The Thomas Report was filed in August 2006 in a High Court suit brought by two shareholders against the National Investment Company of Anguilla Ltd in the year 2006. The Report reveals a sorry picture of management deficiencies over an extended period of time. We have been looking at some of them over the past ten posts. Mr Thomas sets out his conclusions at the final pages 51-53 of his Report.
He finds that the Board of Directors failed collectively in their fiduciary duty to manage the business to the standard that is expected of a public company. He finds the evidence of this compelling. This is so particularly in the areas of accounting, investment, record keeping, and the filing of audited financial statements.
He complains at the culture of getting the job done at its cheapest, irrespective of the consequential effects to the overall management of the company. He finds that the Board’s gravest error of judgment was the failure to employ competent, experienced and trained staff. The termination of Audain & Associates who had been providing accounting services, without finding a competent replacement, was most damaging. The result was a complete breakdown of internal control procedures, and the impossibility of having the financial records audited.
Mr Thomas considers that the decision not to pay the Directors of NICA, while well-intentioned, may have contributed to the inertia or a peculiar pattern of behaviour of some Directors. He describes the approach of NICA’s management as more reflective of a charitable organization. There, the members provide their services on a voluntary basis. In a public company, Board members are paid, and the requisite performance demanded.
He found the approach of Kennedy Hodge to the management of the business to be reckless and unorthodox. Mr Hodge’s explanations were, in his view, far-fetched, contradictory, unconvincing, petty, and bizarre. He found the decision of George Kentish to enter into a partnership with Mr Hodge and NICA most regrettable. Transactions of this nature, though well-intentioned, will always be subject to the utmost scrutiny. They should be strongly resisted. He found no evidence of impropriety on Mr Kentish’s part. But, as Chairman of the Board, his decision to participate in the disbursement of funds was unwise and not in keeping with best accounting practices. The advice given to the Board by Marcel Fahie, in relation to Mr Hodge’s offer to manage NICA, he finds inappropriate. He finds that all of the Directors should take responsibility for the failure of the Board to meet on a consistent basis, and to monitor the activities or inactivity of some members.