business@tribunemedia.net
TUESDAY, NOVEMBER 28, 2017
$4.25
$4.29
$4.50
QC predicts ‘shockwaves’ in GB Power buy-out fight By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
* Local shareholder bids to quash approvals * Action ‘strikes at root’ of Gov’t processes * Claims deal contrary to Electricity Act
A
prominent QC yesterday predicted that his legal challenge to the GB Power buy-out will “send shockwaves through the foreign investor community”. Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business his long-awaited Judicial Review action “strikes at the very root” of how the Government issues approvals and permits to overseas investors. Legal papers, filed with the Supreme Court yesterday on behalf of Mr Smith’s company, SeSaChe, are seeking to quash the approvals that gave Emera the go-ahead to buy-out GB Power’s minority Bahamian shareholders. SeSaChe, which has to obtain the Supreme Court’s
FRED SMITH permission to launch Judicial Review proceedings, is alleging that the Bahamas Investment Authority (BIA) and Central Bank approvals are “ultra vires, irrational and procedurally unfair”. The company, which holds $300,000 worth of shares in BISX-listed ICD Utilities, the holding vehicle for 50 per cent of GB Power’s equity, is also seeking court Orders to block the Government from approving the buy-out
BILL’S $250,000 THRESHOLD ‘INEQUITABLE’ FOR BAHAMIANS By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Commercial Enterprises Bill must not operate “to the detriment of Bahamian businesses”, the Chamber of Commerce’s chief executive warned yesterday, while rejecting claims it undermines ‘Bahamianisation’. Edison Sumner told Tribune Business that the Government needed to ensure Bahamian-owned companies could compete on a ‘level playing field’ with foreign rivals, and be able to access the same incentives - especially the ‘fast track’ work permit approvals - provided for in the Bill. While backing the legislation’s progressive and innovative intent, Mr Sumner said the Minnis administration was looking for “volume and quality” in attracting foreign-owned businesses to domicile in the Bahamas through reducing the minimum investment threshold to $250,000.
* NEW LEGISLATION ‘CAN’T BE TO LOCAL DETRIMENT’ * BUT NOT UNDERMINING BAHAMIANISATION The Government is hoping it may attract an eventual Google or Microsoft-type technology firm to base themselves in the Bahamas as a start-up, but the Chamber chief executive warned that the $250,000 threshold may be “inequitable” when set alongside the challenges Bahamian companies have to overcome. The Bill’s passage through the House of Assembly has provoked near-hysteria in some political quarters, with former PLP chairman and Cabinet minister, Bradley Roberts, branding it “the death of Bahamianisation” amid fears that a wave of foreign workers and companies will push out
SEE PAGE 4
without first consulting Bahamian shareholders and other “stakeholders”, such as the Grand Bahama Port Authority (GBPA). It is arguing that since the BIA is not created by law it has “no authority over the personal shares owned by Bahamian citizens”, and thus has “no power” to approve Emera’s purchase of SeSaChe’s shares. Mr Smith told Tribune Business that the Judicial Review was targeting the Government’s ongoing failure to follow statutory approvals processes, which he said it persistently bypasses through permits granted through the Office of the Prime Minister.
“It is going to create shockwaves in the foreign investor business community because it strikes at the very root of the foreign investor approval process in the Office of the Prime Minister,” he said. “The continued practice of creating these non-statutory bodies like the BIA and the Bahamas Environment, Science and Technology Commission (BEST) are just recipes for litigation.” Mr Smith added that Emera and GB Power executives had been “waving the approval from the BIA around as if it was a fait accompli” when they met minority ICD Utilities shareholders in late
October to discuss the proposed buy-out. “The Office of the Prime Minister is no lawful jurisdiction through which to be approving the sale of my shares, as a Bahamian, in a Bahamian company,” the well-known QC blasted. “This is why it is so important to ensure businesses operate in accordance with laws passed by Parliament, and not short-cuts created by the executive arm of government like the BIA. “We get foreign investors feeding into this alternative reality process, which just creates continued confusion and abuse,” Mr Smith continued. “They think they
SEE PAGE 5
Gov’t ‘fooling itself’ over Enterprises Bill By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government is “fooling themselves” if they believe the Commercial Enterprises Bill is the magical solution to the financial services industry’s woes, a local entrepreneur warned yesterday. Paul Moss, Dominion Management Services’ president, told Tribune Business that the Prime Minister and Brent Symonette were correct to brand the sector as “dying” - but only because they and their predecessors had failed to “shock it back to life”. Arguing that the Bill’s ‘fast track’ work permit approvals process would have little impact by itself, Mr Moss reiterated his belief that the Bahamas’ decline was rooted in its failure to shed its ‘tax haven’ image by adopting a low-rate corporate income tax.
