminal but, in the absence of significant usage by buyers, they opt out since they still have to incur fixed costs for terminal maintenance, thus reverting to cash and cheques,” it added.

“This is primarily observed in areas with elderly communities or other population segments that do not have access to bank accounts and use exclusively cash, such as part of the migrant community.

“In order to further encourage merchants (particularly small ones) to accept electronic payments, the Ministry of Finance could explore

Bank collapse fund at just 45% of $125m target FROM PAGE ONE “The DIC Board is considering raising the target to B$125m (two percent of insurable deposits), a level sufficient to fund resolution

fiscal or monetary incentive schemes to offer. Such incentive schemes could be of a subsidising nature for the installment and maintenance fees of the terminal, or direct monetary incentives based on the number of electronic payments accepted.”

Drawing on data from the World Bank’s 2018 global payments system survey, the IMF said the volume of annual credit and debit card transactions in The Bahamas had more than doubled between 2014 and 2017, rising from 5.466m to 11.347m However, it warned that “an action plan is imperative” to reduce reliance on cheque payments in the Bahamian market, and even suggested regulatory intervention from the Central Bank may be necessary in “the medium term” to the extent of “banning” their use.

“An action plan is imperative for the reduction of cheque usage in the Bahamian market,” the Fund said. “Based on the industry’s indication, most cheques are used for person-to-business payments in the context of salary payments, and businessto-business payments in the context of payments to suppliers.

“The Chamber of Commerce along with the banks can take a proactive role in informing businesses about alternatives to using cheques. Presently, the higher cost to processing cheques at the ACH (Automated Clearing House) and the high cost of cashing cheques out has not deterred the different actors from using them.

“As such, in the mediumrun, the Central Bank might also have to also take regulatory measures such as passing a regulation stating

that transactions with high values should be made only through credit transfers and follow the model of many other countries including banning the use of cheques in the country.”

Such a ban would be a seismic event for many Bahamians and small/ micro businesses which have grown accustomed to a cheque payments culture as the main mechanism for conducting commercial transactions. Yet the IMF’s report highlights the ongoing difficulties faced in transitioning many Bahamians to electronic and online banking.

To aid this objective, which links to the Central Bank’s efforts to improve financial inclusion, the IMF called on The Bahamas to consider introducing an Instant Payment System as a way “to fill some of the gaps in the current payments infrastructure”. It

added that this could be operated by the Central Bank, which is the model many other countries have adopted.

“Instant payments facilitate the settlement of funds between the payer and the payee in real-time, less than 10 seconds, thus addressing the challenges that the archipelago nature of The Bahamas brings to access and usage of electronic payments,” the IMF said.

“Instant payments are used for a number of cases, including person-to-person transfers, business-to-business payments, bill payments and government payments.

Moreover, instant payments have the potential to be used at the point of sale through QR code payments acceptance infrastructure that is typically easier to install and maintain. When merchants accept an instant payment, their account is

credited in real-time. This could also decrease the demand for physical cash in the Family Islands.”

The IMF also warned that every Bahamas-based payments system requires matching standards and technology, so that they could facilitate the exchange of funds between each other without imposing delays and extra costs.

It added that the Bahamian financial services industry needed to reach “Account-to-Account (A2A) interoperability between bank accounts and e-money accounts, as well as among e-money accounts themselves”.

“The final objective is that an individual or merchant that has a transaction account, with any service provider, will be able to use it seamlessly with any other payer or payee throughout The Bahamas,” the IMF said.

of the largest medium-sized bank. The levy should be increased to meet this target, as based on DIC’s projections it would take about a decade to reach $125 million at the current premium of five basis points.”

Tribune Business revealed yesterday how just one-third of insurance-eligible Bank of The Bahamas deposits would have been covered if the troubled BISX-listed institution had collapsed as the DIC

had less than $40m to cover $120m in insured deposits at the time the bank was first bailed out in 2014.

This meant that over $80m in depositor funds could have been wiped out if Bank of The Bahamas had been allowed to fail.

Given that only Bahamian dollar bank accounts up to $50,000 are covered by the Deposit Insurance Corporation, this potential $80m loss would have been suffered

by individuals, families and small businesses and entrepreneurs.

The IMF’s report called for the DIC’s funding target to be measured against models showing the impact of potential banking collapses. It added: “The DIC should produce financial projections based on alternative scenarios of future bank failures.

