SEC slaps GHL with $300k fine

The Securities and Exchange Commission has handed local insurance giant Guardian Holdings Ltd (GHL) a $300,000 “administrative fine.” The notice was first published in an advertisement on Friday, and GHL has accepted its reprimand “without any admission as to liability whatsoever.”

GHL, along with Jamaican conglomerate National Commercial Bank Global Finance (NCB), has been the subject of an SEC investigation and hearing to determine if any of this country’s laws or regulations were breached when NCB tried to take over GHL.

The parties involved included the SEC as applicant and Peter Permell, a minority share activist, as the co-applicant; NCB; GHL; and the majority shareholders – the Ahamad and Lok Jack families. Among the issues to be considered was that GHL’s minority shareholders perceived the price per share NCB offered GHL’s majority shareholders in 2016 to acquire 29.99 per cent of the company was below what they, the minority, considered a fair price, and the offer was accepted without proper consultation.

In May, before the SEC hearing panel made a ruling, the parties had reached a settlement, and on November 15, NCB agreed to increase its offer to GHL by US$0.30 to US$2.65 per share, and NCB would decide in its sole discretion how much of GHL it would acquire once it crossed 50.1 per cent.

In its statement on Friday, the SEC said it applied the fine according to Section 156 of the Securities Act: “Both the (SEC) and GHL recognised that the particular circumstances of the transactions under consideration… and the language of the by-laws had led to differing views (and arguments on how the by-laws should have been applied… having considered such factors, while neither the (SEC) nor GHL has admitted either party’s claim, and despite GHL’s insistence that it was in compliance with the by-laws and its resistance to the imposition of a fine, the (SEC) has imposed (the fine).”

The SEC said it believed the terms of the settlement would be in the best interest of the public and GHL shareholders and “will bring certainty to the local capital markets.”

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