JAMAICA | Montague 'comes clean' about First Rock Investments, Boards Dissolved.

KINGSTON, Jamaica November 10, 2021 - Following public outcry and condemnation, Transport and Mining Minister Robert Montague was on Tuesday forced to backtracked on his insistence, that he would not answer the 21 questions posed by his opposition counterpart   Mikael Phillips, citing a purported investigation by an anti-corruption  commission of  Parliament.

The question surrounded the Airports Authority of Jamaica’s (AAJ) $450-million stock purchase in the St Lucia-registered firm, FirstRock Holdings investment and its subsidiary, Norman Manley International Airport Limited (NMIAL).

House Speaker Marisa Dalrymple Philibert, who had ruled last Tuesday that the minister should not respond to the queries because of the alleged probe by the Integrity Commission, reversed  her decision, ruling that Minister Montague must answer the questions.

Prime Minister Andrew Holness, in what appears to be an admonishment of both the Speaker and the Transport Minister, yesterday rose in the House  yesterday to make it clear that a minister of government was obliged to answer questions posed in the House by the parliamentary Opposition.

Minister Montague then told the Parliament that most members of the AAJ board and its subsidiary, Norman Manley International Airport Limited (NMIAL), have already offered their resignations over the FirstRock Holdings investment snafu and he has “every intention” of accepting them.

He however refused to respond to repeated queries by Phillips as to whether he had fired the boards pointing out that they had been dissolved.

Finance and the Public Service Minister Dr Nigel Clarke told Parliament in July, that the entities broke the law in the first of two investments because they did not get his ministry's permission.

The shares were acquired in two separate deals, a year apart - January 2019 and 2020 - the first a private placement, and the second from an initial public offering (IPO) on the Jamaica Stock Exchange. First Rock started operations in March 2019, a month after the initial investment was made.

Montague confirmed that AAJ board chairman, Fay Hutchinson as was required, did not declare interest, in that she bought personal shares in First Rock in 2019.

In addition, she did not declare that she had joined the board of directors of FirstRock after the second investment in January 2020. Together, the AAJ and NMIAL bought US$3 million worth of stocks in the St. Lucia FirstRock entity.

In commenting on the question of conflict of interest, Montaque said that the AAJ did not “deliberately or knowingly breach the PMBA 2017 regulations”

Montague said, while one member of the AAJ board was a minority investor in First Rock, this wasn't seen as a conflict of interest, given than the shares were less than one per cent. Furthermore, he said the NMIA board chairman, who is the brother of a director and shareholder of First Rock, had, at the time, recused himself from the January 2020 meeting where the decision to invest in the First Rock IPO was made.

He further explained that an AAJ board director had joined the board of First Rock in March 2020, but this “wasn't construed to present a conflict of interest as the AAJ shares were acquired before the director became a member of the First Rock board, and therefore no declaration was necessary to have been made.”

Montague said that the member had informed some directors of the board about the investment but declined to say whether she had declared interest to the Board.

But according to Phillips the regulations state: “a director who is directly or indirectly interested in a contract made or proposed to be made by the authority shall disclose the nature of his interest and shall not take part in any deliberation or decision of the authority with respect to the contract.”

Montague said that in March 2021, he was informed by a director of NMIAL that the acquisition of shares by AAJ and NMIAL was not in keeping with the PMBA regulations, and wrote to the chairmen of the two public boards ordering an investigation, for any breaches to be corrected, and for the value of the investment to be protected.

However, Opposition spokesman on finance, Julian Robinson, told Montague:“You are asking Caesar to investigate Caesar. It can't be right. The board has to approve these investments and particularly where there was an issue around conflicts of interest that you are asking the same chair of the entities to investigate themselves,” he said.

Robinson also took issue with Montague’s insistence that there was no conflict of interest because a board member only held one per cent of the shares: “Who would have determined that there was no conflict of interest? Again, the same persons who are involved in the transactions are making the decisions surrounding themselves. That can't be right either,” said Robinson, the.

Montague also told his parliamentary colleagues that the shares purchased by AAJ and NMIAL in FirstRock were not acquired “for speculation given the nature of the real estate business in which the company is involved”.

Montague said up to June this year the AAJ group had earned dividends of US$123,220 on the shares, representing a two percent return annually.

“The full portfolio of shares purchased are still held by the NMIA and the AAJ,” he noted.

Montague attributed the drop in trading price of the shares — from US$00.12 in May this year, to US$00.07 now — to the onset of the novel coronavirus pandemic. Still, he insisted, “There is no intention to hurriedly sell at a loss,” pointing out that First Rock has never registered a loss.