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FRIDAY, SEPTEMBER 28, 2018
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IDB: Poor hardest hit by fuel hikes By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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HE poorest 40 percent of Bahamian society are among the hardest hit in the Latin American and Caribbean region by any increase in fuel prices, an IDB study has found. The newly-released Inter-American Development Bank (IDB) report, which analyses the impact of energy taxes and subsidies in 11 countries, found that only Ecuador suffers a greater total “welfare loss” than low income Bahamians when gas and diesel prices rise by as little as 25 cents
and diesel imposes a relatively higher welfare cost on poorer households than on wealthier ones in every country in our sample. “The indirect effect of the price hike on the lowest quintile (20 percent of society) ranges from 0.7 percent of a household’s budget in Uruguay to over two percent in The Bahamas.” The results highlighted The Bahamas’ ever-growing vulnerability and exposure to rising, volatile global
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* Suffer ‘welfare loss’ equal to 2.5% of income * Smallest rises shrink living standards * IDB study exposes Bahamas’ fossil fuel vulnerability
per litre. Bahamians among the poorest 20 percent of society sustained a loss equivalent to 2.4 percent of their income, while those in the next-highest bracket endured a 2.5 percent decline, according to the report’s findings. “The indirect impact of gasoline and diesel price rises on household welfare tends to be regressive,” the IDB study and its five authors found. “Increasing the cost of gasoline
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oil prices as a result of its near-100 percent dependency on fossil fuels. For the 25 cent per litre rise in fuel costs was shown to result in energy cost increases that were more than three times’ higher, in percentage terms, than any other country in the Latin American and Caribbean region. The IDB study showed electricity prices in The Bahamas would increase by 36 percent in such circumstances, with
the next highest increase being Ecuador’s ten percent. Transportation costs were also forecast to rise by 7.9 percent. “Electricity is also significantly affected by the price increases, especially in the Caribbean and other countries where power generation relies heavily on petroleum products. For example, electricity prices increased by 36 percent in The Bahamas and 8.6 percent in Barbados.” Breaking household consumption down into categories, the study found that 38 percent of the impact on Bahamian society’s poorest 20 percent from such a fuel price hike was felt in
their light bill. Household services and gasoline/diesel purchases felt 16 percent and 12 percent of the impact, respectively. “In all countries except The Bahamas, Barbados, Costa Rica and Guatemala, the main vehicle through which diesel and gasoline price hikes decrease the welfare of the bottom quintile is higher public transportation costs,” the authors wrote. “In The Bahamas and Barbados, ensuing electricity price increases are the most important factor affecting the poorest households.” The study also modelled the effects of a $0.05 cents
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Disney ‘second best’ to Foundation’s retain all ‘Absolute game changer’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN Eleuthera non-profit yesterday argued that Disney’s Lighthouse Point plans are “second best” to its proposal that retains “100 percent of the land and profits for Bahamians”. Shaun Ingraham, the One Eleuthera Foundation’s (OEF) chief executive, told Tribune Business that it was prepared itself to raise the financing necessary for the Government to acquire the 700-acre property at South Eleuthera’s tip in the public interest. Emphasising that there would be no cost to the Public Treasury, Mr Ingraham called for Lighthouse Point to be developed along similar lines to the Clifton Heritage Park’s
* Non-profit: ‘We’ll keep land, profits for locals’ * Business models ‘too different’ to co-operate * Fear port security will block Bahamian access
SHAUN INGRAHAM
LIGHTHOUSE POINT, South Eleuthera. creation, where the Gov- Foundation planned to ernment acquired private place Lighthouse Point’s property to ensure a his- ownership into a trust, torical site remained where it would be held accessible for future Baha- “in perpetuity” for the benefit of all Bahamimian generations. He revealed that the ans - especially south
Activist: ‘I’ve not bought fairytale’ on Disney plans By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN environmental activist yesterday said she had “not bought the fairytale” on Disney’s plans for Lighthouse Point, and urged it to “compromise” by using an existing cruise port. Sam Duncombe, reEarth’s president, told Tribune Business that using the existing cruise dock at Princess Cay was “the obvious solution” to the controversy surrounding Disney’s plans to purchase the 700-acre site at South Eleuthera’s tip and convert “20 percent” into a beach
SAM DUNCOMBE break destination for its guests. The outspoken activist suggested that Disney could secure its “own space” at Princess Cay, also located in the South Eleuthera area, and then organise tours to take its passengers to Lighthouse Point.
SEE PAGE 6
Reformer concern: Accounts Committee loses fiscal bill role By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net GOVERNANCE reformers yesterday expressed concerns that revisions to the Fiscal Responsibility Bill could weaken efforts to hold the Government accountable for breaching financial targets. The Organisation for Responsible Governance (ORG), which has led the campaign for the bill’s passage into law, last night said it was “particularly concerned” that the Public Accounts Committee (PAC) is no longer the body responsible for this task.