“The [IMF] mission recommended targeting a level of at least two percent of insurable deposits in the near term, and increasing this to closer to four percent over the longer term.” The Fund also warned against expanding the DIC’s coverage to credit unions, arguing this should only be done when its fund had sufficient assets and that sector was “sufficiently capitalised” and regulated.

The DIC was created in 1999 following the collapse of Gulf Union Bank (Bahamas). It had paid out $6.517m to that bank’s depositors and liquidators as at yearend 2012, and is viewed as another element in ensuring financial industry stability by minimising or eliminating “the risk of loss of savings of small Bahamian depositors in the event a bank fails”.

Premium payments to the DIC, and membership in it, become compulsory once an institution starts accepting Bahamian dollar deposits.

Members as at March last year, the last date at which a list is available, include Ansbacher (Bahamas); Bank of The Bahamas; Bank of Nova Scotia Trust Company (Bahamas); Citibank; Commonwealth Bank; Fidelity

Bank (Bahamas); Finance Corporation of the Bahamas (FINCO); FirstCaribbean International Bank (Bahamas); RBC Royal Bank (Bahamas); Royal Fidelity Merchant Bank & Trust; and Scotiabank (Bahamas).

The IMF report, meanwhile, said Bank of The Bahamas’ near failure and subsequent bail-outs had exposed flaws in this nation’s financial crisis management and safety nets that it was now tackling through “ambitious” proposed legal reforms to bring regulation “in line with international best practice”.

Calling for these reforms to be implemented “without delay”, the proposed changes would allow the Central Bank to appoint a statutory administrator to take over a failing bank and/or put in a liquidator to wind it up without first obtaining approval from the Supreme Court.

“Vulnerabilities in the existing framework were exposed in the context of the near failure of Bank of The Bahamas, and indicated that implementation approaches for deposit insurance, asset management, and recovery and resolution planning should be addressed in parallel with proposed legal reforms,” the IMF said.

“The amendments represent a major improvement to the bank resolution framework. The proposal follows an administrative approach to bank resolution under which the Central Bank may appoint a statutory administrator with broad powers to

resolve a failing bank, and a liquidator to wind up the bank without recourse to the courts.

“Provisions requiring recovery plans and granting the Central Bank the power to develop resolution plans are also included. Amendments to emergency liquidity assistance provisions clarify the purpose of such lending and address solvency tests, collateral mandates, penalty rates, and maturity limits.”

The fund added that vehicles such as Bahamas Resolve, which was used to facilitate the two Bank of The Bahamas bail-outs, needed to be given legal standing with proper governance, accountability and strategies, and clear guidelines for appointing their Boards and management.

“Presently the operations and management of Resolve... are opaque, as the guiding legal infrastructure is lacking. It has no clear accountability as information regarding its activities is not available to the public, the Central Bank or the DIC. Resolve should run its operations on a commercial basis, with an explicit mandate to maximise the value of the assets it holds,” the IMF said.

“Any bank with excessively high non-performing loan levels and a potentially challenged business model should submit a restructuring plan to the Central Bank.

Any such institution needs to ensure its viability on a forward-looking basis or be resolved if a path to viability cannot be found.”

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Complete minimum monitoring perby Agent Week. The number is decided by management •• Remain current with all resort updates and if required by Management, take opportunities to view first-hand.

Any other duties/projects as deemed necessary by management •• Complete minimum number of monitoring sessions per Agent Week. The number is decided by management Any other duties/projects as deemed necessary by management • Complete minimum number of monitoring sessions per Agent Week.

