Former minority shareholders of Cable & Wireless (Barbados) Limited (CWBL) will finally have their class-action suit against the company heard by the local High Court next month.
The March 6 hearing will come after an almost five-year wait by hundreds of claimants who are challenging the telecommunications giant’s decision to compulsorily acquire their shares.
The COVID-19 pandemic and a series of legal and procedural issues had delayed the hearing of the lawsuit which was filed in November 2017.
Speaking on behalf of the group, Rickey Went who informed that the date had been set by the court, said he and the other claimants were confident of winning the case.
“Not only are minority shareholders upbeat, but also they are anxious to plead their case in court next month, as they have uncovered some striking information,” he told Barbados TODAY.
Went charged that in 2017, CWB “squeezed” out the small shareholders through an amalgamation with Cable & Wireless West Indies (CWWI) that was oppressive and unduly prejudicial to, and unfairly disregarded the interests of the minority shareholders.
“Minority shareholders argued that there should have been a takeover bid similar to what happened when Banks Holdings Limited (BHL) was sold two years earlier in 2015. Reference was made to a bidding war between ANSA McAl and SLU to gain majority ownership of BHL that saw share prices skyrocketing from about BDS$4.00 to the final price of BDS$7.10 per share, an increase of 77.5 per cent. Banks Holdings Limited is no longer a Barbadian-owned company,” Went pointed out.
He recalled that in the directors’ circular to shareholders, it was stated that each shareholder was entitled to one vote per common share held on all matters to come before a special meeting on August 24, 2017.
It was further noted, according to Went, that CWWI “beneficially owned 81 per cent of the issued and outstanding shares of CWBL”.
“Of fundamental interest in the circular is that CWWI holds a sufficient number of common shares to approve the amalgamation resolution by voting the common shares it holds in favour of the same. Effectively, prior to the shareholders meeting in 2017, the outcome of the motion would have been a foregone conclusion,” the claimant added.
Went said his fellow shareholders felt strongly then, and still do, that as the majority shareholder of the Barbados affiliate, CWWI should not have been part of the voting process in relation to the amalgamation and the price of BDS$2.86 which was unilaterally set by the company.
“What has minority shareholders really upset from the beginning is that over the years, CWBL paid a healthy dividend and the share price would have exceeded BDS$5.00 per share. Three years prior to the acquisition, no dividends were paid, which minority shareholders believe is the main reason why the share price plummeted to $2.60,” he said.
Equally disheartening, the claimant asserted, is that “in essence, we the minority shareholders were bought out with our own money, being the funds that should have previously been paid as dividends”.
Redress being sought by the minority shareholders from the company and its directors includes but is not limited to shares, more cash, or a combination; issuance of the appropriate number of shares in the amalgamation entity to each minority shareholder who wishes to remain a shareholder; payment to each small shareholder who wants to sell their shares, consistent with the fair value of each share of the company; and provision of appropriate damages for the violation of the rights of the minority shareholders.
They are also asking the court to order the payment of dividends and the reasonable costs and legal fees incurred in connection with the enforcement of their rights. (EJ)