Matt Aubry, ORG’s executive director, told Tribune Business that the parliamentary Standing Committee now entrusted with this task needed to be constructed along similar lines to the PAC, with an Opposition majority required to ensure the necessary “checks and balances” on the Government. He and ORG also expressed concern that their calls for the bill to have more enforcement teeth, with greater sanctions and penalties needed to deter the missing of fiscal targets and breaching the law’s
SEE PAGE 7
Eleutherans. A separate company would be established to develop the property into an ecotourism and research destination, with Bahamians given an opportunity to acquire shares in it. Mr Ingraham then expressed scepticism over Disney’s pledge that Bahamians will still have “full access” to Lighthouse Point under its “beach destination” proposal, arguing that this would likely conflict with international port security regulations
SEE PAGE 5
if bill properly enforced By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Fiscal Responsibility Bill is “an absolute game changer” for good governance if properly enforced and complied with by the public sector, a leading reform campaigner said yesterday. Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, told Tribune Business that the bill’s provisions were critical to the Government breaking “bad habits of the past” that had resulted in The Bahamas’ current “fiscal crisis”. Speaking as MPs debated the bill in the House of Assembly, Mr Myers warned that the legislation
ROBERT MYERS was “only as good” as its enforcement. He acknowledged that the Fiscal Responsibility Bill faced the same risks as other laws, which had been passed by Parliament but either never properly implemented or enforced selectively. The ORG chief, though, said The Bahamas’ precarious fiscal position of
SEE PAGE 4
PAGE 2, Friday, September 28, 2018
THE TRIBUNE
Crystal Palace set for HARNESSING TECHNOLOGY FOR TOURISM’S ADVANTAGE demolition on Monday
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HE United Nations’ World Tourism Organisation (WTO) yesterday celebrated World Tourism Day under the theme, Tourism and the Digital Transformation. The Bahamas joined the commemorative event in a bid to create greater awareness of the role that tourism plays, and can play, in revitalising the economy at large. Our local tourism training symposium focused attention on two resounding themes impacting the experience that visitors have when they hit our shores: Authenticity and Technology. As vastly different as these terms might appear, they are vital to the visitor travelling from distant lands. People expect an indigenous experience where they taste, feel, see and touch the richness of a country’s cultural offerings. Tourism plays then a pivotal role in advancing cultural
IAN FERGUSON BY
understanding and bringing people together. Tourism also needs innovation in technology to realise its potential. Governments and private enterprise can help to connect startups and fledging companies with investors to facilitate
innovation, entrepreneurship, employment and a truly inclusive tourism sector. Digital technologies have brought positive change to societies and economies around the world. They have connected us on a global level, helped to empower the most vulnerable and become our crucial allies for sustainable development. Our challenge is to continue harnessing this power for good while safeguarding against the risks. Digital technologies have the power to transform the way we travel, reduce the ecological burden of tourism and bring the industry’s benefits to all. Every day, and in all areas of our lives - tourism included - we see and use technologies which, only a couple of decades ago, we could barely have dreamed of. Digitisation and sustainable tourism are critically important in preparing us for the challenges of the
upcoming decades. Technology has helped reduce costs, enhance operational efficiency, and improve services and customer experience. Both customers and businesses can benefit from improved communication, reservations and guest service systems. Technology has helped the tourism and hospitality industries replace expensive human labour with technological labour. This helps reduce labour costs, and to avoid customer service issues. Here are two important areas where technology can enhance the business of tourism: Computer Systems Computer systems allow communication between larger hotel chains with multiple locations to connect easier. They also help keep staff on the same page, and make it easier to access information, improving the guest experience. Guest requests, housekeeping information and reservations can all be found on one system. Mobile Communications Mobile tablets and smart phones have replaced large desktop computers, making them virtually extinct. This is helpful, because many travellers take some type of mobile device with them on a trip. This helps hospitality businesses keep customers advised of changes and delays to their reservations, offer deals and advertise by using GPS tracking. The general sentiments shared at the symposium yesterday rang clear to all; technology and innovation results in success and higher levels of productivity and competitiveness. • NB: Ian R Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities. He has served organsations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at iferguson@ bahamas.com.
BAHA Mar’s owner and its contractor yesterday said they had received the necessary government approvals to demolish the former Crystal Palace resort and casino this coming Monday. A statement from Perfect Luck (No 2) Ltd, which is now owned by Hong Kong-based Chow Tai Fook Enterprises (CTFE), and Lenovo Construction, said demolition will begin at 7.30am on Monday, October 1, weather permitting. Both pledged that they “are employing best safety practices and industry standards” to protect the surrounding area, and ensure the safety of visitors, staff and the general public. The affected site was fenced off, and access restricted, with effect from today. A 500-foot safety zone will be established around the site, overseen by the authorities. Law enforcement and security officers will be stationed at security check points round-the-clock, while The Bahamas Air Sea Rescue Association (BASRA) will be patrolling the sea. Both the Melia and SLS resorts were said to be taking measures to ensure there is no impact to their ongoing operation and physical infrastructure. Winds will be monitored some 24 hours prior to the scheduled demolition, and the authorities will then make the final decision to move forward with the scheduled date or postpone due to weather conditions. On the morning of the demolition, immediate areas will be temporarily closed for safety considerations. Public access to the area, and to the beach from the Melia to the Rosewood Baha Mar, will be subject to a temporary closure and monitored by law enforcement until an all-clear notice is issued. Temporary closures also including the main entrance to the Melia Nassau Beach Resort; the ingress and egress from the SLS Baha Mar; internal roads and parking fields located near
the Baha Mar Convention Centre; Baha Mar Academy; the Baha Mar pier; Pompey Market; Taxi Stand at Pompey Market; and the Baha Mar beach. At Melia, all outdoor pool areas and beaches will be temporarily closed. All temporary closures will be reopened once the official “all clear” has been given by the local authorities. There are no anticipated impacts on public infrastructure, including roadways surrounding the Cable Beach area, with the exception of the ingress and egress to and from the Melia and the SLS Baha Mar from approximately 5am until 9.30am on October 1. For the safety of the general public, there will be no public viewing areas established. Access within the safety zone will be restricted to only those with appropriate credentials issued prior to October. The three towers will be raised in succession, beginning with the Casino Tower and followed by the Marlin Tower and Hibiscus Towers some 90 seconds later. Each demolition will take around seven seconds. During the demolition process, dust will be actively suppressed by ten large machines providing airborne mist that is designed to bond with dust particles and minimise mitigation. Following the demolition process, dust is expected to plume for a period of 15 to 20 minutes, during which time crews and heavy equipment designated for clean-up will deploy to clear the areas of dust and debris. Following the induced collapse, the site will be inspected to ensure it is safe for continued demolition activities and public entry into the established safety perimeter. Following a favourable inspection, the safety perimeter will be fully re-opened to the public and the hard demolition process will begin. This will include the fragmentation and recycling of the remaining concrete on site in conjunction with the mechanical demolition of all low-lying structures.
