Guardian ( Trinidad and Tobago )
15 June 2023 ( Page 3 )
Lee-Chin sells millions of NCBFG shares
By Anthony Wilson
...Group ‘strong and secure’ says
corporate secretary
A connected party of Michael Lee-Chin, the
chairman of the NCB Financial Group (NCBFG), sold
22,708,700 shares in the regional financial services
company last Friday, 16 days after the May 24, 2023
announcement that Lee-Chin “is taking a leave of
absence immediately from the boards of NCBFG,
National Commercial Bank Jamaica and Guardian
Holdings Ltd (GHL).”
In the statutory notice announcing the immediate
leave of absence, NCBFG said Lee-Chin it would
“allow him to focus on certain pressing business and
personal matters,” and that he anticipated these
matters taking approximately three months.
Friday’s sale of the block of 22,708,700 shares took
place across the floor of the Jamaica Stock Exchange (
JSE) at the price of about J$68 a share and would have
resulted in gross proceeds of about J$1.54 billion
(about US$10 million).
The share sale amounts to 1.50 per cent of LeeChin’s listed shareholding in NCBFG of 1,505,187,375
shares and is 0.92 per cent of the financial
conglomerate’s 2,466,762,828 issued share capital.
NCBFG is listed on both the JSE and the T&T Stock
Exchange (TTSE), both of which mandate that
directors and senior executives of listed companies
must disclose trading in their company’s stock.
Lee-Chin’s involvement in the sale of the block of
shares was confirmed by NCBFG’s corporate
secretary, Dave Garcia, in an email to the Business
Guardian on Tuesday night, in response to questions
on the connected party sale of shares.
In the email, Garcia said: “We understand that there
may be questions regarding the recent financial
transactions of the Honourable Michael Lee-Chin, OJ
and his associated entities, which involve the sale of
a small portion of his NCB Financial Group Ltd
(NCBFG) shares and the liquidation of certain
personal assets.
“As you have pointed out, the shares sold account for
less than one per cent of the total outstanding
NCBFG shares.
“Our understanding is that these actions are driven
by his diverse investment objectives, some of which
he has publicly shared, and are personal. They do not
have an impact on NCBFG or its strategic direction.
“Mr Lee-Chin continues to maintain confidence in
NCBFG, remaining our majority shareholder and
expressing his commitment to maintaining this
status.
“The NCB Group remains strong and secure.
This is demonstrated by our consistent compliance
with all regulatory capital standards. These facts,
coupled with our ongoing profitability, exhibit the
resilience of our business model amidst economic
challenges.”
Although NCBFG declared an audited after-tax profit
of J$39.922 billion (US$266.14 million) for its 2022
financial year, the company opted not to pay a
dividend in its last financial year.
In its 2022 annual report, NCBFG said the factors in
its decision not to pay a dividend for 2022 included:
the fragile geo-political situation in Europe; “the
potential for further central bank rate increases
impacting capital via the fair valuation of investment
assets;” and regulatory developments in some of its
territories along with the implementation of IFRS 17
and Basel II framework.
IFRS 17 requires a company to measure insurance
contracts using updated estimates and assumptions.
Basel II is an international business standard that
requires financial institutions to maintain enough
cash reserves to cover risks incurred by their
operations.
In responding to the Business Guardian question, the
NCBFG corporate secretary provided information
that was not requested, when he outlined: “We
understand the importance of dividends to our
shareholders. Our commitment remains strong to
reinstate dividends at the earliest opportunity, in
accordance with our prudent financial management
and capital retention strategy.
“We are dedicated to balancing shareholder returns
with the long-term financial stability of our
institution, as this is in the best interest of all
stakeholders.
“Transparency remains a core business principle and
we will continue to provide timely updates to
stakeholders.”
Lee-Chin’s decision to sell the US$10 million block of
shares in the company he founded comes as he seeks
to divest assets to raise US dollars.
Guardian Media and media houses in Jamaica have
reported his attempt to dispose of his seven-
bedroom, 8,400-square foot mansion on Grand
Cayman’s Seven-Mile Beach for an asking price of
US$35 million.
Last month, he was also reported to have sold his
superyacht, AHPO, for US$362 million ( J$55.8
billion), a US$62-million premium to what he paid
for the vessel in 2021.
Lee-Chin, who was placed on the Forbes magazine’s
list of billionaires in 2010, is also reported to have
sold a media business in Jamaica, a private hospital
in Kingston and a 250-acre beachfront property on
the north coast of the island.
In a Zoom interview last month with Dashan
Hendricks, the business content manager of the
Jamaica Observer, Lee-Chin said he took the leave of
absence because he wanted to focus on a recently
approved cancer treatment and on clean energy using
nuclear power, specifically small modular reactors.
“Those two areas of business have really taken off
significantly and they need to be put on solid footing.
Additionally, the chief operating officer of one of my
companies in Canada decided to move on at the end
of May. So I had to jump in to substitute for him until
I find somone else,” said Lee-Chin in the interview.
NCBFG has also faced some issues in the recent past.
On May 12, 2023, the group reported after-tax profit
for the six months ended March 31, 2023 of J$6.338
billion, which was a decline of 58.53 per cent
compared to the J$15.285 billion it earned for the
comparable period in its 2022 financial year.
NCBFG’s drop in profit for the period October 1, 2022
to March 31, 2023 was driven by the 51.67 per cent
decline in its net revenues from the group’s
insurance activities, which fell to J$7.696 billion in
March 2023 from J$15.925 billion on March 31, 2022,
according to the financial conglomerate’s half-year
unaudited financials.
The Jamaican company’s principal insurance holding
is its majority stake in Guardian Holdings Ltd (GHL),
the Westmoorings, Trinidad company.
Asked whether there is any concern at GHL about
Lee-Chin’s sale of the block of 22,708,700 shares,
the T&T company’s president, Ian Chinapoo told the
Business Guardian: “I actually was not aware of the
trade, but has no concern as this is a very small
percentage of his overall holding of 1.5 billion shares
and this is not an unusual transaction.”
NCBFG’s share price has declined by 39 per cent on
the TTSE for the period December 31, 2022 to June 13,
2023.
The NCBFG share price closed at $2.78 on Tuesday.
On September 30, 2019, NCBFG traded on the local
stock exchange at $10.44, which means the group’s
share price declined by 73.3 per cent between the end
of the company’s 2019 financial year and Tuesday.
Photo - NCBFG chairman, Michael Lee-Chin