07032020 BUSINESS by tribune242

business@tribunemedia.net

FRIDAY, JULY 3, 2020

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Court to supervise Cavalier’s wind-up ‘Beyond egregious’: LEONARD SANDS

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

CAVALIER Construction’s liquidation was yesterday placed under Supreme Court supervision after the 64 year-old contractor’s insolvency was confirmed. Once one of The Bahamas’ largest and bestknown contractors, its winding-up under judicial oversight was approved by during a hearing before Justice Ian Winder given that its cash and other assets are insufficient to pay all creditors what they are owed.

• Contractor’s insolvency confirmed • FirstCaribbean is secured creditor • Head office, equipment key to recovery

Andrew Davies, the Crowe (Bahamas) partner and accountant, who is acting as Cavalier’s liquidator, confirmed the contractor’s insolvency in the winding-up petition that was filed with the Supreme Court on March 3, 2020. The hearing to place it under the court’s supervision was supposed to have taken place on March 24, but was delayed by the

COVID-19 lockdown. Cavalier’s directors and management resolved that the company be wound-up on February 18, 2020, at an Extraordinary General Meeting (EGM) at Cafe Channing Noelle in Caves Village. Those present included Donald Thompson, president of Cavalier’s and Bobcat Bahamas’ parent, the Galaxy Group of

Companies; Martin Todd, Cavalier’s managing director and Galaxy vicepresident; Vernon Wells, Galaxy’s vice-chairman, and Sharon Ryan as company secretary. The EGM took place almost one month after Tribune Business revealed on January 20 that Cavalier was closing down

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Bungled Netflix trade to cost Ansbacher $317k By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ANSBACHER (Bahamas) has been ordered to pay $317,000 in lost profits to a UK investor over a bungled Netflix share trade he claims cost him his townhouse. Justice Indra Charles, in a June 22, 2020, verdict, found that the financial services provider guilty of “gross negligence” in failing to properly investigate what had happened to Steven Chromik’s 4,000 Netflix shares after being alerted to potential problems with the transaction. She ruled that Ansbacher (Bahamas), whose parent is the AF Holdings (formerly Colina) financial group, “fell markedly below the standard expected of a professional and competent

• Court finds it guilty of ‘gross negligence’ • UK investor says saga cost him his house • Bank and local UBS arm blamed each other

PHILIP BRAVE QC bank” by failing to perform its own checks after UBS (Bahamas) informed it just 50 percent of Mr Chromik’s holding had been sold. All 4,000 were supposed to have been disposed of on August 26, 2011, but Mr

Bahamas First provides $65m boost to BISX By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMAS First yesterday delivered a $65m boost to the Bahamas International Securities Exchange (BISX) by becoming the first general insurer to list on it. Patrick Ward, pictured, Bahamas First’s president and managing director, told Tribune Business it had finally decided “the benefits of the listing outweigh any potential downside” after finally adding its ordinary and preference shares, as well as its bond, to the exchange. Bahamas First, whose

Govt eyes SPV for agriculture funding By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE government is eyeing the creation of a special purpose vehicle (SPV) that will raise and channel financing towards agriculture, a Cabinet minister said yesterday. Michael Pintard, minister for agriculture and marine resources, told Tribune Business that the government is working with the financial services industry to develop a structure that can capture private sector funding for Bahamian farmers. “We are working with some members of the financial services community

securities will begin trading on the exchange as of today, has been mulling its move from the over-the-counter (OTC) market for several years. Mr Ward said BISX listing will aid its 255 existing shareholders by providing greater

SEE PAGE 5 in order to create an agricultural fund to create substantial funding that will be raised from the private sector,” Mr Pintard said. “We are working with some very talented people out of the private sector, and I hope to carry a paper to Cabinet in the month of July. One of the finance papers has already been submitted, and we are just waiting for it to make the agenda. “The second one will actually have the structure of the SPV that we are setting up in order to go to market to raise capital. We have a tremendous amount of unused land that we can use to leverage in order to raise capital.” Mr Pintard predicted that the Bahamian agriculture sector will see more “inward flows of capital or investment” by July 2021.

Chromik was only informed he was still the beneficial owner of 2,000 more than one month later as Ansbacher and UBS blamed each other for the error. The self-employed property analyst and investor was only able to liquidate his remaining Netflix holdings almost nine months later in early May 2012, by which time the share price had crashed from $232.94 to $74.25 - a decline that cost him $316,681. Justice Charles’ judgment reveals that Mr Chromik and Ansbacher (Bahamas) spent much time agonising over whether to include UBS (Bahamas) as a defendant

or third-party to the action, with the latter variously described as having performed the role of “broker”, “agent and custodian” and “independent contractor”. Ansbacher (Bahamas) initially blamed UBS’ “negligence” for the UK investor’s trading loss, which the latter denied, but it ultimately abandoned its attempt to add the Swiss-owned bank’s Bahamian subsidiary as a “third party” so it would be “indemnified” if it was held liable for the loss. Philip Davis QC, the opposition’s leader and Mr Chromik’s attorney, said the

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STEPHEN WRINKLE

Ex-contractor chief hits Mexican arrival By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE government’s decision to permit a major Abaco resort to bring in more than 100 Mexican construction workers was yesterday branded as “beyond egregious”. Leonard Sands, the Bahamian Contractors Association’s (BCA) immediate past president, told Tribune Business “it vexes my soul” to see so many foreign workers imported at a time when thousands of residents are unemployed due to the combination of Hurricane Dorian and COVID-19. Criticising the association for “not raising the red flag” in objection to this more strongly, he added that the government should have halted Baker’s Bay Golf & Ocean Club’s plans without needing to even review its original decision given The Bahamas’ current economic circumstances. Pointing out that neither Baker’s Bay nor the government have ever justified the need for so many work permits, Mr Sands argued that 90 percent of the wages received by the Mexicans will immediately be remitted home and never circulate in the Bahamian economy. Insisting that the Bahamian workforce can supply workers with the same skills, and in sufficient quantity, to match those of the

Mexicans, the former Association president asked: “When will the skilled Bahamian workers have an opportunity to earn a wage in the Commonwealth of The Bahamas?” However, he was somewhat contradicted by Stephen Wrinkle, another ex-BCA president, who told Tribune Business that the controversy surrounding the Mexicans’ arrival stemmed from The Bahamas’ own failure to properly manage, train and develop its construction industry. He argued that the government’s failure to mandate joint venture partnerships between Bahamian contractors, and their foreign counterparts and developers, meant that the necessary skills and knowledge needed to participate in work on major foreign direct investment (FDI) was not being transferred to locals. Mr Wrinkle said this ultimately created “a Catch 22” where foreign developers were unable to find an adequate supply of the skills they needed in The Bahamas, resulting in them importing expatriate labour. And he identified “another aspect” as being that lowercost Mexican, Chinese and Filipino workers typically “out-produce” Bahamians, with the absence of joint

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