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THE TRIBUNE
Friday, September 28, 2018, PAGE 3
FISCAL RESPONSIBILITY TAKES EFFECT OCTOBER 1 By NATARIO MCKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net THE DEPUTY Prime Minister yesterday pledged that “gone will be the days” of reckless government spending and mismanagement as a result of the Fiscal Responsibility Bill’s passing. K Peter Turnquest told the House of Assembly that the legislation will force the Government to achieve the deficit reduction objectives it sets out, describing the “stringent fiscal requirements” as “ground-breaking but necessary” to avoid what he branded the “disastrous fiscal experience” of the Christie administration. He said the bill’s goals are to establish in law the principles and procedures of responsible fiscal management; guide the creation and implementation of fiscal policy objectives; guide the annual budget
within a medium-term fiscal framework; and facilitate effective parliamentary and public scrutiny and oversight of the Government’s fiscal performance. “An important part of the oversight mechanism for the fiscal responsibility framework is the Fiscal Responsibility Council, which will be responsible for assessing the Government’s compliance with the general principles, fiscal responsibility principles and fiscal objectives, and advising on fiscal and budgetary matters of the Government,” Mr Turnquest said. “To those ends, the bill stipulates that the Government must manage the public finances and set fiscal policy in accordance with general principles of responsible fiscal management, fiscal responsibility principles and the specific fiscal objectives and other requirements set out in the law.”
He added: “The Fiscal Responsibility Bill strives to provide a strong, depoliticised institutional framework for fiscal policy so as to ensure that no future government ever again engages in flagrantly irresponsible fiscal policies that could once more threaten the future prosperity of our nation. To this end, the proposed Fiscal Responsibility legislation contains legally binding fiscal rules that place limits on the annual fiscal balance and the debt-to-GDP ratio. “If our policymakers are to be accountable for the design and implementation of fiscal policy, then there must be mechanisms to ensure that both the public and Parliament are provided with comprehensive and timely information on the Government’s fiscal intentions and performance. “The bill, therefore, provides for regular and explicit fiscal reporting for
public and parliamentary scrutiny, and also an independent mechanism for assessment of compliance with the fiscal responsibility principles and objectives and for the provision of advice.” Mr Turnquest said the Bill also seeks to introduce the special reporting requirement of a pre-election economic and fiscal update. “As provisioned, the Minister of Finance must, no earlier than 30 working days nor later than 20 working days before polling day, arrange for such an update to be published on an official website of the Government. The Minister is also obliged to ensure that the Update is a technical and objective document,” he added. One of the key reporting obligations introduced in the bill is for the Government to prepare an annual Fiscal Strategy Report, or FSR. That report, according to Mr Turnquest, is to
Fiscal Bill ‘toothless tiger in the jungle’ By NATARIO MCKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net THE Opposition’s deputy leader yesterday slammed the Fiscal Responsibility Bill as lacking “teeth”, suggesting that if the Government was “serious” it would “entrench” the changes in the Constitution. Chester Cooper, the Exuma MP, during his contribution to the debate in Parliament said that while fiscal responsibility and accountability was to be supported, “we also want a bill that works and makes sense and isn’t just something handed down to us from international observers who know that this government will likely sway to their whims”. He added: “We want a bill
with teeth which, for practical purposes, this bill lacks. This bill will not address the issues espoused, and I don’t believe it will get to the heart of the issue. There is nothing in this bill that will stop this government from running a $1bn deficit if it wishes to do so. There is nothing in this Bill to stop this administration.” The Fiscal Responsibility Bill is intended to transform the Government’s fiscal discipline by locking it into specific deficit targets and longer-term debt ratios, while boosting transparency and accountability in the management of its financial affairs through enhanced public scrutiny. The latter role will be played by a newly-created Fiscal Responsibility Council, comprised of accounting, legal, financial analyst and business expertise from the
private sector. Mr Cooper questioned why the Government had not provided an independent economic analysis to show the bill’s fiscal targets would not be detrimental to the Bahamian economy. “In the current fiscal environment, the legislation represents a potential serious threat to the economic stability of The Bahamas fiscal model, in my view,” he added. “The Government, through its recent increase in the rate of VAT, has taken a great fiscal risk in that it may or not collect what it believes it will. “We asked for the modelling, which was never forthcoming. This bill talks about doing many things without consequences for not doing so. Legislating responsibility without consequences
is like putting a toothless tiger to police the jungle. “Whilst the attempts to create independent public review in the form of the Fiscal Responsibility Council (FRC) are laudable, proposing that the Fiscal Responsibility Council to only come into force in July 2019, the legislation is effectively delaying any action which would cause the Government to reconsider its current ill-considered fiscal policies under the advice of the FRC. “In effect, all of the reports required would not take effect until after the next budget. Meaning that the full effect would not be felt until the 2020-2021 budget, which then imposes additional deadlines for the pre-election report.”
be presented to Cabinet no later than the November 1 each fiscal year. Once approved by Cabinet, and this must occur no later than November 3, the Minister must submit the FSR to Parliament and to the Fiscal Responsibility Council. It must also be published at that point. Mr Turnquest further explained that Parliament will then debate the FSR and inform the Minister no later than January 31 of any recommendations on the report. The deputy prime minister said the Fiscal Responsibility Bill will come into force on October
1, apart from the provisions for the creation of the proposed Fiscal Responsibility Council, which come into effect on July 1, 2019, in time for the Council to review and assess the 20192020 budget. “The Fiscal Responsibility Bill seeks to secure the vital fiscal gains set out in the recent budget. We crafted the 2018-2019 budget to be fully consistent with the key principles and articulated fiscal targets of the bill, underscoring our commitment to the achievement of fiscal discipline and sound governance.,” said Mr Turnquest.