The number is decided by management Experience/Skills/Qualifications: • Any other duties/projects as deemed necessary by management • Any other duties/projects as deemed necessary by management Experience/Skills/Qualifications: Experience/Skills/Qualifications: • Minimum of 5+ years’ senior management experience in a call Center environment Experience/Skills/Qualifications: Experience/Skills/Qualifications: •• Minimum 5+ years’ senior management experience infield a call Center environment Bachelor's of Degree in Business Administration or related Minimum of 5+ years’ senior management experience infield a call Center environment ••• Bachelor's Degree in Business Administration or related Proven management, problem solving and leadership skills Minimum of 5+ years’ senior management experience infield a call Center environment •• Proven Bachelor's Degree in Business Administration or related Minimum of 5+ sales years’ senior management experience in a call Center environment management, problem solving and leadership skills • Bachelor's Proven advance skills Degree in Business Administration or related field •• Proven management, problem and leadership skills Bachelor's Degree in Business Administration or related field Proven advance sales skills solving Multitasking abilities •• Proven management, and leadership skills advance sales problem skills solving • Proven Proven management, problem solving and leadership skills Multitasking abilities Technology comfort know how •• Proven advance salesand skills abilities •• Multitasking Proven advance salesand skills Technology comfort know how Excellent time management, organizational, communication, and analytical skills Multitasking abilities Technology comfort and know how •• Multitasking abilities Excellent travel time management, organizational, communication, and analytical skills •• Preferred: Technology comfort and know how industry experience Excellent time management, organizational, communication, and analytical skills • Ability Technology comfort and know how travel may to travel as required, extended be expected and analytical skills • Excellent time management, organizational, communication, • Excellent time management, organizational, communication, and analytical skills Only short-listed candidates will be contacted. Interested persons should submit their applications by July 8th, 2019 with curriculum vitae to hrreport6@gmail.com

NOTICE

Mr. Esek Lynes

can you please contact The Human Resource Section of the Department of Immigration.

THE TRIBUNE

Wednesday, July 3, 2019, PAGE 5

HURRICANE HOLE ‘PROVES’ PENT-UP DEMAND FOR PI

By NATARIO MCKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net THE “pent up” demand for Paradise Island has been proven after two-thirds of the Hurricane Hole project’s first phase residential units went under contract within the first two weeks.

Patrick Lenihan, director of sales at Waypoint Real Estate, the marketing group working with Sterling Global Financial on its $270m-$280m redevelopment, said: “There is a pent-up demand. I think it’s been proven by the quick response we have seen. This an opportunity that hasn’t been on Paradise Island in a decade, in addition to the expansion of the marina.

“This is a unique community. This is an opportunity to bring that disjointed portion of the community into one place. You will never have to go over the bridge if you don’t want to, and I think it’s going to create a unique atmosphere that doesn’t exist tight now.”

One-bedroom residences in the development’s first phase are priced at $670,000, with two bedroom units at just under $1.1m. Mr Lenihan added: “As far as pricing I think that was determined in the first two weeks. We have had eight of the residences purchased in the first two weeks out of 12.

“Right now we have 12 residential units in the first phase, 46 coming in the next phase and the third phase is still to be determined as far as the make-up of it, but likely it will be

DEPUTY Prime Minister Peter Turnquest joined Sterling Global yesterday for Hurricane Hole Marina concrete pouring. Pictured from left: Khaalis Rolle, senior executive vice president, Sterling Global; Kenue McPhee, CFO, Sterling Global; Peter Turnquest, deputy prime minister; and Nick Namo, construction director at Sterling Construction Development.

Photos: Shawn Hanna/Tribune Staff around anywhere from 130150 total residences.”

K Peter Turnquest, deputy prime minister, said: “We are certainly very excited the project has reached this stage where they’re putting shovels in the ground, demonstrating to the naysayers the project is going forward and the investment is being realised.

“We are very excited to hear the project is two weeks ahead of schedule.

That bodes well for the economic growth we anticipate coming from this project going into 2020, when we expect to have the first phase completed.

“We are pleased that the current workforce of contractors and sub-contractors

PATRICK LENIHAN is around 100 persons, which will ramp up when the project gets going. That is positive news and aids us with our growth agenda and employment statistics.”

MEGA DOCKS TO AID YACHT REGISTRY EFFORT

By NATARIO MCKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net HURRICANE Hole’s ambition to develop the largest Caribbean marina slip could aid The Bahamas’ efforts to establish a yacht registry, the deputy prime minister said yesterday.

K Peter Turnquest said Sterling Global Financial’s focus on mega yachts through its $270m-$280m project, which includes a marina redevelopment, could provide spin-off benefits for The Bahamas.

“We look forward to the hosting of mega yachts in the marina, which brings an additional benefit to the

community and also helps us to support our initiatives with respect to a yacht registry in The Bahamas, which is something we have been aspiring to for many years,” Mr Turnquest said.

“Home porting these yachts brings with it all of the requirements for the maintenance of yachts, employment of crew, and brings benefits to the economy of Nassau and The Bahamas in general.

