By Sandra Chouthi
Special to Indo-Caribbean World
Port-of-Spain - The March 26 decision by a majority of Royal Bank of Trinidad and Tobago shareholders for the Royal Bank of Canada to buy the assets of the locally-owned bank was made against weeks of heated debates about patrimony and nationalism and globalisation.
RBTT's agreement entered into with RBC was historical. That shareholders agreed to sell was a landmark.
Since RBTT's executive announced last October the agreement to acquire the two entities, there have been debates in all forms of the media - print, radio and television - comments from politicians on the significance of the (US) $2.2 billion deal going through.
Anthony Wilson, editor-in-chief at the Trinidad Guardian, first raised the question of RBTT possibly being acquired by a foreign entity in a column on November 16, 2006.
In one of many columns Wilson wrote on the subject within the last year, he described it as "the largest foreign investment in the English-speaking Caribbean - larger than any of the LNG trains or the current petrochemical complexes being proposed by Essar Steel or Methanol Holdings."
The largest RBTT shareholder is State-owned National Insurance Board (NIB), which owns 22 percent or 69.3 million shares.
The second largest shareholder is Guardian Holdings Ltd with 14 percent. It is understood that businessman Richard Azar owns a little more than three percent of RBTT shares.
Following the decision by the majority of shareholders for the sale to go through, the government said it gave no instructions on whether to sell its shares in RBTT to RBC.
The final ballot count from the March 26 special shareholders meeting, which 705 people attended, showed a 98.18 percent voted in favour of the 2.2 billion US dollar sale. The NIB and big local businesses constituted the majority sellers.
On that same day, the stock of RBTT Financial Holdings - RBTT's parent company closed at (TT) $34 (US) $5.60 on the Trinidad and Tobago Stock Exchange.
Finance Minister Karen Nunez-Teshiera said the development was in the country's best interest, adding, "there are opportunities for us in Trinidad and Tobago. RBC has made a commitment to make Trinidad and Tobago its headquarters and I think that is a great positive for Trinidad and Tobago," she said.
Junior Finance Minister Mariano Browne said the decision on whether the NIB should sell its shares was left entirely to the NIB board.
He said the government would have been criticised had it also intervened: "You are damned if you do and damned if you don't," he said.
Under the October 2007 deal RBTT reached with RBC, shareholders will get a (TT) $40 (US$6.50) value for their stock in a cash/RBC share split.
Federation of Independent Trade Unions (Fitun) president David Abdulah was critical of the Patrick Manning government for failing to stop the NIB sale of shares.
The buyout came amid Fitun's efforts to get shareholders to vote against the measure on the grounds that it was not in the national or regional interest, particularly since regional governments had agreed to the establishment of a single market and economy.
Abdulah said he considered their objections a success despite the fact that the sale was approved.
"It is still a victory for the ordinary people," he told reporters, describing the event as a David versus Goliath fight.
Petra Bridgemohan, a RBTT shareholder, was a firebrand at the special general meeting, held at the Hilton Trinidad ballroom.
Bridgemohan questioned how the RBC proposal could be described as growth for RBTT if it was being acquired.
"RBC's concern is to its corporate citizens in Canada, not to Trinidad and Tobago," Bridgemohan said. Shareholders applauded.
Bridgemohan, former co-ordinator of Trinidad and Tobago Transparency Institute, had controversially called in 2005 for the resignation of then Housing Minister Dr Keith Rowley until investigations into the construction of the Scarborough Hospital and the Landate development were complete. Rowley had called for an apology.
Regarding RBC pulling its operations out of Trinidad and Tobago 20 years ago, Bridgemohan demanded: "If these companies pulled out when times were tough, what guarantee do we have that when times go tough again that they will not stay the course?" Shareholders applauded again even before she finished her sentence. RBC was last in T&T 20 years ago.
Bridgemohan expressed concern about the interlocking directorates, perceived conflicts of interest with certain directors who sit on the Neal & Massy board, which has an energy component in its group.
"Some of these directors have been in the public domain over an already crucial dealings with Bombardier and Caribbean Airlines," Bridgemohan said. More applause, picong and laughter.
Bridgemohan said she was not launching an attack on RBTT board members, but making a point about integrity in financial institutions as Trinidad and Tobago seeks to be the regional leader in financial negotiations.