* WON’T ‘SHOCK FINANCIAL SERVICES TO LIFE’ ALONE * BAHAMAS URGED: END ‘TAX HAVEN’ SCRUTINY * BILL TO ‘CREATE MORE HAVOC’ AT IMMIGRATION
PAUL MOSS He said he had been approached by many highend clients wanting to do business in the Bahamas, but who were deterred by the “scrutiny” they knew this would attract from home country regulators and tax authorities. And Mr Moss said the Bill’s requirement that work permit applications in targeted industries be approved within 14 days only threatened to wreak “havoc” on an already over-burdened Immigration
Department struggling to cope with its existing workload. Responding to assertions by Dr Hubert Minnis and his minister of financial services that the sector was “dying”, Mr Moss told Tribune Business: “I think that they are correct, notwithstanding what they think they’re doing with this Commercial Enterprises Bill. “It’s dying because we have yet to address the big issues this country requires to survive and get off life support. It ought to be about double taxation
SEE PAGE 4
$4.46 WORLD DRIVES BAHAMAS TO INTRODUCE INCOME TAX * ‘A VERY DIFFICULT SELL’, SAYS EX-MINISTER * TAX ALIEN TO ‘CULTURE’, DOMESTIC INDUSTRIES * BAHAMAS NEEDS ‘PEAK AND VALLEY’ TARIFFS By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FORMER financial services minister yesterday said global regulatory initiatives appear designed to force the Bahamas to adopt a corporate/personal income tax alien to its culture. Ryan Pinder, who held this position in the Christie Cabinet from 2012 to late 2014, told Tribune Business that the likes of the European Union (EU) and OECD appeared intent on forcing the Bahamas and others to give up sovereignty over their national taxation systems. “It seems to be that these international institutions and multilateral institutions want us to withdraw our national sovereignty in choosing our own tax regime,” Mr Pinder said. “Differentiation of tax regimes is fundamental, and viewed worldwide as a sacred component of self-sovereignty. I certainly think these global pushes are done with a mindset to force countries that don’t have income tax into an income tax regime.” Many in the Bahamian financial services industry believe that forcing the Bahamas to abandon its ‘no tax’ platform, and implement either a personal income tax, tax on corporate earnings or both, has been the ultimate goal of the Organisation for Economic Co-Operation and Development (OECD) and its G-20 patrons since the former’s ‘harmful tax competition’ initiative emerged in the late 1990s. The OECD is now closer to achieving this objective than it ever has been, aided by the EU’s decision to use the existence of a corporate tax regime as one of the key
SEE PAGE 2
URCA: MOBILE NUMBER TRANSFER ‘BREAKDOWN’ SHOULDN’T HAPPEN By NATARIO MCKENZIE Business Reporter nmckenzie@tribunemedia.net
* WORKING TO RESOLVE ‘LINGERING CHALLENGES’ * BLACK FRIDAY WOES LASTED INTO WEEKEND
A SENIOR regulator yesterday conceded there were “lingering challenges” with mobile number portability following last Friday’s “breakdown of sorts”. Stephen Bereaux, the Utilities Regulation and Competition Authority’s (URCA) chief executive, said the regulator was working with the Bahamas Telecommunications Company (BTC) and Alive to resolve the problems highlighted by the ‘Black Friday’ porting delays. “Last Friday there was a significant technical difficulty experienced with customers trying to port from BTC to Aliv, which was particularly unfortunate because it happened on a fairly busy porting day,” said Mr Bereaux. “URCA started an investigation into the problem that continued into
Saturday, November 25. Our purpose at the time was to resolve the issues or ensure that the issues had been resolved by the operators concerned, and people were able to port their numbers. “I believe that we are now at a situation where all of the people who tried to port their numbers over the weekend have now been ported successfully, and I believe the porting systems are now working as they are supposed to,” said Mr Bereaux. He added: “There are some lingering challenges across mobile number portability that we are working with the operators to resolve. We, at this stage, without any suggestion of blame from URCA’s perspective in relation to the rules that govern mobile number portability in the Bahamas, think there
DAMIAN BLACKBURN clearly was a breakdown of sorts and it was inconsistent with how things are supposed to happen. “Whether that was a technical issue or process issue, how it would have been caused and what action we should take, we are doing our investigation and we expect to be able to give the public a little more information on the cause and where the problem
originated. If it turns out there has been a breach of one of the rules relating to number portability or otherwise, we would obviously take steps to deal with that. What we would want the public to understand is that with these systems occasionally there may be issues.” Damian Blackburn,Aliv’s top executive, told Tribune Business that the number portability system delays had “hugely” impacted Aliv’s promotional drive to grow its customer base on “the busiest shopping day of the year”. He declined, though, to comment on whether he felt the disruption - which primarily impacted BTC customers wishing to switch to Aliv and keep their existing mobile phone numbers - was more than a coincidence. BTC hit back at its mobile rival for insinuating that the system fault was
SEE PAGE 4