FINANCE Minister Colm Imbert has fired back at Opposition Senator Wade Mark for his statements questioning First Citizens’ loan to Cornerstone Financial Holdings.
In the Senate on Wednesday Mark called for an investigation into the decision by First Citizens to loan a further US$45 million to Cornerstone Financial Holdings Ltd, a privately held Jamaican company. “We need an investigation into this matter, how can First Citizens take our money and invest our money in an institution that is offshore, that is not known to the world… That is a criminal act that has taken place,” he said.
“It is important to note that Cornerstone Financial Holdings, which is an offshore company whose directors are nameless and faceless; there’s no transparency and accountability involved in this company,” Mark added, describing the company as a “fly-by-night” one, as its shareholders are also unknown.
In a news release yesterday, Imbert described Mark’s comments as irresponsible and intended to harm the reputation of both companies.
He said Mark’s allegations came without a shred of evidence, other than regurgitating unfounded insinuations in the newspapers, that FCB had invested hundreds of millions of TT dollars in what he described as an unknown over-leveraged, fly-by-night company, involved in a Ponzi scheme.
Imbert said Mark went further to claim that FCB’s investment in Cornerstone was a criminal act. “A simple Internet search will reveal that Cornerstone is the majority shareholder of Barita Investments Ltd (Barita), a 45-year-old financial company that is listed on the Jamaica Stock Exchange. Barita’s publicly available 2021 annual report indicates that at the end of 2021, Barita had assets of US$600 million,” he said.
Imbert further stated that a simple Internet search would have revealed that as of July 2022 Barita was one of the top five largest companies listed on the Jamaica Stock Exchange (JSE) with a market capitalisation of US$709 million.
“Barita’s 2021 annual report also gives significant details on the executive management and organisational structure of Cornerstone. It is also a matter of public record, published in Barita’s 2021 annual report, that Cornerstone owns 74 per cent of Barita, whose asset is currently valued at US$525 million,” Imbert said.
He said Cornerstone is hardly a fly-by-night company, but in Mark’s reckless statements, he gave the false impression that Cornerstone was a shell company with little or no assets, and he attempted to convince his listeners that FCB was about to lose its entire investment in Cornerstone and Barita.
“The truth is that FCB’s 7.4 per cent shareholding in Barita is currently worth US$52.73 million. FCB paid JA$5.85 billion for these shares and has thus made a profit of US$13.7 million on the purchase of Barita shares—a return of 35 per cent on its investment. Therefore, the Barita investment has paid handsome dividends for FCB.
“Further, with Cornerstone’s 74-per cent shareholding in Barita being worth US$525 million, if FCB had lent Cornerstone US$45 million, it would have lent less than ten per cent of the value of Cornerstone’s shareholding in Barita. This cannot, by any stretch of the imagination, even hypothetically, be described as a criminal act,” Imbert said.
He added that the questions that must be asked are: why is Mark so interested in trying to undermine FCB’s efforts to grow and develop in the region, and why is he spreading such false and malicious information about another well-established Caribbean company?