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PAGE 4, Friday, September 28, 2018
THE TRIBUNE
‘Absolute game changer’ if Bill properly enforced FROM PAGE ONE a near-$8bn national debt and $300m-plus annual deficits would help to concentrate minds and ensure compliance with the bill’s provisions given that time was running out to change course.
“That is music to my ears,” Mr Myers replied, when informed by Tribune Business that MPs were debating the bill during its second House reading. “We just hope they keep as much control and create as much accountability as possible. “This is massive. It’s a game changer, an absolute
game changer. It’s the beginning of more accountability to come. You start putting in fiscal rules, start enforcing those rules, and you start changing the culture and attitudes start to change. We’ve got to move beyond our bad habits of the past.” The Minnis administration, realising it has to fulfill
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its side of the fiscal consolidation/austerity bargain following the 12 percent VAT hike imposed in the 2018-2019 budget, views the Fiscal Responsibility Bill as central to improving governance and discipline in how the Bahamian people’s money is managed. The legislation is intended to transform the Government’s fiscal discipline by locking it into specific deficit targets and longer-term debt ratios, while boosting transparency and accountability in the management of its financial affairs through enhanced public scrutiny. The latter role will be played by a newly-created Fiscal Responsibility Council, comprised of accounting, legal, financial analyst and business expertise from the private sector. Mr Myers yesterday praised the Government for following through on previous pledges of fiscal responsibility, but he added that it now needed to follow through and “make it happen” once the legislation is passed by Parliament and given effect. “Laws are only as good as their enforcement. That’s a big part of it,” he conceded. “There’s no point in writing laws unless you’re going to police and enforce them, and you have to do so equitably. That’s a big concern given that we have an inclination be somewhat lawless in certain sectors. “We’ve got to make sure
the public sector adheres to these regulations, and is trained also to meet and follow them. That’s going to take some effort.” Public sector buy-in, especially at the senior and management levels in the civil service, is critical if The Bahamas is to halt, then reverse, the growth in its national debt and ultimately eliminate annual fiscal deficits. Civil servants under the Westminster model are typically resistant to budget cuts and intensive fiscal discipline, which they see as undermining their authority, but Mr Myers yesterday expressed doubts this would happen here due to the gravity of The Bahamas’ fiscal situation. “The biggest club or driver of this is the stark reality of a growing fiscal crisis,” he told Tribune Business. “I don’t think that’s going to be the case as there is no more headroom. We can’t ignore it any more. “If we ignore it we are going to run into the IMF, just like Barbados, Jamaica, Haiti and countless Caribbean countries have done. ORG’s advice has always been that we do it [fiscal consolidation’ while we still can; while we’re in the driver’s seat. “If we keep slipping this becomes a bigger and bigger problem that’s going to weigh on the economic situation of the country, and taxes are going to increase if we don’t correct this problem. Government spending is out of control and needs to be corrected. We need laws that govern and make the public sector, and politicians, as accountable as citizens.” The Fiscal Responsibility Bill’s key targets require the Government to slash the
fiscal deficit to 0.5 percent from 2020-2021 onwards, cutting it from a sum equivalent to 5.8 percent of GDP in the 2016-2017 budget year. This means reducing it from near $700m to around $54m over a four-year period. The bill’s “first schedule” sets out a “glide path” or “road map” for achieving this, acknowledging - as the IMF stated - that “significant fiscal adjustments” are needed over the next two budget years to hit this objective. To enable the public sector and wider Bahamian economy “to achieve the fiscal objective in an orderly manner”, and avoid unnecessary shocks, the bill calls for 2018-2019 and 20192020 deficits that “shall not exceed” 1.8 percent and one percent of GDP, respectively. The first target is what the Government is going for this coming fiscal year, aided by the VAT hike. The bill allows for a “compliance margin” equivalent to 0.5 percent of GDP in relation to the deficit target, which means that the Government will not have to produce a “fiscal adjustment plan” if its annual “red ink” is within this figure. The bill also sets out a “long-term” target of reducing the Government’s direct debt-to-GDP ratio from the current 58 percent to “no more than 50 percent”. The year by which this target is to be achieved has to be set out in the Government’s “fiscal strategy report”, which must be submitted to Parliament no later than the third week of November each year. Government spending growth rates are also not to exceed the growth of nominal GDP.
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THE TRIBUNE
Friday, September 28, 2018, PAGE 5
Disney ‘second best’ to Foundation’s retain all FROM PAGE ONE imposed following the September 11 terror attacks. While conceding that Disney was the leading cruise line on environmental protection, conservation and corporate responsibility, the Foundation’s chief executive said it would be impossible for the two parties to work together “because our business models are so different”. “The main thing is Bahamian ownership of the land; all 700 acres,” Mr Ingraham told Tribune Business, comparing the competing Disney and Foundation proposals. “They’re saying they’re giving back 170 acres; we’re saying we’re giving back 700 acres. “All profits from a nonprofit organisation go back to the people. A trust would be set up to hold the land, and a separate company set up to develop the land. Bahamians would be able to buy shares in that company. “One Eleuthera Foundation is calling for 100 percent of the land to be returned to Bahamians, and 100 percent of the profits to stay in The Bahamas. That’s the two big takeaways for us. It’s about ownership, and where the profits are going. Disney’s plan is second best, third best to where we want to go.” Disney’s big advantage, though, is that it has an existing sales agreement on place with Lighthouse Point’s owner to acquire the 700-acre property, while the One Eleuthera Foundation does not. For the latter to succeed, the Government would have to turn down the cruise line’s project and likely acquire the property itself to protect it from other potential developers.’ Mr Ingraham yesterday promised that this will not cost taxpayers a single cent, as the Foundation would
seek to raise the necessary financing itself from wealthy philanthropists and donors, some of whom are Eleuthera-based second home owners and investors. “We’d be prepared to raise the funding so it doesn’t come out of the Public Treasury,” he told Tribune Business. “The One Eleuthera Foundation is prepared to raise the money to do that. “We could the land into a public trust that is held in perpetuity for the Bahamian people, so that all the residual profits go back into the community to build schools, hospitals and the rest, and go into public infrastructure. “With Disney, they will take the profits and give it straight back to their shareholders. Heaven forbid if this port does not work out; they could just abandon it. If we’re ever going to own our own economy this type of jewel property needs to be opened up for Bahamians to leverage.” Mr Ingraham said Lighthouse Point’s fate had been a concern to the Foundation for the past decade, but its own efforts to acquire the site had been rebuffed. He identified the current owners, and sellers to Disney, as The Related Group, headed by billionaire Jorge Perez. Research by Tribune Business uncovered a 2008 press release announcing a joint venture between The Related Group and Meritage Hospitality Group for an 884-acre site in south Eleuthera that was previously owned by Bahamian businessman, George Baker. The release, complete with a photo with thenprime minister, Hubert Ingraham, said “approval in principle” had been given by the Government for their plans, which were likely ended by the ‘credit crunch’ and subsequent global recession.