“The new careers that may be spawned as a result of home porting these mega yachts is also something that is very exciting, and I think will do well for those young, aspiring Bahamians who want to get into

less traditional fields. It will fall in line with what we are trying to do with our technical training initiatives through BTVI and other training initiatives.”

Mr Rolle, Sterling Global Financial’s senior executive vice-president for business development, had earlier said: “A key feature which excites me in this first phase is the mega yacht marina, which will be the largest in The Bahamas and Caribbean. Our smallest slip will be north of 50 feet and the largest one would be 500 feet. There is no other marina in the Caribbean that has a dock as big as that. We are very excited about that.”

PAGE 6, Wednesday, July 3, 2019

THE TRIBUNE

DPM: Middle class fear over IMF’s income tax FROM PAGE ONE arrears mountain to an “irreducible number” through a combination of enforcement measures and legal reforms that passed with the 2019-2020 budget.

Mr Turnquest explained that these gave the government the ability to write-off “erroneous and over-charged” billings after clauses in the Financial

Administration and Audit Act that previously prevented it from doing so were replaced.

He conceded, though, that the IMF’s decision to cut The Bahamas’ 2019 economic growth forecast to 1.8 percent was “not unexpected” given gloomier worldwide developments, and said the government’s 2019-2020 budget estimates had been based on more conservative figures.

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, ANTONIQUE BROWN, of Freeport, Grand Bahama, Bahamas, mother of ANDREZ OTHNIEL JOSEPH JOHNSON, a minor, intends to change his name to ANDREZ OTHNIEL JOSEPH SAUNDERS. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas, no later than thirty (30) days after the date of publication of this notice.

LEGAL NOTICE

NOTICE PARTRIDGE CONSULTANTS LTD. In Voluntary Liquidation

Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, PARTRIDGE CONSULTANTS LTD. Is in dissolution as of July 1, 2019 International Liquidator’s Services Inc. Situated at 3rd Floor Withfield Tower, 4792 Coney Drive, Belize City, Belize , is the Liquidator.

Voicing optimism that The Bahamas could beat the revised projections if projects such as the Grand Lucayan purchase and Carnival cruise port came to fruition quickly, Mr Turnquest said the government was sticking to its 2018-2019 deficit target and three-year consolidation goals despite IMF pessimism that these will take longer to achieve.

And, while the Ministry of Finance’s economics unit continues to monitor global tax developments for any changes that may impact The Bahamas’ current system, the deputy prime minister said this nation faces no pressure to implement a radical overhaul via income tax or any other option.

“As we look globally, countries are moving to flat, simplified tax systems,” Mr Turnquest told Tribune Business. “That’s what we have in The Bahamas; a simple flat tax through VAT, customs duties and stamp duty.

“For us to try and adopt some kind of complicated tax model to satisfy the external view of what we ought to be doing complicates the situation on the ground. There’s only 400,000 of us here.

“When you talk about progressive taxation you have to take a serious look at what that means. The burden would potentially shift towards the middle class from the lower class.

Any progressive tax has to

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LIQUIDATOR ______________________

take these things into consideration,” he continued.

“Given the make up of our economy, our economic class, it would very difficult to see how we could make that work without a significantly higher tax burden.

“We’ll do the modelling and see how that works out, and be prepared for any change in global circumstance that may cause us to look at these things more aggressively. At the moment, we have no intention of implementing any kind of corporate or income tax. That’s the position of the government.”

The IMF’s latest Article IV report argued that introducing an income tax over “the medium term” will create a Bahamian tax system that is more equitable and fair, with the payment burden based on each individual’s ability to pay.

It added that such a change could also lead to a replacement for the annual business licence fee, and help “contain increasing profit repatriation” out of The Bahamas by non-residents.

The Bahamas’ existing 50-year tax structure, which is largely based on consumption and property, is regressive in that it imposes the same burden on rich and poor Bahamians. With much of the existing system acting as a tax on the cost of living, lower income Bahamians pay a disproportionate amount of tax from their earnings compared to wealthier counterparts.

