On April 23, 2021, I wrote to an ex­ec­u­tive of First Cit­i­zens Bank Ltd to en­quire about an in­vest­ment made by First Cit­i­zens In­vest­ment Ser­vices (FCIS), a 100-per-cent-owned sub­sidiary of the bank, in a pub­licly list­ed Ja­maican com­pa­ny called Bari­ta In­vest­ments Ltd.

That first en­quiry in­volved the ac­qui­si­tion by FCIS of 5 per cent of Bari­ta In­vest­ments from the com­pa­ny’s Ad­di­tion­al Pub­lic Of­fer­ing (APO) of shares in Sep­tem­ber 2020. FCIS would have paid an es­ti­mat­ed US$19.73 mil­lion for the block of shares in Bari­ta. That ini­tial in­vest­ment by FCIS in Bari­ta was done in “the or­di­nary course of busi­ness,” ac­cord­ing to the ex­ec­u­tive of the ma­jor­i­ty state-owned bank, which is head­quar­tered in Port-of-Spain.

As far as can be de­ter­mined, FCIS made two sub­se­quent in­vest­ments in Bari­ta. On or about De­cem­ber 4, 2020, the T&T in­vest­ment com­pa­ny ac­quired an ad­di­tion­al 1.1 per cent stake in Bari­ta on the floor of the Ja­maica Stock Ex­change (JSE). And FCIS pur­chased more shares in the com­pa­ny in Bari­ta’s sec­ond APO, in Sep­tem­ber 2021.

All told, FCIS now owns a to­tal of 90,795,154 shares in Bari­ta, mak­ing the T&T com­pa­ny the sec­ond largest share­hold­er of the Ja­maican com­pa­ny with a stake of 7.43 per cent.

Bari­ta’s largest share­hold­er is a Bar­ba­dos-reg­is­tered com­pa­ny called Cor­ner­stone Fi­nan­cial Hold­ings Ltd, with a 75.08 per cent stake.

Bari­ta’s third largest share­hold­er now is Ri­ta Humphries-Lewin, the founder, for­mer chair and pre­vi­ous­ly, the largest share­hold­er of Bari­ta. She was born in 1936. Mrs Humphries-Lewin sold the 75 per cent stake in Bari­ta to the Cor­ner­stone Group, which was found­ed by a Ja­maican in­vestor named Paul An­tho­ny Simp­son, in Au­gust 2018.

The prin­ci­pal as­set of the Cor­ner­stone Group, which was found­ed in No­vem­ber 2017, is its 75 per cent share­hold­ing in Bari­ta In­vest­ments Ltd, which is list­ed on the JSE.

Apart from be­ing the sec­ond largest share­hold­er in Bari­ta, T&T’s First Cit­i­zens Group has de­vel­oped a re­la­tion­ship with Cor­ner­stone in the last sev­er­al years as the T&T com­pa­ny is the largest bank cred­i­tor of Cor­ner­stone Fi­nan­cial Hold­ings Ltd, hav­ing lent the com­pa­ny US$60.1 mil­lion, ac­cord­ing to the Cor­ner­stone 2022 au­dit­ed fi­nan­cial re­port.

It is clear, then, that the T&T bank­ing group has de­vel­oped links to the Cor­ner­stone/Bari­ta group, both as an in­vestor and as a lender.

Giv­en that re­la­tion­ship, what hap­pens to the Cor­ner­stone/Bari­ta group would be of some in­ter­est to T&T’s Min­is­ter of Fi­nance Colm Im­bert (who as Cor­po­ra­tion Sole holds the ma­jor­i­ty 60.11 per cent in­vest­ment in the First Cit­i­zens group, on be­half of the State) as well as in­di­rect­ly, the tax­pay­ers of T&T, the thou­sands of cit­i­zens of T&T who own shares in the lo­cal bank­ing group and its thou­sands of cus­tomers.

Con­tro­ver­sial trans­ac­tions

The Cor­ner­stone group has been the sub­ject of scruti­ny in the Ja­maican me­dia as a re­sult of two trans­ac­tions in­volv­ing:

• The sale by Ri­ta Humphries-Lewin of 27,232,734 Bari­ta shares on the floor of the JSE on Sep­tem­ber 28, 2021, at a price of J$102.70. That trans­ac­tion would have gen­er­at­ed gross pro­ceeds of an es­ti­mat­ed US$18.9 mil­lion;

• The pur­chase by Ri­ta Humphries-Lewin of 1,388,889 shares in the Cor­ner­stone group at US$10.80 per share in an Ad­di­tion­al Pri­vate Of­fer­ing, for a to­tal con­sid­er­a­tion of US$15 mil­lion.

These Cor­ner­stone shares were is­sued to Humphries-Lewin af­ter the end of the com­pa­ny’s Sep­tem­ber 30, 2021 fi­nan­cial year.

On March 31, 2022, Mrs Humphries-Lewin’s niece, Deb­o­rah Morde­cai Ed­wards, wrote a for­mal com­plaint to the Bank of Ja­maica, the coun­try’s cen­tral bank, al­leg­ing that those 2021 trans­ac­tions in­volved “some lev­el of de­cep­tion, co­er­cion and/or fraud.”

The for­mal com­plaint against the Cor­ner­stone group, known as the Morde­cai let­ter, came in an 11-page email to Deputy Gov­er­nor and deputy su­per­vi­sor of banks Mau­rene Simms, and to Gov­er­nor of the Bank of Ja­maica Richard Byles.

Morde­cai Ed­wards has been a prac­tic­ing at­tor­ney since 1977 and was ad­mit­ted to prac­tice in Ja­maica that year, and in the State of Flori­da in 1991.