“We’ve been at this for ten years,” the Foundation’s Mr Ingraham said yesterday. “We made an offer six to seven years ago when it was under Coldwell Banker Lightbourn Realty. For the last four years it was taken over by HG Christie. “Since then we’ve had an additional supporter, a philanthropist, come on board to give us the financial backing we need. At one point they did reach out to the vendor but it was not received positively.” Mr Ingraham added that Disney had reached out to the Foundation several months ago over its plans, but then “withdrew the offer”. He said it had been working through the US Embassy in Nassau to arrange meetings with key Eleuthera stakeholders, including the Bahamas National Trust, the Island School and his chairman, Alfred Sears QC. Disney has pledged that Lighthouse Point will remain fully open to all Bahamians under its ownership, with the lighthouse and southern tip off-limits to both its guests and further development. The cruise line also told Tribune Business this week that its passengers will be free to explore off-property, and undertake historical, cultural and adventure tours on Eleuthera. These promises suggest a Disney-controlled Lighthouse Point will be completely unlike the typical exclusive private island cruise port, but Mr Ingraham expressed scepticism as to whether it will fulfill such pledges.
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“They’re saying they’re going to leave it open, but with the International Ship and Port Security (ISPS) regulations, there’s no way they’re going to be able to do that,” he told Tribune Business. “Later on, we’re afraid they’re going to say: ‘Oops, we made a mistake. We can’t do that.” Mr Ingraham was similarly unconvinced about Disney’s pledge to work with Eleuthera-based tour operators and attraction providers, suggesting few were in position to respond. He expressed fears that such contracts, and many of the 150 permanent jobs touted by the cruise line, would go to Nassau-based operator and workers as well as expatriates. “There’s very few tour operators in south Eleuthera to carry that capacity,” he told Tribune Business. “The challenge is that everything
is under-resourced. You have one or two companies. How are they going to upgrade their fleet, their vehicles, and purchase the necessary insurance. “They make it sound easy, but this area has been in recession for 40 years. These are not very sophisticated people able to go to the bank and get a loan to start a tour company. The people have to grow with the economy. The people and economy have to grow together.” Mr Ingraham said Eleuthera would lose its “second most visited spot” after the Glass Window Bridge should Lighthouse Point become non-accessible to Bahamians. He added that the One Eleuthera Foundation’s rival proposal called for the area surrounding the property to be divided into three zones, with a $14m
investment earmarked to strengthen nearby communities such as Bannerman Town. The second “zone” will be economic, focused on eco-tourism and research centres, which Mr Ingraham said will create “200 jobs alone”. He added: “What we’re saying to the Government is that this is a good opportunity, if they’re serious, to switch the economy to a more ‘heads in beds’, more sustainable tourism model. “The Government has to zone the property for sustainable development, and we want to be able to go back like they did with the Clifton Heritage site. The Government purchased it, as it was so sensitive, and we’re looking at a similar thing where the owner is compensated for fair market value.”
PAGE 6, Friday, September 28, 2018
THE TRIBUNE
Activist: ‘I’ve not bought fairytale’ on Disney plans FROM PAGE ONE It is unclear whether Disney would be able to use Princess Cay, given that the property belongs to a rival cruise line, or whether there would be sufficient space to accommodate the 2,700-4,000 passengers that typically use its vessels. But, responding to Disney Cruise Line’s media offensive over its Lighthouse Point plans, Mrs Duncombe said she had “absolutely not” altered her views on the project despite its pledges to maintain “full access” to the property for Bahamians, together with 150 permanent jobs and opportunities for Bahamian entrepreneurs. She, like the One Eleuthera Foundation’s Shaun Ingraham (see other
article on Page 1B), argued that Disney would be unable to fulfill its public access promises because of global port security regulations it has to comply with following the September 11 terror attacks. And the reEarth president said The Bahamas needed no more private cruise destinations on the basis that this was a model where the majority of the economic benefits were retained by the lines themselves rather than Bahamian businesses and employees. “I’ve not bought the fairytale,” Mrs Duncombe told Tribune Business. “I’ve been in this long enough to know developers will say anything to get in. They’ll [Disney] say they have to block off access because
NOTICE NOTICE is hereby given that NOLA JOY RICHARDS KNOWLES, of P. O. Box General Delivery, Lowe Sound, North Andros, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 28th day of September, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.