While they would likely be among the greatest income tax beneficiaries, the burden will likely increase for middle class Bahamians who comprise the majority of this

MARKET REPORT www.bisxbahamas.com

(242) 323-2330

TUESDAY, 2 JULY 2019

(242) 323-2320

ALL SHARE INDEX: CLOSE: 2,160.55 | CHG: 0.12 | %CHG: 0.01 | YTD: 51.10 | YTD%: 2.42 BISX LISTED & TRADED SECURITIES 52WK HI 4.50 20.91 7.00 5.60 2.60 2.00 3.10 11.05 6.17 4.64 12.50 2.74 2.00 9.51 7.01 15.60 7.98 3.75 14.00

52WK LOW 3.50 19.17 4.90 4.02 1.00 0.19 2.00 8.98 6.13 3.54 9.00 2.35 1.70 7.50 6.10 11.25 6.20 3.01 12.51

PREFERENCE SHARES 1000.00 1000.00 1000.00 1000.00

1.00 103.00 100.00 100.00 105.00 103.00 100.00 10.00 1.01

1000.00 1000.00 1000.00 1000.00

1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.00

SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Fidelity Bank Class A Focol Class B

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ

E J K L M N

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00

52WK LOW 100.00

115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

SECURITY Fidelity Bank Note 22 (Series B) +

SYMBOL FBB22

Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

BAHAMAS GOVERNMENT STOCK - (percentage pricing)

LAST CLOSE 4.24 17.43 6.00 5.40 2.51 1.95 2.13 11.05 6.16 4.49 9.02 2.86 2.00 9.96 7.00 14.45 7.98 3.41 14.00

CLOSE 4.24 17.43 6.00 5.40 2.51 1.95 2.13 11.05 6.16 4.49 9.02 2.88 2.00 10.09 7.00 14.45 7.98 3.41 14.00

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.13 0.00 0.00 0.00 0.00 0.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

CLOSE 100.00

CHANGE 0.00

107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

LAST SALE 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

VOLUME

42

102

VOLUME

EPS$ 0.167 0.932 1.760 0.323 0.098 0.000 -0.438 0.708 0.480 0.184 0.627 0.102 0.209 0.000 0.611 0.743 0.939 0.205 0.631

DIV$ 0.160 1.260 0.000 0.250 0.000 0.020 0.000 0.720 0.220 0.120 0.000 0.068 0.060 0.328 0.240 0.540 0.200 0.120 0.600

P/E 25.4 18.7 N/M 16.7 N/M N/M -4.9 15.6 12.8 24.4 14.4 28.2 9.6 N/M 11.5 19.4 8.5 16.6 22.2

YIELD 3.77% 7.23% 0.00% 4.63% 0.00% 1.03% 0.00% 6.52% 3.57% 2.67% 0.00% 2.36% 3.00% 3.25% 3.43% 3.74% 2.51% 3.52% 4.29%

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST Prime + 1.75%

MATURITY 19-Oct-2022

6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%

20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022

YTD%12 MTH% 1.55% 3.97% 1.18% 4.17% 1.11% 2.71% 2.06% 4.97% 4.52% 0.96% 1.57% 4.58% 0.99% 4.25% 1.32% 4.12% 3.22% 5.64% -1.08% 1.77% -5.96% -3.05% 1.90% 4.59% 7.24% 11.96% 2.77% 3.88% 3.94% 4.69% -0.71% 0.16% 7.40% 2.70% 10.20% 1.30%

NAV Date 31-May-2019 31-May-2019 31-May-2019 31-Mar-2019 31-Mar-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Apr-2019 30-Mar-2019 30-Mar-2019 30-Mar-2019

nation’s 220,000-strong workforce.

Income tax systems also tend to be complex and incur high administrative costs, which was one of the key reasons they were rejected in favour of VAT, while there is no history or culture of paying income taxes in The Bahamas.

Mr Turnquest, meanwhile, confirmed that the government is rejecting another IMF recommendation to raise real property tax rates. Instead, he said: “We are focused on compliance and ensuring we get the assessment correct, and that we have every taxable property on the tax roll and being billed the proper tax.

“The focus is on the project we’ve launched and having that completed as soon as possible; potentially in the fall. We anticipate that will result in a significant bump up in tax revenue overall. On the arrears issue we have inherited, we continue to work on that to bring that down and are taking some enforcement action to realise security on outstanding arrears.

“We will do that as best we can to reduce arrears to an irreducible number and collect that outstanding tax from those people.”

While that accelerates, and carries on, initiatives started by the Minnis administration’s predecessor, Mr Turnquest said the $480m real property tax arrears number cited by the auditor general likely contained errors and amounts that are uncollectable.

“In some instances there are duplications, and in some instances there are properties that are not taxable,” he explained. “The list needs to be cleaned up, and that’s part of the process.

