Ja­maica’s Cor­ner­stone Group of com­pa­nies has tak­en steps to im­ple­ment its re­or­gan­i­sa­tion in­to a fi­nan­cial hold­ing com­pa­ny, in or­der to com­ply with the re­quire­ments of Ja­maica’s Bank­ing Ser­vices Act (BSA), 2014, the com­pa­ny said yes­ter­day in a news re­lease.

Cor­ner­stone said that un­der sec­tion 69 of the BSA, any group of com­pa­nies which in­cludes a de­posit-tak­ing in­sti­tu­tion and an­oth­er fi­nan­cial in­sti­tu­tion, is re­quired to re­or­gan­ise it­self so that the fi­nan­cial in­sti­tu­tions are held by a fi­nan­cial hold­ing com­pa­ny.

The group said the re­or­gan­i­sa­tion will en­sure that all reg­u­lat­ed en­ti­ties with­in the group are held un­der a sin­gle hold­ing com­pa­ny to en­able con­sol­i­dat­ed su­per­vi­sion un­der the BSA by the Bank of Ja­maica, the is­land’s cen­tral bank.

Un­der the pro­posed new struc­ture, Bari­ta In­vest­ments Ltd, Bari­ta Unit Trusts Man­age­ment Com­pa­ny and Cor­ner­stone Trust & Mer­chant Bank will be held and op­er­at­ed un­der the new­ly formed com­pa­ny in­tend­ed to serve as the fi­nan­cial hold­ing com­pa­ny (“FHC”) for the group.

Bari­ta In­vest­ments Ltd is list­ed on the Ja­maica Stock Ex­change. T&T’s ma­jor­i­ty State-owned First Cit­i­zens Group Fi­nan­cial Hold­ings Ltd is the sec­ond largest share­holder­bof Bari­ta In­vest­ments Ltd, be­hind the Cor­ner­stone Group, which is the largest share­hold­er.

In the news re­lease, the Cor­ner­stone Group said the re­or­gan­i­sa­tion will be un­der­tak­en as court sanc­tioned schemes of arrange­ment and will in­volve the fol­low­ing:

* Cor­ner­stone Fi­nan­cial Hold­ings Ltd (CFHL), the par­ent and ma­jor­i­ty share­hold­er of Bari­ta, will as­sume the as­sets and li­a­bil­i­ties of its sis­ter and mir­ror com­pa­ny, Cor­ner­stone Unit­ed Hold­ings Ja­maica Ltd (CUHJL).

The amal­ga­ma­tion of CUHJL and CFHL will ef­fec­tive­ly re­sult in the im­ple­men­ta­tion of the “mir­ror prin­ci­ple”, which has un­der­pinned the op­er­a­tions of both Cor­ner­stone en­ti­ties since CFHL’s in­cor­po­ra­tion. The amal­ga­ma­tion of CUHJL and CFHL will re­sult in the ex­ist­ing share­hold­ers, who cur­rent­ly hold an equal num­ber of shares in each Cor­ner­stone en­ti­ty (“mir­ror prin­ci­ple”) own­ing one set of shares in the com­bined en­ti­ty (“CFHL”), post amal­ga­ma­tion;

* The new­ly formed fi­nan­cial hold­ing com­pa­ny will be cre­at­ed as a sub­sidiary of CFHL;

* The fi­nan­cial hold­ings com­pa­ny will be­come the di­rect par­ent com­pa­ny for Bari­ta and CTMB and will ac­cord­ing­ly be is­sued shares in Bari­ta and CTMB with the shares pre­vi­ous­ly held in CTMB and Bari­ta post the amal­ga­ma­tion be­ing can­celled;

* The fi­nan­cial hold­ing com­pa­ny will is­sue shares to CFHL in ex­change for re­ceiv­ing the or­di­nary share in­ter­ests in CTMB and Bari­ta pre­vi­ous­ly owned by CFHL; and

* The Cor­ner­stone share­hold­ers in CFHL will con­tin­ue to hold their shares in CFHL in the same pro­por­tion as they did pri­or to the im­ple­men­ta­tion of the Schemes. CFHL will be­come the ul­ti­mate hold­ing com­pa­ny for the Group.

On Feb­ru­ary 20, 2024, the Supreme Court of Ja­maica is­sued or­ders for Bari­ta and CUHJL to each con­vene meet­ings of their share­hold­ers to al­low the share­hold­ers to con­sid­er and vote on the schemes.

Cor­ner­stone was found­ed by Ja­maica busi­ness­man, Paul Simp­son.