She start­ed her le­gal ca­reer in Guyana with the Cari­com Sec­re­tari­at in 1977 and worked at the Bank of Ja­maica ear­ly in her le­gal ca­reer.

Ac­cord­ing to her re­sume, “Deb­o­rah has ne­go­ti­at­ed and doc­u­ment­ed loans and trade fi­nance in the hun­dreds of mil­lions of dol­lars for Ja­maica with the World Bank, the US Ex-Im Bank, and with the gov­ern­ments of the Unit­ed States of Amer­i­ca, Japan, Is­rael, Italy, Nor­way, Switzer­land, France, Ger­many, Hun­gary, Colom­bia, Cu­ba, Venezuela, Ar­genti­na, Pana­ma, Libya and In­dia.”

In her com­plaint let­ter, Morde­cai Ed­wards ques­tions whether her aunt signed some of the doc­u­ments, per­tain­ing to the two trans­ac­tions, it is claimed she did.

Ac­cord­ing to Morde­cai Ed­wards, the sig­na­ture of Humphries-Lewin on the doc­u­ments dif­fers from her his­tor­i­cal sig­na­ture, which is Ri­ta Humphries.

“Ri­ta Humphries-Lewin has nev­er, and does not now, sign Lewin in her sig­na­ture, hence the sig­na­ture Ri­ta Humphries-Lewin, which ap­pears on the two un­dat­ed let­ters is not (her) sig­na­ture and begs the ques­tion of who ac­tu­al­ly signed the let­ters,” ac­cord­ing to the let­ter of com­plaint.

In the com­plaint, Morde­cai Ed­wards states that her aunt sold 27,231,734 Bari­ta shares at J$102.70 on Sep­tem­ber 28, 2021, but that Humphries-Lewin signed un­dat­ed let­ters of au­tho­ri­sa­tion in June 2021, which were lat­er dat­ed Sep­tem­ber 24, 2021, agree­ing to sell the shares at J$80.
Morde­cai Ed­wards ques­tioned what be­came of the dif­fer­ence be­tween what the shares were sold for on the floor of the JSE and the J$80 a share to which it is claimed her aunt agreed. Humphries-Lewin’s niece al­so com­plained that the dis­par­i­ty was at least US$3.3 mil­lion.

The let­ter cites Karl Lewin, the hus­band of Ri­ta Humphries-Lewin, that the cou­ple re­ceived no in­de­pen­dent le­gal or fi­nan­cial ad­vice be­fore she signed the doc­u­ments per­tain­ing to the sale of her Bari­ta shares and pur­chase of the shares in Cor­ner­stone.

In the let­ter au­tho­ris­ing the sale of her Bari­ta shares and the pur­chase of shares in Cor­ner­stone, Humphries-Lewin “vol­un­tar­i­ly agreed to waive my rights to seek, and be in­de­pen­dent­ly ad­vised in re­spect of the ef­fect and im­pli­ca­tions of this au­tho­ri­sa­tion.”

Cor­ner­stone’s re­sponse

Cor­ner­stone has ap­plied to Ja­maica’s High Court seek­ing to have de­c­la­ra­tions that the sale of the Bari­ta shares and the pur­chase of the Cor­ner­stone shares were valid and en­force­able.

The pri­vate­ly held com­pa­ny stat­ed: “The al­le­ga­tions of de­cep­tion, co­er­cion and/or fraud are un­found­ed and un­true. Through­out their deal­ings with Mrs Humphries-Lewin, the ap­pli­cants, whether in­di­vid­u­al­ly or col­lec­tive­ly, did not com­mit any crim­i­nal acts.

“The trans­ac­tions are gen­uine and were prop­er­ly en­tered in­to and com­plet­ed by Mrs Humphries-Lewin.”

Cor­ner­stone al­so ar­gues that the trans­ac­tions were ben­e­fi­cial to Humphries-Lewin and they did not seek to take ad­van­tage of her.
The fixed-date claim form that forms the ba­sis of Cor­ner­stone’s ap­pli­ca­tion to get the High Court in Ja­maica to up­hold the va­lid­i­ty of the trans­ac­tions is dat­ed and stamped May 22, 2023.

The Sun­day Glean­er of Au­gust 6, quot­ed Kei­th Darien, the prin­ci­pal di­rec­tor of Ja­maica’s Fi­nan­cial In­ves­ti­ga­tions Di­vi­sion (FID) as con­firm­ing that that agency is in­ves­ti­gat­ing the al­le­ga­tions made by Deb­o­rah Morde­cai Ed­wards.

“We are nowhere near the stage of say­ing that the al­le­ga­tions are valid and whether any­one will be charged crim­i­nal­ly. The al­le­ga­tions war­rant this in­ves­ti­ga­tion be­cause there ap­pears to be some mer­it to what has been out­lined to us. But it will take some time to re­al­ly un­rav­el what is the true sit­u­a­tion. We have to take in­to con­sid­er­a­tion the fact that the en­ti­ty in­volved is an es­tab­lished, high­ly re­spect­ed pub­lic list­ed com­pa­ny.”

The FID is an arm of Ja­maica’s Min­istry of Fi­nance and the Pub­lic Ser­vice, “which con­tributes to the na­tion­al se­cu­ri­ty of Ja­maica by pro­vid­ing qual­i­ty fi­nan­cial in­ves­ti­ga­tions that sup­port the Gov­ern­ment of Ja­maica’s strate­gic pri­or­i­ties,” ac­cord­ing to the min­istry’s web­site.