after September 11 all these security restrictions were implemented, and they have to follow the rules.” Disney, in a presentation on its project, acknowledged that continued public access to Lighthouse Point needed to be balanced with the International Ship and Port Security (ISPS) regulations, bit did not see this as an insurmountable obstacle. Yet Mrs Duncombe reiterated: “I don’t see how Disney bypasses these security issues with people willy nilly accessing this area. “I do not believe we’re going to be let in. They’ll do it for a couple of months, then close the place and lock us out.” The reEarth president said such security restrictions apply at Princess Cay, where only staff and passengers are allowed in. She argued that Disney was trying to exploit “a community that is economically depressed” with promises to create 150 permanent jobs, and another
100 in the construction phase, knowing that south Eleuthera was desperate for job-creating economic activity. “We need to start moving away from private cruise ports. They don’t benefit the local economy; they benefit the cruise companies,” Mrs Duncombe told Tribune Business. “Disney knows that. “I think the cruise industry in and of itself is way out of whack. Seventy-five percent of our arrivals are cruise passengers, but they only contribute 11 percent of the tourist spending. I think the tail is wagging the dog. “They [Disney] know the community in south Eleuthera has been screwed by the Government for 60 years with the same development model that has crashed and burned. That’s left people frustrated, and I get why some people in south Eleuthera want this cruise port, but just because Disney tells
NEW YORK Associated Press AFTER four days of modest losses, Apple and Amazon led the US stock market to small gains on yesterday. Internet and health care companies rose while mining companies fell with metals prices.
Apple and Amazon are the two most valuable US companies, and analysts said each stock should keep climbing. Other market favorites including Facebook and Google parent Alphabet also rose. Interest rates slipped for a second day, which led to losses for banks, while the
NOTICE
Notice is hereby given that Sonia Simeon Garcon of #44 Strafford Way, South Bahamia, Freeport, Grand Bahama, Bahamas is applying to the Minister responsible for nationality and Citizenship, for Registration/Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written signed statement of the facts within twenty-eight days from the 28th September, 2018 to the Minister responsible for Nationality and Citizenship, P.O.Box N7147, Nassau, The Bahamas.
Notice is hereby given that CHERISNORD CHERY of peach Street,Nassau, The Bahamas is applying to the Minister responsible for nationality and Citizenship, for Registration/Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written signed statement of the facts within twenty-eight days from the 28th September, 2018 to the Minister responsible for Nationality and Citizenship, P.O.Box N7147, Nassau, The Bahamas.
MARKET REPORT THURSDAY, 27 SEPTEMBER 2018
t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com
BISX ALL SHARE INDEX: CLOSE 1,947.00 | CHG -2.18 | %CHG -0.11 | YTD -116.57 | YTD% -5.65 BISX LISTED & TRADED SECURITIES 52WK LOW 3.50 19.17 7.50 3.32 0.90 0.15 2.30 8.55 6.09 3.53 9.00 2.30 1.40 7.25 6.00 9.75 5.67 3.25 12.50
1050.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
PREFERENCE SHARES
1.00 103.00 100.00 106.00 105.00 103.00 100.00 10.00 1.01
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 E Commonwealth Bank Class J Commonwealth Bank Class K Commonwealth Bank Class L Commonwealth Bank Class M Commonwealth Bank Class N Fidelity Bank Class A Focol Class B
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 ##########
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
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ 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 3.51 17.43 9.09 4.46 1.01 0.19 2.30 9.22 6.16 3.63 12.42 2.79 1.75 7.50 6.21 13.20 6.35 3.65 13.01
CLOSE 3.51 17.43 9.09 4.46 1.01 0.19 2.30 9.22 6.16 3.60 12.42 2.74 1.75 7.51 6.21 13.20 6.35 3.65 13.01
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.03 0.00 -0.05 0.00 0.01 0.00 0.00 0.00 0.00 0.00
1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 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
107.34 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
-0.10 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 100.00 107.44 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
VOLUME
400 5,840
250
VOLUME
EPS$ 0.268 0.932 -0.306 0.317 0.059 0.000 -0.996 0.700 0.441 0.154 0.627 0.102 0.231 0.000 0.670 0.701 0.719 0.277 0.631
DIV$ 0.100 1.130 0.000 0.230 0.000 0.010 0.000 0.710 0.220 0.120 0.620 0.060 0.070 0.084 0.280 0.500 0.200 0.120 0.590
P/E 13.1 18.7 N/M 14.1 N/M N/M -2.3 13.2 14.0 23.4 19.8 26.9 7.6 N/M 9.3 18.8 8.8 13.2 20.6
YIELD 2.85% 6.48% 0.00% 5.16% 0.00% 5.26% 0.00% 7.70% 3.57% 3.33% 4.99% 2.19% 4.00% 1.12% 4.51% 3.79% 3.15% 3.29% 4.53%
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% 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%
MATURITY 19-Oct-2022 ############### 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
MUTUAL FUNDS 52WK HI 2.17 4.16 2.01 180.30 157.58 1.57 1.70 1.65 1.10 6.99 8.54 6.15 10.52 11.46 10.46 10.00 8.45 11.20
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.51 1.62 1.59 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 2.17 4.14 2.01 180.30 155.10 1.57 1.68 1.65 1.09 7.36 8.53 6.50 11.41 11.66 10.41 9.93 8.45 11.20
YTD% 12 MTH% 2.24% 4.15% 0.03% 4.59% 1.23% 2.26% 0.90% 3.44% 1.11% 6.05% 2.50% 4.38% -0.75% 3.51% 1.75% 4.07% -0.52% 1.03% -1.08% 1.77% -5.96% -3.05% 1.90% 4.59% 7.24% 11.96% 2.77% 3.88% 3.94% 4.69% -0.61% 0.75% 1.13% N/A 2.95% N/A
NAV Date 31-Jul-2018 31-Jul-2018 27-Jul-2018 30-Jun-2018 30-Jun-2018 31-Jul-2018 31-Jul-2018 31-Jul-2018 31-Jul-2018 31-Aug-2018 31-Aug-2018 31-Aug-2018 31-Aug-2018 31-Aug-2018 31-Aug-2018 30-Jun-2018 30-Jun-2018 30-Jun-2018
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
and with Government have enabled us to further refine our plan from where it started so that we could get to the point of submitting a formal proposal.” Mrs Duncombe, though, told Tribune Business: “We can’t sacrifice this crown jewel in Eleuthera so that Disney makes so much money. The compromise is very obvious to anybody. “They can dock at Princess Cay and create their own space. Why would we give up such an incredibly special place so that a handful of people can enjoy it? I would like to say that if Disney is truly concerned about sustainable environmental practices they would dock at Princess Cay in south Eleuthera, where there is a dock that already exists and the area is already impacted. “Why go somewhere pristine and screw it up? There is a Plan B. Dock at Princess Cay or go home. That’s kind of it.”