“One of the amendments we passed gives the ministry the ability to write off erroneous and over-charged bills it will never collect, which before it could never write-off as it was constrained by the Financial Administration and Audit Act.” Mr Turnquest added that the IMF’s decision to cut The Bahamas’ projected 2019 GDP growth from 2.1

percent to 1.8 percent was “not unexpected” and “in line” with negative global developments that include the US-China trade war, Brexit and China’s slowing.

“We indicated in the Budget debate there would be some slowing from the original projection,” he told Tribune Business.

“When you look at historical growth rates for the country it’s [1.8 percent] not out of line and exceeds the long-term rate. We’re in a positive trend, and may beat the expectation if some of the projects we’ve lined up come to fruition in time.”

The deputy prime minister identified these as the Carnival and ITM/Royal Caribbean projects for Grand Bahama, together with Nassau cruise port’s planned overhaul, the Hurricane Hole redevelopment and Gold Wynn.

“We accept that there is likely to be some push back on original growth projections for the year, and want to be realistic and practical about this thing,” he reiterated. “If some of these projects kick-off we may yet hit the original targets.”

Mr Turnquest also remained optimistic that the government will meet its 2018-2019 deficit target despite the IMF’s projection of a $50m, or 0.5 percent of GDP, miss. The Fund also forecast that the “fiscal balance” and 50 percent debt-to-GDP ratio will take longer than anticipated to hit.

“We managed our situation as best we could through the end of the year and we anticipate we should still be within the Fiscal Responsibility Act’s compliance/tolerance rates, so we’re very confident,” he said.

Mr Turnquest said the government retained similar confidence in its three-year fiscal consolidation plan, and added that the Fiscal Responsibility Council was supposed to have been appointed and sworn in this week. He declined to name its five members or the chair.

NOTICE GOLDIVORY LTD. NOTICE is hereby given as follows:

(a)

Goldivory Ltd. is in Voluntary Dissolution under the provisions of Section 138(4) of the International Business Companies Act 2000.

(b) The Dissolution of the said Company com menced when the Articles of Dissolution were submitted to and registered by the Registrar General of the Commonwealth of The Bahamas. (c)

The Liquidator of the said Company is Beatus Limited, P.O. Box N7776-348, N.P., Bahamas.

Dated 1st day of July, 2019.

Beatus Limited Liquidator

MUTUAL FUNDS 52WK HI 2.24 4.29 2.06 188.32 158.55 1.62 1.76 1.70 1.15 6.99 8.54 6.15 10.52 11.46 10.46 10.00 8.69 11.79

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.56 1.68 1.64 1.08 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F

NAV 2.24 4.29 2.06 188.32 154.49 1.62 1.76 1.70 1.15 7.66 8.94 6.71 11.25 11.94 10.59 9.92 8.68 11.38

MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333

NOTICE IBACC INVEST S.A (Voluntary Liquidation) Notice is hereby given that, in accordance with Section 138 (4) of The International Business Companies Act 2000 the above-named Company is in dissolution, which commenced on the 24th day of June, 2019. The Liquidator is Kim Thompson of Nassau Bahamas.

Kim Thompson (Liquidator)

THE TRIBUNE

Wednesday, July 3, 2019, PAGE 7

Full steam ahead for Sarkis on CCA claim

BAHA MAR RESORT FROM PAGE ONE go forward in the Supreme Court, and not in arbitration.”

The New York Appeals Court’s ruling also ensures that Mr Izmirlian’s claim will continue to be heard in a forum that is open to the public, namely the state court system, rather than being pushed into the closed setting of arbitration.

CCA, which owns downtown Nassau’s British Colonial Hilton and the adjacent Pointe project, dislikes the publicity associated with events it is anxious to put behind it. This was previously revealed in transcripts filed with the New York State Supreme Court where its attorneys expressed the company’s displeasure at continued coverage by Tribune Business.

Had the New York Appeals Court

ruled in favour of the Chinese state-owned contractor’s arbitration bid, Mr Izmirlian’s case would have been transferred out of the court and into mediation/ dispute resolution hearings that are typically held behind closed doors and thus more private. Few to no details are made public.

The appeals court judgment found that Mr Izmirlian and BML Properties had produced sufficient evidence to support their fraud allegations, while CCA’s efforts to divert the case into arbitration were based on a contract that neither the original developer nor his company were party to.

