Legal wrangling persists between ANSA and BHL
An exercise in public relations!
That’s how the attorney for Banks Holdings Limited (BHL) Barry Gale, QC, Tuesday described the reaction of the Trinidad-based ANSA McAl to the latest decision handed down by the Court of Appeal, amid the ongoing legal wrangling between the two companies.
In a release today, ANSA McAL (Barbados) Ltd said it was pleased with the decision of the Court of Appeal to restore the injunction granted by Chief Justice Sir Marston Gibson, which restrains BHL from performing or otherwise giving effect to certain preferential shareholders’ rights, in favour of its current majority shareholders AMBEV/SLU.
In fact, ANSA hailed the decision as a “landmark” one, saying the Court of Appeal had noted that those special rights and privileges, created by a “poison” debt security agreement, were given effect solely at the direction of the BHL Board, without the consent of BHL shareholders.
“This Agreement created conversion shares for SLU which carried pre-emptive rights and were essentially redeemable at a premium. Further, having entered into that Agreement, the Court of Appeal found that ‘rather incredulously, in this brave new world of Corporate Governance’, the BHL board was of the view that it could not disclose the Agreement to BHL shareholders because of a confidentiality clause in the Agreement,” the ANSA statement said.
It further pointed out that the Court of Appeal had determined that “there was a serious issue to be tried in the Courts because there was undisputed evidence that SLU’s conversion shares conferred special rights and privileges on SLU, that were not enjoyed by other BHL shareholders.
“Additionally, the fact that such unique rights were granted to SLU without the knowledge and consent of BHL shareholders raised, in the opinion of the Court, the question as to whether BHL had acted in a manner which was unfairly prejudicial to and unfairly disregarded the interests of ANSA and all other BHL shareholders.
“In our view, the effect of the Court’s judgment is to make it clear that where there is strong evidence of a threat to the fundamental principle that shareholders in the same class should be treated equally, the matter is not to be viewed lightly.
“We are also appreciative that the Court of Appeal has seen fit to award ANSA, its costs in this appeal and in the High Court,” the ANSA statement added.
However, in response, Gayle said it was “unlikely” that any such trial would take place, particularly given the fact that BHL was now “almost completely owned by Ambev/SLU in whose favour the challenged rights created by the Debt Security Agreement are vested.
“Clearly, Ambev/SLU cannot and will not seek to exercise those rights against itself! The issues for trial are therefore largely of academic interest only,” he said in a statement emailed to Barbados TODAY.
He also pointed out that the appeal was fought mainly, if not entirely, on the question of legal costs in that ANSA McAl was seeking to have the decision of the Chief Justice overturned so as to seek to recover some of their legal costs.
“The public is reminded that it is ANSA McAl who sold millions of shares which it acquired during the takeover process to Ambev/SLU and now only retains a very small number of share in BHL.
“In any event, BHL and its legal advisors are currently analyzing the judgment of the Court of Appeal to determine whether or not the decision should be appealed to the Caribbean Court of Justice,” the BHL lawyer added.