US stocks break four-day losing skid as Apple, Amazon climb
NOTICE
52WK HI 4.50 19.17 7.50 4.46 1.26 0.19 3.92 9.22 6.60 5.30 12.50 2.71 1.77 8.21 6.21 13.20 7.00 4.50 13.50
them 150 jobs are available doesn’t mean all the jobs go to Bahamians.” Disney’s plans for Lighthouse Point do not seemingly follow the model of a private, exclusive cruise port destination. The cruise line yesterday reiterated that if the project was approved calls to The Bahamas would “nearly double”, inclusive of a 40 percent increase in calls to Nassau. It also said it was not suggesting the Government bore responsibility for the “information vacuum” that developed around the project, adding that it was “trying to be respectful of the Government process for this type of investment, and to Bahamians more generally, and it was important to talk with the people of Eleuthera first as part of that process before talking about this project more broadly from a public perspective”. Disney said: “Those conversations in Eleuthera
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
stronger dollar weighed on metals prices and on shares of the companies that mine those metals. Smaller companies, which have struggled in September, also fell. Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute, said investors have been reluctant to get back into the stock market since the 200809 recession, and there are signs that’s changing. “Retail investors have been underinvested for this whole expansion,” he said. “The economy is decent. The market is correctly pricing in a relatively low possibility of an all-out trade war.” The S&P 500 index rose 8.03 points, or 0.3 percent,
to 2,914. Despite its recent losing streak, the benchmark index is up more than seven percent since the end of June. With one day left in the third quarter, the S&P 500 is on track for its best quarter since the end of 2013. The Dow Jones Industrial Average gained 54.65 points, or 0.2 percent, to 26,439.93. The Nasdaq composite climbed 51.60 points, or 0.6 percent, to 8,041.97. The Russell 2000 index of smaller-company stocks dipped 1.08 points, or 0.1 percent, to 1,690.53. Apple rose after JPMorgan Chase analyst Samik Chatterjee said the stock could climb another 20 percent by the end of next year.
PUBLIC NOTICE
INTENT TO CHANGE NAME BY DEED POLL
The public is hereby advised that I, LEOTHA WHILEY of the Eastern District of New Providence, Bahamas, intend to change my name to LEOTHA WHYLLY. 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.
NOTICE Notice is hereby given that RICHARDSON LUBIN of Sandilands Village, New Providence, The Bahamas is applying to the Minister responsible for nationality and Citizenship, for Registration/Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written signed statement of the facts within twentyeight days from the 21st September, 2018 to the Minister responsible for Nationality and Citizenship, P.O.Box N7147, Nassau, The Bahamas.
NOTICE Notice is hereby given that ARODE MONPREVILLE of Alexandria Road off, Carmichael Road, Nassau, The Bahamas is applying to the Minister responsible for nationality and Citizenship, for Registration/Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written signed statement of the facts within twenty-eight days from the 21st September, 2018 to the Minister responsible for Nationality and Citizenship, P.O.Box N7147, Nassau, The Bahamas.
NOTICE Notice is hereby given that CLODER ST. FLEUR of Central Pines, Dundas Town, Abaco,The Bahamas is applying to the Minister responsible for nationality and Citizenship, for Registration/Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written signed statement of the facts within twentyeight days from the 21st September, 2018 to the Minister responsible for Nationality and Citizenship, P.O.Box N7147, Nassau, The Bahamas.
THE TRIBUNE
Friday, September 28, 2018, PAGE 7
REFORMER CONCERN: ACCOUNTS COMMITTEE LOSES FISCAL BILL ROLE FROM PAGE ONE provisions. “Given The Bahamas’ poor history of compliance with similar reporting laws, such as public disclosure, ORG continues to express concern that without methods of enforcement there is a risk that the Fiscal Responsibility Bill could ultimately be ineffective despite its thorough reporting mandates and methodically outlined goals,” the group said. “ORG holds that measures in the tabled legislation don’t sufficiently discourage breaches of Fiscal Responsibility, rectify errant behavior and encourage compliance.” Nevertheless, Mr Aubry said a Ministry of Finance memorandum issued on September 24 detailed 13 “meaningful adjustments” to the bill as a result of recommendations from the Central Bank, Bahamas Chamber of Commerce and ORG prior to its debate
in the House of Assembly yesterday. He added that the Ministry also provided a “rationale and explanation” for accepting or rejecting recommended changes, leading ORG to describe the process as “a benchmark for the future” in terms of public consultation on key legislative initiatives. Turning to the differences between the initial draft and final version of the Bill tabled in Parliament, Mr Aubry told Tribune Business: “What was notable was the elimination of the role of the PAC. “The PAC was to act if there was a breach or change considered to anything. It now has to come before the full Parliament, not the PAC. The challenge with that is you have the majority of MPs attached to the Cabinet or governing party. It doesn’t really provide the appropriate level of checks and balances.” The Ministry of Finance
and the Attorney General’s Office, in their September 24 response, said the change was made because this was not considered to be the PAC’s role. Instead, they suggested a Standing Committee could be appointed by Parliament to fulfill this role. “It would need to pretty much mirror what the PAC looks like so the Opposition has a majority,” Mr Aubry told Tribune Business of the standing committee’s membership, “and so there’s a counterpoint if there’s a breach. There’d be a proper level of oversight.” ORG, in its statement, said: “ORG notes the removal of the Public Accounts Committee (PAC) in favour of Parliament as a measure of accountability. This is particularly concerning, given the current composition of Parliament has a majority of members holding Cabinet positions and thus are bound by mandatory cabinet allegiance.