“The [state Supreme] Court correctly denied the branch of the defendants’ motion seeking to compel arbitration because plaintiff was not a party to the agreement containing the arbitration clause and the claims at issue were,

by separate agreement, required to be litigated in New York,” the threestrong appeals panel ruled.

“Plaintiff adequately stated a claim for fraud by asserting justifiable reliance on assurances alleged to have been false when made regarding the project’s status, and the workforce and resources available to meet the deadline for completion of the project, which were collateral to - and not duplicative of - plaintiff’s claims for breach of contract.”

Justice Saliann Scarpulla, in the original state Supreme Court ruling, found that Mr Izmirlian had provided enough evidence to “sufficiently plead” fraud thanks to the numerous e-mails, documents and meetings referenced. She also rejected CCA’s argument that the fraud claims duplicated the breach of contract allegation.

CCA had sought to push the case into arbitration through the mediation/ dispute resolution clause contained in Baha Mar’s construction contract. This was amended in 2016 to facilitate the $4.2bn development’s completion under the temporary ownership of the China Export-Import Bank and its Perfect Luck vehicle.

While Mr Izmirlian and BML Properties were not signatories to the 2016 deal, CCA claimed they were still bound by it because New York courts “‘frequently’ impute the intent to arbitrate to a non-signatory”.

But, finding that CCA had misinterpreted the law, Justice Scarpulla found there was no intent for BML Properties to be bound as such. And its complaints stemmed from the investors agreements, not the construction contract.

IMF QUERIES CENTRAL BANK ‘INDEPENDENCE’ OVER BOB FROM PAGE ONE Bank of The Bahamas aligns with the perception many hold.

“Strengthening the Central Bank’s governance and independence, in line with international best practices, would enhance its operational effectiveness,” the IMF’s Article IV report added. “Staff advocated the immediate adoption of the planned amendments to the Central Bank law, designed to strengthen the Central Bank’s governance and independence, clarify its operational objectives, and limit lending to the government.

“In this context, staff welcomed the progress towards the establishment of a debt management unit in the Ministry of Finance.

A debt management strategy consistent with the Fiscal Responsibility Act is important to reduce reliance on Central Bank lending to the government.

The IMF backed the Central Bank’s strategy to reduce its holdings of government securities as a means to absorb the high surplus liquidity in the domestic banking system, which currently stands at over $1.8bn.

These holdings had fallen from 6.1 percent of GDP in 2016 to 4.2 percent as at end2018, and the fund called for further reductions.

The IMF’s solvency stress tests, meanwhile, conducted on the Bahamian commercial banks and other financial institutions, also highlighted Bank of The Bahamas continued vulnerability to external shocks such as hurricanes or US recessions.

The fund’s report revealed: “While a short period of stress caused by a major hurricane would weaken banks’ performance, but not below the 17 percent target capital ratio, a US recession scenario would cause one bank with large non-performing loans and weak profitability to become undercapitalised.”

Again, such a description can only apply to Bank of The Bahamas.

Elsewhere, the IMF also urged the Central Bank to “impose corrective actions” on one of the two largest Bahamian credit unions which is currently below the ten percent ratio requirement for unweighted capital.

“Sensitivity tests for the two largest credit unions reveal significant vulnerability to credit risk,” the IMF’s financial sector assessment revealed.

“They become undercapitalised under moderate stress due to current weak capital buffers (one credit union is broadly compliant; the other is currently under the ten percent unweighted capital requirement and Central Bank should impose corrective actions) and nonperforming loans above ten percent.

“The credit unions are more resilient to credit concentration and interest rate risks than banks given their larger exposure to short-term consumer loans.”

While backing the Central Bank’s plan to introduce a digital version of the Bahamian dollar as a means to improve financial inclusion, the IMF warned it to be vigilant against potential risks to the financial system.

“Staff acknowledged that innovative technologies can help bridge gaps in the financial landscape,” the fund added. “However, the issuance of e-currency can also pose risks to financial stability, cybersecurity, and in the anti-money laundering/counter terror financing sphere.

“Staff recommended investment in human capital and technological capabilities to ensure that the pilot - and the full-scale adoption of a general purpose Central Bank digital currency - is compatible with, and complementary to, the existing financial infrastructure.”

The IMF, in its overall conclusion, added: “The Bahamas appears to be resilient to current threats to its financial stability, but action is needed to safeguard against potential weaknesses.