She asked whether RBTT in any way communicated with executive directors of NIB before RBTT entered into a buyout agreement with RBC.
"I don't mean the expatriate ones. I mean the local ones, Mr Chairman," Bridgemohan said, before RBTT chairman Peter July could answer. "I just want a yes or no answer." People laughed, perhaps in shock, at her demand.
"The answer is no," July said. "No shareholder, neither Guardian Holdings Ltd nor the NIB or any other shareholder, was consulted on this transaction prior to our agreement with RBC, which was executed subject to shareholder approval."
He said there was no interaction between RBTT director, who is chairman of Guardian Holdings Ltd, and the RBTT board on this transaction. Voices rose from a brief whisper to a chorus.
July said: "Okay, let's move on."
Bridgemohan, who said she was protecting her inheritance from her 75-year-old mother, Una, requested an e-mailed transcript of the meeting so she could send it to several stock exchanges abroad.
Outside the hotel, members of Fitun protested the sale. Dressed in navy blue T-shirts that carried the Oilfield Workers' Trade Union insignia, trade unionists sang, "RBC, run yuh run, RBC run yuh run. Run if yuh running. Leave we money. RBTT, run yuh run."
Inside again, a former RBTT employee of 41 years read from a prepared script that went on for several minutes until restless shareholders clapped to urge July, who addressed him as "Stephen," to stop him.
Minority shareholder Peter Permell left the microphone to personally hand to July his intent to dissent from the transaction, before resuming his address.
Businessman Stewart Nock - looked suave in a blood red long-sleeved shirt, his hair slicked backwards - pointed to page 52 of the directors' circular, which states that RBTT has "agreed" to pay to RBC the US dollar equivalent of (TT) $343.8 million if RBTT terminates the combination agreement.
Shareholders sounded surprised. "Whoa!" they said in unison.
Nock said if what he read was correct, that that was nothing but blackmail on the part of RBC.
July interrupted Nock: "Mr Nock, let's keep the language at a proper level. I invite you to read that section again because you are misleading the group."
More "whoas!"
"There is a stipulation there that failure to obtain the required RBTT vote at the meeting and a bona fide RBTT acquisition proposal has been made by any person other than RBC prior to the RBTT meeting," July said.
Shareholder Winston Padmore said directors who participated in the transaction should not vote as a matter of principle and conflict of interest.
"It should be an arm's length sort of thing," Padmore said. "There can be no other way."
He got applause.
July, according to the directors' circular, has 975,461 RBTT shares.
"Winston, it is arm's length and I am a shareholder of the company and I'm allowed to vote and legally, that is the point."
At the start of the special general meeting, RBTT chairman July said The RBTT Group has found in the Royal Bank of Canada, the compatibility, size and scale needed to underpin the bank's growth and strength in the Caribbean.
July said as Trinidad and Tobago's largest and most profitable bank, it could not, for instance, participate meaningfully in financing the energy sector, which contributed roughly 42 percent of this country's gross domestic product.
And the RBTT Group was also too small to compete effectively in the wider global market, he added.
"Nor, indeed, could we compete successfully against international banks for the bigger and better acquisition opportunities in Central America, which is the market we should be looking at now," he said.
Regarding what July described as "misconceived comments from certain quarters" to the effect that RBTT's board and management were "incapable of growing the Group any further," and that's the reason the RBC proposal was being being put forward, he said: "Well, that is just not so."
Comments from the members of the public were varied. Retired teacher and dramatist James Lee Wah is totally against this takeover.
"RBTT is a local bank run by locals and I don't see why we should sell-out to the Canadians. Economists have said that because RBC is a “world bank,” economies of scale will provide more profits. The question is for whom, Trinidadians and Tobagonians or Canadians? It seems to me that selling to RBC is like selling-out our independence we have worked so hard to establish. It's counter productive and I feel that we are being recolonised," Lee Wah said.
Hazel Wilson, a tool checker with the San Fernando City Corporation, said, "Once it is for the benefit of all the people of Trinidad and Tobago, then I am in favour of the sale."
Retired police officer Calvin Kennedy said the sale of RBTT was up to shareholders.
"I think if the shareholders are satisfied they can make the necessary changes in the bank's administration. I think it is up to the majority of shareholders to consider whatever changes they wish to make."