IDB: Poor hardest hit by fuel hikes FROM PAGE ONE per kilowatt hour (kWh) increase in electricity prices themselves. This found that the poorest 20 percent of Bahamian society would
suffer a welfare loss equivalent to 1.5 percent of their income, and those in the next bracket up a 1.4 percent loss. This illustrates how even the smallest increase in energy costs results in a cut
to living standards, purchasing power and disposable income among those segments of Bahamian society least able to afford it. Those on higher incomes are better able to absorb the impact.
GN-2105
“We take note of the recommendation within the Ministry of Finance response memo of September 24 that a Standing Committee could serve a similar function as the PAC, and urge that the formation of this committee be established as a priority and that the composition of any such body be similar to that of the PAC to mitigate political/partisan influence.” ORG also added that it was “disappointed to see” that the final version of the Fiscal Responsibility Bill allows the prime minister, after consultation with the Opposition’s leader, to determine who chairs the Fiscal Responsibility Council. This body will act as an advisor to the Government,
and earlier versions of the bill had allowed its members to elect the chairman. “This can be easily interpreted as a political appointment and represents a step away from the spirit and intent of the Council. ORG appeals with the Government to reconsider this structure,” the group said. Addressing other concerns, ORG said it “questions the removal of language stating that ‘the pre-election Economic and Fiscal Update should not receive prior approval of or notice to the Cabinet’, as this eliminates one of the elements that ensures the pre-election report remains free from political influence (or the perception thereof). “Additionally, the shift
of the responsibility of the pre-election report from the financial secretary to the minister, who is required to report and align with Cabinet, would seem to take away an additional check toward objectivity. ORG calls for reconsideration on these points,” it added. Still, ORG recognised the more “proactive” role granted to the Fiscal Responsibility Council and other related reforms, saying: “These protocols clearly recognise the importance of maintaining the independence of this body to make critical and objective assessments of the Government performance against the Fiscal Responsibility Bill.”
PAGE 8, Friday, September 28, 2018
THE TRIBUNE
SEC seeks to oust Tesla CEO Elon Musk over go-private tweet DETROIT Associated Press US securities regulators are asking a federal court to oust Tesla Inc’s Elon Musk as chairman and CEO, alleging in a complaint that he committed securities fraud with false statements about plans to take the company private. The Securities and Exchange Commission says in the complaint filed yesterday that Musk falsely claimed in an Aug 7 statement on Twitter that funding was secured to go private at $420 per share, a substantial premium over the price at the time. The complaint filed in US District Court in Manhattan says that Musk had not discussed or confirmed key deal terms including price with any funding source. It also asks for an order enjoining Musk from making false and misleading statements along with repayment of any gains as well as civil penalties. “Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders,” Steven Peikin, co-director of the SEC’s Enforcement Division, said in a statement. “An officer’s celebrity status or reputation as a technological innovator does not give license to take those responsibilities lightly.” An SEC press release says the agency asked the court for a “bar prohibiting Musk from serving as an officer or director of a public company”. Musk, in a statement issued by Tesla, called the SEC action unjustified. “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way,” the statement said. The complaint alleges that Musk’s tweet harmed investors who bought Tesla stock after the tweet but before accurate information
SPACEX founder and chief executive Elon Musk speaks after announcing Japanese billionaire Yusaku Maezawa as the first private passenger on a trip around the moon in Hawthorne, Calif. US securities regulators have filed a complaint against Musk alleging that he made false and misleading statements about plans to take the company private in August. Photo: Chris Carlson/AP about the funding was made public. Ousting Musk, who has a huge celebrity status with more than 22 million Twitter followers, would be difficult and could damage the company. He’s viewed by many shareholders as the leader and brains behind Tesla’s electric car and solar panel operations. Peter Henning, a law professor at Wayne State University and a former SEC lawyer, said Musk is among the highest-profile CEOs in recent memory that the commission has gone after with this stiff of a penalty threat. “You’ve got one of the iconic CEOs of the day who is being threatened with removal from office. They can’t strip of him of his shares but they can keep him out of the C-suite,” Henning said. Joseph Grundfest, a professor at Stanford Law School and former SEC commissioner, said Musk will likely want to settle before trial so that he could conceivably stay on as CEO, with some constraints such as prohibiting him from making public statements without supervision. But Musk also could agree to step down as CEO and instead take another title, such as chief production officer. “One possibility could be to appoint someone as a monitor over all of his communications. He wouldn’t
be able to tweet or post anything directly without the approval of a chaperone,” Grundfest said. “He is not going to be able to remain as CEO with no conditions. That is not on the table.” Grundfest also said that the challenge for the SEC is to “appropriately discipline Musk while not harming Telsa’s shareholders.” According to the complaint, Musk met with representatives of a sovereign investment fund for 30 to 45 minutes on July 31 at Tesla’s Fremont, Calif, factory. Tesla has identified the fund as Saudi Arabia’s Public Investment Fund, which owns almost five percent of the company. Fund representatives expressed interest in taking Tesla private and asked about building a factory in the Middle East, Musk told the SEC. But at the meeting, there was no discussion of a dollar amount or ownership stake for the fund, nor was there discussion of a premium to be paid to Tesla shareholders, the complaint said. Musk told the SEC that the lead representative of the fund told him he would be fine with reasonable terms for a go-private deal. “Musk acknowledged that no specific deal terms had been established at the meeting and there was no discussion of what would or would not be considered reasonable. Nothing was exchanged in writing,” the complaint stated.