My commentaries are seldom, if ever about me. Invariably, they focus on national issues that concern me. Every commentary is driven by this question: “What will happen if I say nothing?”
As a bona fide Saint Lucian, I feel entitled to share my thoughts responsibly and respectfully. Doing so in this newspaper and elsewhere has helped to free my mind. Still, as I move into the “September of my years” peace of mind has become more important to me. Sadly, I’ve long realized that in our small country, motive always trumps message, and that unburdening the mind does not always put it at peace.
I feel I owe readers the full facts regarding the genesis of my contretemps with 1st National Bank as well as an update about where things now stand, since my last commentary on 28 December 2024.
On July 10, 2023, First Citizens Investment Services (FCIS), a licensed company with solid experience in wealth management, including share purchases and exchanges, informed me that a shareholder of 1NB was seeking to sell some of his shares to deal with a family emergency. I agreed to buy the shares. On July 17, 2023, a notification bearing the signatures of vendor and buyer was sent to 1NB. I assumed everything was in order, and expected 1NB to issue share certificates in due course. Indeed, I’d been told by others who had purchased 1NB shares that it could “take a while” to receive certificates.
Based on the transfer, and my family’s longstanding shareholder status in 1NB, I indicated that the views I was sharing in my article on 17th October 2024, were from a shareholder perspective. On December 17, 2024, 1NB wrote to me to say that my article contained inaccurate information specifically regarding my “alleged status” and asked me to amend it to remove any reference to me being a 1NB shareholder. While I replied dismissing 1NB’s request, I realized something was amiss.
On December 30, 2024, I provided 1NB with a copy of the share transfer document, sent to it by FCIS, 17 months earlier, as well as my family’s shareholding status. That same morning, FCIS informed me that 1NB called to say the transfer did not comply with its procedures and that the transferred shares (for which I had paid in full) would remain in the name of the vendor until the situation was rectified. I was instructed that the proper forms supplied by 1NB to FCIS were to be completed and signed by the vendor and me in the presence of a notary and thereafter sent to the Inland Revenue Department for approval. In the meantime, 1NB repeated its request that I correct the statements made in my article dated 28 December, regarding the share transfer, “…as it suggests that the bank failed to appropriately register me as a shareholder.”
In the interest of enlightening all parties to the transaction, the Bank could have indicated that its position is supported by Article 23.1 of its Byelaws. It could also have cited Article 21 of its Byelaws which stipulates that no person shall exercise any rights of a shareholder until his or her name is entered in the register of shareholders. This did not gel with my good faith interpretation of Article 105 (c) of the Act, which states that “…a person in whose favour a transfer of shares has been executed, but whose name has not been entered in the register of members of a company is a shareholder of the company.” This provision is not made subject to Article 195 (2) of the Act which states that “…where a transfer instrument is prescribed in the byelaws of a company, that instrument shall be used.” Clearly, this should be fixed.
While this analysis establishes the legality of INB’s stance, it does not address the core issue, which is its failure to inform any of the parties of issues with the share transfer in a timely manner. It took 17 months to do so, and it did so only after I supplied evidence of the transfer. Instructively, thus far, 1NB has not denied receiving the notification and it has not apologized for the delay.
Needless to say, rectifying the transfer after 17 months could have gotten quite messy, if either party to the transfer became mentally or physically incapable. Moreover, the forms supplied by 1NB indicate that the transfer must be approved by its Board. This also implies the power to not approve. I would like to believe that approval is a mere formality, as I have already paid for the shares. Still, I’ve learned that where 1NB is concerned, nothing can be taken for granted.
Another core issue is when and how 1NB makes its rules known to its shareholders and key stakeholders. INB ought to take a page from the book of the Bank of Saint Lucia and empower its shareholders by providing them with as much information as possible, by educating them, including through regular seminars and by allocating more time at AGMs for questions.
I am always keen to learn from my experiences. I accept that I should have acted in my own self-interest and followed up with FCIS and/or with 1NB. I believe FCIS would accept it should have done the same.
I must hope 1NB has also learned some lessons from the way it handled the matter. A thorough search of its register and its correspondence would have revealed I had good grounds for asserting my shareholder status in respect of the transferred shares. Having realised its failure to promptly request FCIS to regularize the transfer, it might have adopted a different approach and contacted the vendor who is still an active 1NB shareholder. In its two letters to me, it could have provided a copy of its bylaws to bolster its request that I amend my article.
The directors of 1NB should consider establishing sound mechanisms for resolving shareholder disputes of this nature.