NICA 4.
Bob Rogers and Collins 
Richardson are two irate shareholders in the National Investment Company of Anguilla Ltd. They have asked me to look into the status of NICA. The first thing we learned is that the company has been again struck off the Register for non filing of its Annual Returns over the past few years, and does not exist any more. Technically, its assets are vested in the Crown as not belonging to any known person. We are waiting to hear from the Directors that they have remedied the situation and done the necessary filings to bring the company back into good standing.
Meanwhile, we are looking at the Report prepared by Avondale Thomas concerning the performance of the Board of Directors of NICA. He dealt with their conduct previous to his appointment as Inspector under the Companies Act by the High Court Judge of
Mr Thomas came to a number of damming conclusions about the functioning of the Board of Directors. His most extreme comments are reserved for Kennedy Hodge. He says of Mr Hodge,
“. . . I found his approach to the management of the business, reckless and unorthodox on many occasions. In addition, I have found his explanations to some questions asked in my interview of 13th June 2003, and 28th July 2003 to be far-fetched, contradictory, unconvincing, petty and bizarre in some instances; particularly in relation to handling company funds, Saloman Smith Barney, and Jem Homes Incorporated investments. The Directors may want to consider his behaviour in light of the stipulations of section 97(1) of the Companies Act, RCA C65.”
What did Mr Thomas mean by his reference to section 97(1) of the Companies Act? It does not take a lawyer to interpret his words for you. His words are pellucidly clear when you read the sub-section. It says,
(1) Every director and officer of a company in exercising his powers and discharging his duties shall—
(a) act honestly and in good faith with a view to the best interests of the company; and
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Those are statutory duties 
owed by a director to his company. It is more than a contractual duty. Breach of a duty invites a law suit to enforce it or to be compensated for any loss suffered as a result. It seems to me that Mr Thomas was saying that the Directors should consider bringing legal proceedings against Kennedy Hodge for the loss and damage that his actions caused the company. The law suit would have been based on his breach of the duty of care that he owed to the company. The Directors do not appear to have taken legal advice. At any rate, they brought no proceedings against him.
In our next post, we shall look at some of the findings Mr Thomas made against Mr Hodge that made him make such a strong recommendation as he did above.
You scraped the scab off NICA and its obvious there is pervasive incompetency and, according to some insiders, blatant illegalities. There are many shareholders asking questions, pointing fingers, and making charges.
ReplyDeleteOnce the lid is totally off, allegations and accusations will fly.
“Go where the road takes you, but listen for the roar of the crowd."
I want to know how these people could just sit there and watch all this "incompetence, mismanagement, lack of transparency, and the failure of management to follow statutory provisions", and then resign and walk away, all of them pointing fingers at each other and none of them admitting any responsibility.
ReplyDeleteIf a man gives me the keys to his office and I steal assets belonging to his clients, I have committed a crime and the man has an obligation to his clients to pursue the matter both criminally and civilly. If he fails to do that - if he then chooses to conspire with me to conceal my misdoings from his clients - he cannot then later blame me as the thief. It is not satisfactory to just say, "The money was lost." He has become a co-conspirator and bears equal responsibility with me to those who trusted him.
A board of directors isn't some kind of game show. The members of a board have a responsibility - a personal responsibility - to do certain specific things. They are entitled to make mistakes; they are not entitled to conceal these errors from the shareholders who entrusted them to manage their assets.
How did they manage to manipulate appointments to the board so that they were able to protect themselves by remaining in control? Were there AGMs and elections?
The Rogers did the right thing. Did they then pursue the matter with Financial Services, the police or the AG?